BOSTON CAPITAL TAX CREDIT FUND IV L.P.
Certification and Agreement
of
Belmont Affordable Housing II, L.P.
CERTIFICATION AND AGREEMENT made as of January ___ 1999, by
BELMONT AFFORDABLE HOUSING II, L.P., a Pennsylvania limited
partnership (the "Operating Partnership"); and T2G, Inc., a
Pennsylvania corporation (referred to herein, even if only one,
as the "Operating General Partners") for the benefit of BOSTON
CAPITAL TAX CREDIT FUND IV L.P., a Delaware limited partnership
(the "Investment Partnership"), BOSTON CAPITAL ASSOCIATES IV
L.P., a Delaware limited partnership, PEABODY & XXXXX and certain
other persons or entities described herein.
WHEREAS, the Operating Partnership proposes to admit the
Investment Partnership as a limited partner thereof pursuant to
an Amended and Restated Agreement of Limited Partnership of the
Operating Partnership dated as of January 1, 1999 (the "Operating
Partnership Agreement"), in accordance with which the Investment
Partnership will make substantial capital contributions to the
Operating Partnership;
WHEREAS, the Investment Partnership and Investment General
Partner have relied upon certain information and representations
described herein in evaluating the merits of investment by the
Investment Partnership in the Operating Partnership; and
WHEREAS, Peabody & Xxxxx, as counsel for the Investment
Partnership, will rely upon such information and representations
in connection with its delivery of certain opinions with respect
to this transaction;
NOW, THEREFORE, to induce the Investment Partnership to
enter into the Operating Partnership Agreement and become a
limited partner 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 Partners hereby agree as follows for the
benefit of the Investment Partnership, Investment General
Partner, Peabody & Xxxxx and certain other persons hereinafter
described.
1. Representations, Warranties and Covenants of the
Operating Partnership and
the Operating General Partners
The Operating Partnership and the Operating General Partners
jointly and severally represent, warrant and certify to the
Investment Partnership, Investment General Partner and Peabody &
Xxxxx that, with respect to the Operating Partnership, as of the
date hereof:
A. The Operating Partnership is duly organized and in good
standing as a limited partnership pursuant to the laws of the
state of its formation with full power and authority to own its
apartment complex (the "Apartment Complex") and conduct its
business; the Operating Partnership and the Operating General
Partners have the power and authority to enter into and perform
this Certification and Agreement; the execution and delivery of
this Certification and Agreement by the Operating Partnership and
the Operating General Partners have been duly and validly
authorized by all necessary action; the execution and delivery of
this Certification and Agreement, the fulfillment of its terms
and consummation of the transactions contemplated hereunder do
not and will not conflict with or result in a violation, breach
or termination of or constitute a default under (or would not
result in such a conflict, violation, breach, termination or
default with the giving of notice or passage of time or both) any
other agreement, indenture or instrument by which the Operating
Partnership or any Operating General Partner is bound or any law,
regulation, judgment, decree or order applicable to the Operating
Partnership or any Operating General Partner or any of their
respective properties; this Certification and Agreement
constitutes the valid and binding agreement of the Operating
Partnership and the Operating General Partners, enforceable
against each of them in accordance with its terms.
B. The Operating General Partners have delivered to the
Investment Partnership, Investment General Partner or their
affiliates all documents and information which would be material
to a prudent investor in deciding whether to invest in the
Operating Partnership. All factual information, including
without limitation the information set forth in Exhibit A hereto,
provided to the Investment Partnership, Investment General
Partner 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 statements for the
Operating General Partners and their 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 any of the Operating General
Partners 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 Operating General Partners.
C. As of the date hereof, each of the representations
contained in Exhibit B attached hereto is true, accurate and
complete as to each of the Operating Partnership and the
Operating General Partners and as to any of their affiliates, any
of their predecessors and their affiliates' predecessors, any of
their directors, officers, general partners and/or beneficial
owners of ten per cent (10%) or more of any class of their equity
securities (beneficial ownership meaning the power to vote or
direct the vote and/or the power to dispose or direct the
disposition of such securities), as the case may be, and any
promoters presently connected with them in any capacity.
D. Each of the representations and warranties contained in
the Operating Partnership Agreement is true and correct as of the
date hereof.
E. Each of the covenants and agreements of the Operating
Partnership and the Operating General Partners 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.
F. All conditions to admission of the Investment
Partnership as the investment limited partner of the Operating
Partnership contained in the Operating Partnership Agreement have
been satisfied.
G. No default has occurred and is continuing under the
Operating Partnership Agreement or any of the Project Documents
(as said term is defined in the Operating Partnership Agreement)
for the Operating Partnership.
H. No person or entity other than the Operating
Partnership holds any equity interest in the Apartment Complex.
I. 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.
J. 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.
K. 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.
L. No Operating General Partner is related in any manner
to the Investment Partnership, nor is any Operating General
Partner acting as an agent of the Investment Partnership.
M. The Apartment Complex contains no substance known to be
hazardous, such as hazardous waste, lead-based paint, asbestos,
methane gas, urea formaldehyde insulation, oil, toxic substances,
underground storage tanks, polychlorinated biphenals (PCBs), and
radon; the Apartment Complex is not affected by the presence of
oil, toxic substances, or other pollutants that could be a
detriment to the Apartment Complex nor is the Operating
Partnership in violation of any local, state, or federal law or
regulation; and no violation of the Clean Air Act, Clean Water
Act, Resource Conservation and Recovery Act, Toxic Substance
Control Act, Safe Drinking Water Control Act, Comprehensive
Environmental Resource Compensation and Liability Act, or
Occupational Safety and Health Act has occurred or is continuing.
Neither the Operating Partnership nor any Operating General
Partner has received any notice from any source whatsoever of the
existence of any such hazardous condition relating to the
Apartment Complex or of any violation of any local, state or
federal law or regulation with respect to the Apartment Complex.
N. 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.
O. The Apartment Complex is not in violation of any State
or local health or building code or regulation.
P. 1997 low-income housing tax credit authorization in the
amount of at least $246,895 per annum for the Property has been
obtained by the Partnership from the tax credit agency of the
Commonwealth of Pennsylvania and is in full force and effect.
Q. The Partnership has validly elected under
Section 42(b)(2)(A)(ii) of the Code to lock in a credit
percentage of 8.47% with respect to the qualified basis of the
Property.
R. All 20 dwelling units in the Apartment Complex 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.
S. All qualified low income dwelling units in the
Apartment Complex will be occupied by tenants under leases with
terms of not less than six months.
T. All rental units in the Apartment Complex are of equal
quality with comparable amenities available to low-income tenants
on a comparable basis without separate fees.
U. The Apartment Complex does not receive assistance under
the HUD Section 8 Moderate Rehabilitation Program.
V. The Operating General Partners agree to take all
actions necessary to claim the Projected Credit, including,
without limitation, the filing of Form(s) 8609 with the Internal
Revenue Service.
W. As of December 31, 1997, the Operating Partnership
owned the Apartment Complex and had a basis in the Apartment
Complex equal to at least 10% of its anticipated basis in the
Apartment Complex as of December 31, 1999, and all buildings in
the Apartment Complex will be placed in service for purposes of
Section 42 of the Code not later than December 31, 1999.
X. The Apartment Complex is located in a qualified census
tract for purposes of Section 42(d)(5)(B) of the Code.
Y. The allocation of 1997 low income housing tax credit to
the Apartment Complex was not made pursuant to the "nonprofit set
aside" provisions of Section 42 of the Code.
Z. A "qualified nonprofit organization" as defined in
Section 42(h)(5)(C) of the Code will materially participate in
the development and operation of the Project throughout the
compliance period.
AA. Either (a) rehabilitation expenditures with respect to
each building of the Apartment Complex allocable to low income
units during a twenty-four month period are (or will be) equal to
or greater than the greater of $3,000 per low income unit or 10%
of the unadjusted basis of the building or (b) rehabilitation
expenditures with respect to each building of the Apartment
Complex allocable to low income units during a twenty-four month
period are (or will be) equal to at least $3,000 per low income
unit and the building was acquired from a governmental unit.
BB. No building constituting part of the Apartment Complex
was placed in service during the 10-year period prior to its
acquisition by the Operating Partnership.
CC. During the 12-year period prior to its acquisition by
the Partnership, there have not been improvements added to
depreciable basis with respect to any building constituting part
of the Apartment Complex which, during any 24-month period,
aggregated 25% or more of the adjusted basis of such building
computed without taking into account depreciation deductions, and
with respect to which improvements either (a) five-year
amortization under Section 167(k) of the Code was elected or
(b) the depreciation rules governing property placed in service
between January 1, 1981 and December 31, 1986 applied.
DD. Those persons that are Partners of the Operating
Partnership and persons related to such partners (including
family members) owned 10% or less of the capital interests and
10% or less of the profits interests in the partnership or other
entity (including proportionate shares of interests owned
indirectly by partners of the Operating Partnership or such
related persons through corporations, partnerships, estates or
trusts) from which the Partnership acquired the Apartment
Complex.
EE. No part of the Apartment Complex will constitute tax-
exempt use property within the meaning of Section 168(h) of the
Code.
FF. No part of the Property nor its operation has been,
directly or indirectly, financed at any time with either (1) an
obligation the interests on which is exempt from tax under
Section 103 of the Code or (2) any loan funded in whole or in
part, directly or indirectly, with federal funds (other than
funds provided pursuant to Section 106, 107 or 108 of the Housing
and Community Development Act of 1974) if the interest rate
payable on such loan is less than the applicable federal rate in
effect under Section 1274(d)(1) of the Code (as of the date on
which the loan is made).
GG. The Partnership acquired the Apartment Complex from the
RDA in October, 1997 for a purchase price of $45,000. Neither
the amount of the purchase price nor the unconditional obligation
of the Partnership to pay the full purchase price for the
Apartment Complex has ever been in dispute. The Partnership paid
$4,500 of the purchase price in cash and intends to pay the
remaining $40,500 of the purchase price for the Apartment Complex
(which outstanding balance is evidenced by a promissory note from
the Partnership to the RDA) to the RDA out of the proceeds of the
Second Mortgage.
HH. The Partnership has not made, and will not make, an
election to be taxable as a corporation.
II. At least $41,994 of the Development Fee had been earned
by the Developer as of December 2, 1997 for services it had
rendered to the Partnership as of such date; no part of such fee
is subject to dispute; and the fee payable with regard to such
services is reasonable for the services rendered and did not
represent a prepayment for services to be rendered at a later
date.
2. Indemnification
A. The Operating General Partners (for purposes of this
Section 2.A, the "Indemnifying Parties" or, individually, an
"Indemnifying Party") agree to indemnify and hold harmless the
Investment Partnership, Investment General Partner (for purposes
of this Section 2.A, 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 biphenals (PCBs), and radon; and to reimburse
each such Indemnified Party and each such officer, director,
employee or controlling person for any legal or other expenses
reasonably incurred by it or them in connection with
investigating or defending against any such Liability or action;
provided, however, that 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.
B. No Indemnifying Party shall be liable under the
indemnity agreements contained in Section 2.A 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.A. 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.
3. Miscellaneous
A. This Certification and Agreement is made solely for the
benefit of the Operating Partnership, the Operating General
Partners, Investment General Partner, Peabody & Xxxxx and the
Investment Partnership (and, to the extent provided in Section 2,
the officers, directors, partners, employees and controlling
persons referred to therein), and their respective successors and
assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement.
B. 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.
C. 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.
IN WITNESS WHEREOF, the undersigned have set their hands and
seals as of the date first above written.
OPERATING PARTNERSHIP:
Belmont Affordable Housing II,
L.P.
By: T2G, Inc.
By: /s/Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, President
OPERATING GENERAL PARTNER:
T2G, Inc.
By: /s/Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, President
Attachments
Exhibit A Fact Sheet
Exhibit B Certificate re Lack of Disqualifications
Exhibit A
Belmont Affordable Housing II, L.P.
FACT SHEET
Construction
Financing
Lender:
Collaborative Lending Initiative
Mortgage Amount: $1,700,000
Note Date: October 20, 1997
Interest Rate:Prime Rate plus 2%
Guarantors: Xxxxxx & Xxxxxx Xxxxxx, WDC
Construction Company and TJ
Properties, Inc.
Term:
Due May 1, 1999
Fees: $25,500
Permanent First Mortgage Financing Lender:
PNC Bank
Mmortgage Amount: $300,000
Note Date: December 15, 1998
Interest Rate: 8.25%
Term: due December 15, 2013
Permanent Second Mortgage Financing Lender:
RDA
Mortgage Amount: $252,675
Note Date: January ___, 1999
Interest Rate: 1%
Term: 46 years
GP Capital
Contribution $37,453
Total Capital
Contribution of
Investment
Partnership $1,839,184
Schedule of
Capital Contribution $1,379,388
on the later of (i) the Admission
Date or (ii) the Completion Date;
$196,793
on the latest of (I) Cost
Certification, (ii) submission by
the operating Partnership to the tax
credit agency of all documentation
necessary to obtain State
Designation; and (iii) Permanent
Mortgage Commencement;
$76,016
on the later of (i) State
Designation or (ii) full
disbursement of Second Mortgage;
$176,987
on the later of (I) Initial 100%
Occupancy Date and (ii) Rental
Achievement; and
$10,000
on Rental Achievement Confirmation.
Fees and Other
Items to be paid
from Capital
Contributions
Construction and Development Fee:
$209,972
Direct
Development Costs: $1,629,212
Amount of annual
Asset Management Fee: $1,500
Amount of annual Partnership
Management Fee: $1,500
Amount of Incentive Management Fee:
Up to 25% of Cash Flow after
certain priorities (provided
aggregate of Incentive
Management Fee and Management
Fee shall not exceed 10% of
gross rents in any year)
Profits, Losses and
Tax Credits from Capital
Normal Operations Transactions Cash Flow
General Partner .01% 80% 80%
Investment Partnership 99.99% 19.999% 20%
Special Limited Partner 0% .001% 0%
The Special Limited Partner of the Operating Partnership is BCTC
94, Inc., an affiliate of the Partnership.
Construction Financing
Lender: Collaborative Lending
Initiative
Mortgage Amount: $1,700,000
Note Date: October 20, 1997
Interest Rate: Prime Rate plus 2%
Guarantors: Xxxxxx & Xxxxxx Xxxxxx,
WDC Construction Company and
TJ Properties, Inc.
Term: Due May 1, 1999
Fees: $25,500
Permanent First Mortgage Financing
Lender: PNC Bank
Mortgage Amount: $300,000
Note Date: December 15, 1998
Interest Rate: 8.25%
Term: due December 15, 2013
Permanent Second Mortgage Financing
Lender: RDA
Mortgage Amount: $252,675
Note Date: January ___, 1999
Interest Rate: 1%
Term: 46 years
GP Capital
Contribution $37,453
Total Capital
Contribution of
Investment Partnership $1,839,184
Schedule of Capital
Contributions
$1,379,388 on the later of (i) the Admission
Date or (ii) the Completion Date;
$196,793 on the latest of (I) Cost
Certification, (ii) submission by
the operating Partnership to the
tax credit agency of all
documentation necessary to obtain
State Designation; and (iii)
Permanent Mortgage Commencement;
$76,016 on the later of (i) State
Designation or (ii) full
disbursement of Second
Mortgage;
$176,987 on the later of (I) Initial
100% Occupancy Date and (ii)
Rental Achievement; and
$10,000 on Rental Achievement
Confirmation.
Fees and Other Items to be paid from Capital Contributions
Construction and Development Fee: $ 209,972
Direct Development Costs: $1,629,212
Amount of annual Asset Management
Fee: $ 1,500
Amount of annual Partnership Management
Fee $ 1,500
Amount of Incentive Management Fee: Up to 25% of Cash Flow after certain
priorities (provided aggregate of Incentive
Management Fee and Management Fee shall not
exceed 10% of gross rents in any year)
Ownership Interests Investment
General Partners Limited Partner
Profits, Losses
and Credits 0.01% 99.99%
Cash Flow 80% 20%
Capital Transaction 80% 20%
Type of Credit: Nine Percent
Eligible Basis: $2,324,843
Qualified Basis: $3,022,295
LIHC Rate: 8.47% (locked in)
Projected Credit To the: To the
Partnership Investment Partnership
(99.99%):
(Each of the years
1999 through 2008) $246,895 $246,870
per annum per annum
Tax Credit Approval
Application
Date: January 19, 1997
Credit Amount $253.385
Requested:
Reservation
Date: March 27, 1997
Credit Amount $253,385
Reserved:
Carryover Allocation
Date: November 21, 1997
Credit Amount $251,014
Allocated:
Final Allocation
(Form 8609)
Date: ________________, 199___
Credit Amount
Allocated: $_____________
Building Breakdown:
Unit #s 1 2 3 4 5 6 7 8 9
Number of units
in building 3 1 2 2 2 2 2 3 3
BIN # TC97-01048 TC97-02048 TC97-03048 TC97-04048
TC97-05048 TC97-06048 TC97-7048 TC97-0848 TC97-09048
Apartment Complex
Name: Belmont Affordable Housing Two Apartments
Address:
000 Xxxxx 00xx Xxxxxx
000 Xxxxx 00xx Xxxxxx
000 Xxxxx 00xx Xxxxxx
000 Xxxxx 00xx Xxxxxx
000 Xxxxx 00xx Xxxxxx
000 Xxxxx 00xx Xxxxxx
000 Xxxxx 00xx Xxxxxx
0000 Xxxx Xxxxxx Xxxxxx
4230 West Xxxxxx Avenue
Philadelphia, Pennsylvania
County: Philadelphia County
Type of Project: Rehabilitation
Area Median Income: $52,900
Type of Apartments:
Unit Size Number Square Feet Rent
2 bedroom 2 1,195 $480
3 bedroom 18 1,234 $510
Rent-up Schedule: Occupancy
percentage: 100%
As of the end of:January 31, 1999
Rental Assistance N/A
Annual Operating
Expenses (beginning 1999): $61,674
Reserve Account
Initial Deposit: $15,195
Annual Deposit: $ 5,100 per year
Projected gross annual
Cash Flow: $12,245
Amount of Total
Depreciable Base
Allocated to Personal
Property: $44,084
Completion Date: November, 1998
General Partner(s): T2G, Inc.
Address: 000 Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Telephone Number: (000) 000-0000
Contact Person: Xxxxxx Xxxxxx
Guarantors of General Partner
Obligations: Xxxxxx and Xxxxxx Xxxxxx
Management Agent: T.J. Properties, Inc.
Contact Person: Xxxxxx Xxxxxx
Address: 000 Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Telephone Number: (000) 000-0000
Amount of Fee: $6% of gross rents collected
Builder: WDC Construction
Address: 000 Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Amount of
Compensation: $1,724,847
Builder's Profit: $52,836
Architect: Xxxxx Xxxxxx
Address: 000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Amount of Fee: $27,500
Auditor:
Contact Person: Xxxx Xxxxxxxxx, CPA
Address: Cogen Xxxxx LLP
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Telephone Number: (000) 000-0000
Tax Return Preparer:
Contact Person: Xxxx Xxxxxxxxx, CPA
Address: Cogen Xxxxx LLP
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Telephone Number: (000) 000-0000
Federal Taxpayer
ID Number: __________________
Operating Deficit
Guaranty: The General Partner(s) shall be obligated commencing
Rental Achievement and continuing through the date which is four
years after Rental Achievement to advance any funds which may
be necessary to meet cash operating expenses which exceed cash
operating income, up to a maximum outstanding advance of $100,000.
Release of funds subject to RDA requirements.
Operating Deficit Reserve: The General Partner(s) shall cause
the Partnership to deposit $50,000 from the proceeds of the
Second Installment and $50,000 from the proceeds of the Fourth
Installment into a segregated reserve account for operating expenses.
Replacement Reserve: The General Partner(s) shall cause the
Partnership to initially deposit $15,195 from the Fourth
Installment and to deposit at least $5,100 annually into
the Replacement Reserve. The Replacement Reserve shall
be funded by the General Partner(s) in the event that
there is insufficient operating income to fund the
Replacement Reserve.
Real Estate/Insurance Escrow The General Partner(s)
shall be obligated to deposit $17,886 from the proceeds
of the Second Installment into a segregated reserve account
for real estate taxes and insurance premiums.
cc: Boston Capital Communications Limited Partnership
Accounting Department
Exhibit B
Certificate of Operating Partnership and
Operating General Partners Re: Lack of Disqualifications
The Operating Partnership and its Operating General
Partners (as identified on the Certification and Agreement
to which this Certificate is attached as Exhibit B) hereby
represent to you that neither (i) the Operating
Partnership, (ii) any predecessor of the Operating
Partnership, (iii) any of the Operating Partnership's
affiliates ("affiliate" meaning a person that controls or
is controlled by, or is under common control with,
the Operating Partnership), (iv) any sponsor (meaning any
person who (1) is directly or indirectly instrumental in
organizing the Operating Partnership or (2) will directly
or indirectly manage or participate in the management of
the Operating Partnership or (3) will regularly perform,
or select the person or entity who will regularly perform,
the primary activities of the Operating Partnership),
(v) any officer, director, principal or general partner of the
Operating Partnership or of any sponsor, (vi) any
officer, director, principal, promoter or general partner
of any Operating General Partner, (vii) any beneficial
owner of ten per cent or more of any class of the equity
securities of the Operating Partnership or of any sponsor
(beneficial ownership meaning the power to vote or direct
the vote and/or the power to dispose or direct the
disposition of such securities), (viii) any promoter
of the Operating Partnership (meaning any person who,
acting alone or in conjunction with one or more other
persons, directly or indirectly has taken, is taking or
will take the initiative in founding and organizing the
business of the Operating Partnership or any person who, in
connection with the founding and organizing of the business
or enterprise of the Operating Partnership, directly or
indirectly receives in consideration of services or
property, or both services and property, ten per cent or
more of any class of securities of the Operating
Partnership or ten per cent or more of the proceeds
from the sale of any class of such securities; provided,
however, a person who receives such securities or proceeds
either solely as underwriting commissions or solely in
consideration of property shall not be deemed a promoter if
such person does not otherwise take part in founding and
organizing the enterprise) presently connected with the
Operating Partnership in any capacity:
(1) Has filed a registration statement which is
the subject of any pending proceeding or examination under
the securities laws of any jurisdiction, or which is the
subject of a any refusal order or stop order thereunder
entered within five years prior to the date hereof;
(2) Has been convicted of or pleaded nolo
contendere to a 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 orfraudulent conduct, or
breach of fiduciary duty, or which is based upon a state
banking, insurance, real estate or securities
law or (c) has been the subject of any administrative
order, judgment or decree in any state in which fraud,
deceit, or intentional wrongdoing, including, but not
limited to, making untrue statements of material fact or
omitting to state material
facts, was found;
(4) Is subject to any pending proceeding in any
jurisdiction relating to the exemption from registration of
any security or offering, or to any order, judgment or
decree in which registration violations were found or
which prohibits, denies or revokes the use of any exemption
from registration in connection with the offer, purchase
or sale of securities, or to an SEC censure or other order
based on a finding of false filing;
(5) Is subject to any order, judgment or decree
of any court or regulatory authority of competent
jurisdiction entered within five years prior to the date
hereof, temporarily, preliminarily or permanently
restraining or enjoining such persons from engaging in or
continuing any conduct or practice in connection with any
aspect of the securities or commodities business or
involving the making of any false filing or arising
out of the conduct of the business of an underwriter,
broker, dealer, municipal securities dealer, or investment
adviser, or which restrains or enjoins such person from
activities subject to federal or state statutes designed to
protect consumers against unlawful or deceptive practices
involving insurance, banking, commodities, real estate,
franchises, business opportunities, consumer goods and
services, or is subject to a United States
Postal Service false representation order entered within
five years prior to the date hereof, or is subject to a
temporary restraining order or preliminary injunction with
respect to conduct alleged to have violated section 3005
of Xxxxx 00, Xxxxxx Xxxxxx Code;
(6) Is suspended or expelled from membership in,
or suspended or barred from association with a member of,
an exchange registered as a national securities exchange,
an association registered as a national securities
association, or any self-regulatory organization registered
pursuant to the Securities Exchange Act of 1934, or a
Canadian securities exchange, or association or self-
regulatory organization operating under the authority of
the Commodity Futures Trading Commission, or is subject to
any currently effective order or order entered within the
past five years of the SEC, the Commodity Futures Trading
Commission or any state securities administrator denying
registration to, or revoking or suspending the registration
of, such person as a broker-dealer, agent, futures
commission merchant, commodity pool operator, commodity
trading adviser or investment adviser or associated person
of any of the foregoing, or prohibiting the transaction of
business as a broker-dealer or agent;
(7) Has, in any application for registration or
in any report required to be filed with, or in any
proceeding before the SEC or any state securities
commission or any regulatory authority willfully made or
caused to be made any statement which was at the time and
in the light of the circumstances under which it was made
false or misleading with respect to any material fact, or
has willfully omitted to state in any such application,
report or proceeding any material fact which is required to
be stated therein or necessary in order to make the
statements made, in the light of the circumstances under
which they are made, not misleading, or has willfully
failed to make any required amendment to or supplement to
such an application, report or statement in a timely manner;
(8) Has willfully violated any provision of the
Securities Act of 1933, the Securities Exchange Act of
1934, the Trust Indenture Act of 1939, the Investment
Advisers Act of 1940, the Investment Company Act of 1940,
the Commodity Exchange Act of 1974 or the securities laws
of any state, or any predecessor law, or of any rule or
regulation under any of such statutes;
(9) Has willfully aided, abetted, counseled,
commanded, induced or procured the violation by any other
person of any of the statutes or rules or regulations
referred to in subsection (8) hereof;
(10) Has failed reasonably to supervise his
agents, if he is a broker-dealer, or his employees, if he
is an investment adviser, but no person shall be deemed to
have failed in such supervision if there have been
established procedures, and a system for applying such
procedures, which would reasonably be
expected to prevent and detect, insofar as practicable, any
violation of statutes, rules or orders described in
subsection (8) and if such person has reasonably discharged
the duties and obligations incumbent upon him by
reason of such procedures and system without reasonable
cause to believe that such procedures and system were not
being complied with;
(11) Is subject to a currently effective state
administrative order or judgment procured by a state securities
administrator within five years prior to the date hereof or is
subject to a currently effective United States Postal Service
fraud order or has engaged in dishonest or unethical practices in
the securities business or has taken unfair advantage of a
customer or is the subject of sanctions imposed by any state or
federal securities agency or self-regulatory agency;
(12) Is insolvent, either in the sense that his
liabilities exceed his assets or in the sense that he cannot meet
his obligations as they mature, or is in such financial condition
that he cannot continue his business with safety to his
customers, or has not sufficient financial responsibility to
carry out the obligations incident to his operations or has been
adjudged a bankrupt or made a general assignment for the benefit
of creditors; or
(13) Is selling or has sold, or is offering or has
offered for sale, in any state securities through any
unregistered agent required to be registered under the
Pennsylvania Securities Act of 1972, as amended (the
"Pennsylvania Act") or for any broker-dealer or issuer with
knowledge that such broker- dealer or issuer had not or has not
complied with the Pennsylvania Act.
(14) If the Operating Partnership is subject to the
requirements of Section 12, 14 or 15(d) of the Securities
Exchange Act of 1934, then the Operating Partnership has filed
all reports required by those Sections to be filed during the 12
calendar months preceding the date hereof (or for such shorter
period that the Operating Partnership was required to file such
reports).
