BOSTON CAPITAL TAX CREDIT FUND IV L.P.
_______________________________________
CERTIFICATION AND AGREEMENT
for
HURRICANE HILLS, L.C.
_______________________________________
CERTIFICATION AND AGREEMENT made as of September ___,1996, by
HURRICANE HILLS, L.C., a Utah limited liability company (the
"Company"); Xxxxx X. Xxxxx, as Member-Manager (the "Member-Manager")
for the benefit of BOSTON CAPITAL TAX CREDIT FUND IV L.P., a Delaware
limited partnership (the "Investment Member"),
BCTC 94, INC., a Delaware corporation (the "Special Member") and
Xxxxxxxx, Xxxxx & Xxxxxx and certain other persons or entities
described herein. The Investment Member and the Special Member shall
hereinafter be referred to as the "Tax Members."
WHEREAS, the Company proposes to admit the Tax Members as
members thereof pursuant to the Amended and Restated Operating
Agreement of the Company dated as of September ____, 1996 (the
"Operating Agreement"), in accordance with which the Special Member
will make a capital contribution of $10 to the Company and the
Investment Member will make certain capital contributions to the
Company.
WHEREAS, the Tax Members have relied upon certain information
and representations described herein in evaluating the merits of
investment by the Tax Members in the Company;
WHEREAS, Xxxxxxxx, Xxxxx & Xxxxxx, as counsel for the Tax
Members will rely upon such information and representations in
connection with its delivery of certain opinions with respect to this
transaction; and
WHEREAS, Jones, Waldo, Xxxxxxxx & XxXxxxxxx, as counsel for the
Company and the Member-Manger, will rely on such information and
representations in connection with its delivery of certain opinions
with respect to this transaction.
NOW, THEREFORE, to induce the Tax Members to enter into the
Company Agreement and become members of the Company, and for $1.00 and
other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Company and the Member-Manager
hereby agree as follows for the benefit of the Tax Members and
Xxxxxxxx, Xxxxx & Xxxxxx and certain other persons hereinafter
described.
1. Representations, Warranties and Covenants of the Operating
Partnership and the General Partners.
The Company and the Member-Manager jointly and severally
represent, warrant and certify to the Tax Members and Xxxxxxxx, Xxxxx
& Xxxxxx and Jones, Waldo, Xxxxxxxx & XxXxxxxxx that, with respect to
the Company, as of the date hereof:
1.01 The Company is duly organized and in good standing
as a limited liability company pursuant to the laws of the state of
its formation with full power and authority to own
Hurricane Hills (the "Apartment Complex") and conduct its business;
the Company and the Member-Manager 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 Company or the Member-Manager 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 Company or the Member-Manager is
bound or any law, regulation, judgment, decree or order applicable to
the Company, the Member-Manager any of their respective properties;
this Certification and Agreement constitutes the valid and binding
agreement of the Company and the Member-Manager enforceable against
each of them in accordance with its terms.
1.02 All factual information, including without
limitation the information set forth in Exhibit A hereto, provided to
the Tax Members 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 Member-Manager has also delivered to the Tax Members or
their affiliates all documents and other information which has been
requested by such parties. Since the date of the financial statements
for the Member-Manager previously delivered, there has been no
material adverse change in the financial position of said Member-
Manager. The estimates of occupancy rates, operating expenses and tax
credits set forth on Exhibit A are reasonable in light of the
knowledge and experience of the Member-Manager.
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 Company, the Member-Manager and as to any of their
affiliates, any of their predecessors and their affiliates'
predecessors, any of their directors, officers, general partners
and/or beneficial owners of ten per cent (10%)or more of any class of
their equity securities (beneficial ownership meaning the power to
vote or direct the vote and/or the power to dispose or direct the
disposition of such securities), as the case may be, and any promoters
presently connected with them in any capacity.
1.04 Each of the representations and warranties contained
in the Operating Agreement is true and correct as of the date hereof.
1.05 Each of the covenants and agreements of the Company
and the Member-Manager contained in the Operating Agreement has been
duly performed to the extent that performance of any covenant or
agreement is required on or prior to the date hereof.
1.06 All conditions to admission of the Tax Members as
members of the Company contained in the Operating Agreement have been
satisfied.
1.07 No default has occurred and is continuing under the
Operating Agreement or any of the Project Documents (as such term is
defined in the Operating Agreement) for the Company.
1.08 The Member-Manager agrees to take all actions
necessary to claim the Projected Credit, including, without
limitation, receiving and satisfying the conditions to a Carryover
Allocation Agreement with the Agency no later than December 31, 1996
(the "Carryover Allocation Agreement) and the filing of Forms 8609
with the Internal Revenue Service.
1.09 No person or entity other than the Company holds any
equity interest in the Apartment Complex.
1.10 The Company has the sole responsibility to pay all
maintenance and operating costs, including all taxes levied and all
insurance costs, attributable to the Apartment Complex.
1.11 The Company, except to the extent it is protected by
insurance and excluding any risk borne by lenders, bears the sole risk
of loss if the Apartment Complex is destroyed or condemned or there is
a diminution in the value of the Apartment Complex.
1.12 No person or entity except the Company has the right
to any proceeds, after payment of all indebtedness, from the sale,
refinancing, or leasing of the Apartment Complex.
1.13 The Member-Manager is not related in any manner to
the Tax Members, nor is the Member-Manager acting as an agent of the
Tax Members.
1.14 To the best of the undersigned's current knowledge
after due inquiry, the Apartment Complex does not contain in a level
above that deemed safe by all applicable governmental agencies, any
substance known to be hazardous, such as hazardous waste, lead-based
paint, asbestos, methane gas, urea formaldehyde insulation, oil, toxic
substances, underground storage tanks, polychlorinated biphenals
(PCBs), and radon; the Apartment Complex is not affected by the
presence of oil, toxic substances, or other pollutants that could be a
detriment to the Apartment Complex nor is the Company 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 Company nor the Member-Manager has received any notice
from any source whatsoever of the existence of any such hazardous
condition relating to the Apartment Complex or of any violation of any
local, state or federal law or regulation with respect to the
Apartment Complex.
1.15 To the best of the undersigned's current
knowledge, based on that certain real estate appraisal prepared by
Romney & Associates, Inc. and based upon the level of permanent debt
financing for the Project, it is expected that the fair market value
of the Company's building(s) at the end of each year will be greater
than the total amount of the Company's liabilities, including accrued
interest on such liabilities.
1.16 None of the Members of the Company is a tax-
exempt entity.
1.18 All representations made by the Member-Manager
in the Operating Agreement are incorporated herein by reference and
are confirmed.
1.19 There is a reasonable expectation that the
Company will be able to repay, as due, the principal and interest on
the projected loans to the Company based on the projected value of the
Company's property and building(s).
1.20 An Extended Use Commitment (as defined in the
Operating Agreement) within the meaning of Code Section 42(h)(6) will
be in effect with respect to the building(s) not later than the end of
the taxable year in which any credit is taken with respect to any
building.
1.21 The Apartment Complex is located in a
qualified census tract which qualifies the Apartment Complex for the
130% basis boost pursuant to Code Section 42.
1.22 The amounts payable in development and
property management fees to Xxxxx Construction Company and Xxxxx
Management, respectively, are fair in light of the value and magnitude
of the services rendered in consideration for such fees, and the
services performed in consideration for the development fees relate
solely to the acquisition or construction of the Apartment Complex.
1.24 For any building(s) not placed in service
prior to December 31, 1996, (i) the Company's basis in such building
(including its respective lot) as of the close of 1996 will be more
than 10% of the Company's reasonably expected basis in such building
as of the close of calendar year 1996 and (ii) the Company will enter
into a Carryover Allocation Agreement with the Agency no later than
December 31, 1996.
The Company expects to incur basis - eligible
expenses no later than December 31, 1996 in the following categories,
and it is reasonable to project that those expenses will be incurred
by the Company by December 31, 1996:
Estimated Percent of Total
Reasonably
Type of Cost Expected Project Basis
Acquisition
Construction
- Hard Costs
- Soft Costs
Developer's Fee (not more than
20%)
Pre-Development
Other
1.25 Each of the representations made by the
Member-Manager in the conditional credit Reservation Letter between
the Agency and the Company dated as of May 1, 1996 (the "Credit
Reservation Agreement") is true and correct as of the date hereof.
1.26 Each of the covenants, agreements, and conditions
contained in the Credit Reservation Agreement has been duly performed
or satisfied by the Company or its Member-Manager, as applicable, to
the extent that performance of any such covenant or agreement or
satisfaction of any condition is required on or prior to the date
hereof, and the Member-Manager has no reason to believe that the
covenants, agreements, and conditions of such Credit Reservation
Agreement and the Carryover Agreement required to be performed or
satisfied after the date hereof will not be performed or satisfied in
a timely manner.
1.27 The Member-Manager has not received from the Agency
any notice of default or of withdrawal or cancellation of the Tax
Credit reservation or allocation to the Company as described in the
Credit Reservation Agreement.
1.28 At the time the Tax Members are admitted into the
Company, the Member-Manager will have an aggregate net worth
calculated in accordance with generally accepted accounting principals
but not including the value of any equity or debt interest such
Member-Manger as in the Company, equal to at least ten percent (10%)
of the Capital Contributions to the Company, or in the alternative the
Member-Manager shall at the time the Tax Members are admitted into the
Company, satisfy at least one of the requirements set forth in the
last sentence of Section 4.07of Internal Revenue Service Procedure 89-
12, as the same may be modified from time to time.
1.29 The Member-Manager will not reduce its aggregate
interest, as Member-Manager, in the Company below 1% of all material
items of the Company income, gain, loss, deduction, and credit.
1.30 The Member-Manager and any entity that is related to
such Member-Manager, or to the Company and that receives a fee from
the Company, directly or indirectly, is on the accrual method of
accounting for tax purposes.
1.31 Xxxxx Construction Company is the developer of the
Apartment Complex pursuant to the Development Agreement by and between
the Company and Xxxxx Construction Company dated as of September ___,
1996 (the "Development Agreement"), and is on a cash-basis method of
accounting for tax purposes.
1.32 The Member-Manager will be actively involved in the
management and operation of the Company, will devote substantial and
continuing attention to the activities of the Company, and will
provide substantial services to the Company.
1.33 The development and leasing activity in which the
Company will engage will not contain any material personal or
recreational benefit for the members of the Company.
1.34 The Company will keep active records and carry out
the proposed activity in a manner consistent with profitable
businesses in the same activity.
1.35 The Company will have an objective to carry on
businesses for profit and divide the gains therefrom.
1.36 The Company may earn a profit, including profit from
appreciation in the value of the Apartment Complex.
1.37 The Mortgage Loans and all other debt financing of
the Apartment Complex requires the noncontingent repayment of
principal on or before a fixed maturity date, and will be considered
and treated as a loan by lender.
1.38 None of the Company's lenders is a party from whom
the Company acquired any portion of the Apartment Complex, and none of
the financing was issued in exchange for any portion of the Apartment
Complex. None of the Company's lenders will receive a fee with
respect to the Company's investment in the Apartment.
1.39 Following is a description of any and all existing
or proposed financing of the Apartment Complex that involves any
direct or indirect grant or federal subsidy (including without
limitation federal grants, below-market interest rate loans, and tax-
exempt bonds): None.
1.40 The Project will not receive moderate rehabilitation
assistance under Section 8(e)(2) of the United States Housing Act of
1937 (unless pursuant to the Xxxxxxx X. XxXxxxxx Homeless Assistance
Act of 1988).
1.41 If the Apartment Complex is a scattered site project
within the meaning of Code Section 42, 100% of the rental units in the
Apartment Complex will be rent-restricted within the meaning of Code
Section 42.
1.42 All Units in the Apartment Complex are to be of
equal quality and all Apartment Complex amenities are to be made
available to all tenants on a comparable basis without separate fees.
2. Indemnification
2.01 The Member-Manager (for purposes of this Section
2.01, an "Indemnifying Party") agrees to indemnify and hold harmless
the Tax Members (for purposes of this Section 2.01, the "Indemnified
Parties" or, individually, an "Indemnified Party") and each officer,
director, employee and person, if any, who controls any Indemnified
Party against and from any and all claims, suits, actions, debts,
damages, costs, charges, losses, obligations, judgments, and expenses,
of any nature whatsoever, suffered or incurred by the Investment
Member, under or on
account of the Hazardous Waste Laws or any similar laws or
regulations, including the assertion of any lien thereunder, except
for claims, suits, actions, debts, damages, costs,
charges, losses, obligations, judgments, or expenses arising from the
Investment Member's own negligence, misconduct or fraud. For purposes
of this Certification and Agreement, "Hazardous Substances" means oil,
petroleum or chemical liquids or solids, liquid or gaseous products or
any hazardous wastes or hazardous substances, as those terms are used
in the Hazardous Waste Laws; and "Hazardous Waste Laws" means the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, and any other federal, state or local law governing Hazardous
Substances, as such laws may be amended from time to time.
This indemnity agreement shall remain in full force and effect
notwithstanding any investigation made by any party hereto, shall
survive the termination of any agreement which refers to this
indemnity and shall be in addition to any liability which the
Indemnifying Party may otherwise have.
2.02 No Indemnifying Party shall be liable under the
indemnity agreements contained in Section 2.01 unless the Indemnified
Party shall have notified the Indemnifying Party in writing within
forty-five (45) business days after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon the Indemnified Party or any such of its officers,
directors, employees or controlling persons, but failure to notify an
Indemnifying Party of any such claim shall not relieve it from any
liability which it may have to the Indemnified Party or any such of
its officers, directors, employees or controlling persons against whom
action is brought otherwise than on account of its indemnity agreement
contained in Section 2.01. In case any action is brought against any
Indemnified Party or any such of its officers, directors, employees or
controlling persons upon any such claim, and it notifies the
Indemnifying Party of the commencement thereof as aforesaid, the
Indemnifying Party shall be entitled to participate at its own expense
in the defense, or, if it so elects, in accordance with arrangements
satisfactory to any other Indemnifying Party or parties similarly
notified, to assume the defense thereof, with counsel who shall be
reasonably satisfactory to such Indemnified Party or any such of its
officers, directors, employees or controlling persons and any other
Indemnified Parties who are defendants in such action; and after
notice from the Indemnifying Party to such Indemnified Party or any
such of its officers, directors, employees or controlling persons of
its election so to assume the defense thereof and the retaining of
such counsel by the Indemnifying Party, the Indemnifying Party shall
not be liable to such Indemnified Party or any such of its officers,
directors, employees or controlling persons for any legal or other
expenses subsequently incurred by such Indemnified Party or any such
of its officers, directors, employees or controlling persons in
connection with the defense thereof.
3. Miscellaneous
3.01 This Certification and Agreement is made solely for
the benefit of the Company, the Member-Manager, Xxxxxxxx, Xxxxx &
Xxxxxx and the Tax Members (and, to the extent provided in Section 2,
the officers, directors, partners, employees and controlling persons
referred to therein), and their respective successors and assigns, and
no other person shall acquire or have any right under or by virtue of
this Agreement.
3.02 This Certification and Agreement may be executed in
several counterparts, each of which shall be deemed to be an original,
all of which together shall constitute one and the same instrument.
3.03 Terms defined in the Operating Agreement but not
otherwise defined herein shall have the meanings given them in the
Operating Agreement.
IN WITNESS WHEREOF, the undersigned have set their hands and
seals as of the date first above written.
COMPANY:
HURRICANE HILLS, L.C.
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx,
Member-Manger
EXHIBIT A
HURRICANE HILLS, L.C.
FACT SHEET
1. Projected Sources and Uses of Funds
Sources of Funds
Perm. Mort Loan - ARCS
Commercial Co., L.P.
1,000,000.00
Xxxxx Xxxxxx Trust
312,500.00
Deferred Development Fee
Obligation
0.00
Capital Contributions:
Member-Manager
100.00
Investment Member
2,242,394.00
$3,554,994.00
Application of Funds
Total Construction Cost
2,659,700.00
Architectural (Designer) &
Engineering Fees
29,500.00
Land Cost or Value
150,000.00
Tax Credit Fees
0.00
Profit & Overhead
200,000.00
Interim Costs 151,500.00
Financing Fees & Expenses
45,000.00
Syndication Costs
6,000.00
Contingency
105,694.00
Other Soft Costs & Fees
7,600.00
Constr. & Development Fee
200,000.00
$3,554,994.00
2. Construction Financing
A. Lender: Bank One, Arizona, N.A.
B. Mortgage Amount: 1,840,000
C. Note Date: September ____, 1996
D. Interest Rate: Variable at Two
percent (2%) over Bank One Prime Rate
E. Term: 12 months with one
3-month extension option
3. Permanent Financing
(i) First Mortgage
A. Lender: ARCS Commercial
Mortgage Co., L.P.
B. Mortgage Amount: 1,000,000
C. Note Date: ______________________
D. Interest Rate: Fixed Rate to be
set prior to closing at rate
equal to the sum of the Pass-
Through Rate plus the Servicing
Fee, plus the Hedge Fee (as defined
in corresponding permanent financing
loan documents)
E. Term: 300 months
(ii) Second Mortgage
A. Lender: Xxxxx Xxxxxx Housing Trust Fund
B. Mortgage Amount: 312,500
C. Note Date:__________________
D. Interest Rate: 2.5% for Initial Four Year Term
adjusting to 5% in Year Five
E. Term: 360 months
4. Eligible Basis: $3,340,700
5. Qualified Basis: $4,342,910
6. Member-Manager Capital Contribution: $100
7. Type of Credit:
8. Rent-up Schedule:
34% by March 31, 1997 17 units
34% by April 30, 1997 17 units
16% by May 31, 1996 16 units
9. Projected Credit to the
Investment Member (99%):
A. $276,317 for 1997
B. $367,606 per annum for each
of the years 1998 through 2006
C. $91,289 for 2007
10. Tax Credit Approval:
A. Application:
1. Date: February 28, 1996 (for a March 3, 1996
Reservation Cycle)
2. Credit Amount Requested: $389,500.00 (annual)
B. Credit Reservation (Conditional)
1. Date: May 1, 1996
2. Credit Amount Reserved: $370,117.00 (annual)
C. Carryover Allocation:
1. Date:
2. Credit Amount Allocated: $
D. Credit Rate Lock-in Agreement
1. Date:
2. Rate locked-in:
E. Form 8609
1. Date:
2. Credit Amount Allocated:
11. Apartment Complex:
A. Name: Hurricane Hills
B. Address: 2072 West 70 South
C. County: Washington
D. Type of Project: Twenty-Five (25) single-story duplexes
containing a total of Fifty (50) units
12. 1994 Area (Washington County) Median Income: $32,900
13. Type of Apartments: Garden Style Units in Three Story Building
Unit Basic Utility Total
Number Square Ft. Rent Allowance Rent
2-Bedroom 50 $365 $60.40
$365
14. Difference between rents allowed
by FMHA and rents allowed under
the Rent Restriction Test: N/A
15. Rental Assistance: None
16. Annual Operating Expenses: $80,652 (1998 first full year)
17. Replacement Reserve Account
A. Annual: $ 7,500.00
B. Total: ___________.__
18. Operating Reserve Account: $ 0.00
19. Amount of Annual Asset Management Fee
to Boston Capital Communications
Tax Membership: $ 5,000.00
20. Amount of Annual Incentive Company
Management Fee: $ 5,000.00
21. Amount of Total Depreciable
Basis Allocated to Personal
Property: $51,975.00
22. Completion Date: September 30, 1997
23. Total Capital Contribution of
Investment Member: $2,242,394.00
24. Schedule of Capital Contributions:
A. $1,111,197 on latest to occur of:
(i) Admission Date,
(ii) Tax Credit Set Aside,
(iii) Closing of Construction Mortgage Loan, or
(iv) Permanent Mortgage Loan Commitment.
B. $811,197 on the latest to occur of:
(i) Completion Date,
(ii) Cost Certification,
(iii) State Designation,
(iv) Receipt of updated title insurance policy,
(v) Compliance with due diligence recommendations,
(vi) Receipt of payoff letter from contractor,
(vii) Receipt of estoppel letter from lender, or
(viii) Satisfaction of all prior conditions.
C. $300,000 on the latest to occur of:
(i) Initial 94% Occupancy Date,
(ii) Permanent Mortgage Commencement,
(iii) Rental Achievement, or
(iv) Satisfaction of all prior conditions.
D. $20,000 on the latest to occur of:
(i) Receipt of tax return and audited financial,
statements for the year in which rental achievement
occurs, or
(ii) Satisfaction of all prior conditions.
25. Fees, Special Distributions and Other Items to be paid
from
Capital Contributions
A. Development Fee: $200,000 (entire
Development Fee paid
from Capital
Contributions)
B. Special Return of Member-Manager Capital N/A
26. Consulting
Fee to Boston Capital N/A
Partners, Inc.
27. Member-Manager: Xxxxx X. Xxxxx
Address: 0000 Xxxxxxxx Xxxxxx
Xx. Xxxxxx, Xxxx 00000
Telephone Number: (000) 000-0000
28. Developer: Xxxxx Construction Company
Address: 0000 Xxxxxxxx Xxxxxx
Xx. Xxxxxx, Xxxx 00000
Telephone Number: (000) 000-0000
29. Ownership Interests
Operating
Tax Credit Capital
Cash
Allocations Transactions
Flow
Member-Manager: 10.00% 80.00% 80.00%
Investment Member: 99.00% 20.00% 20.00%
Special Member: 0.00% 0.00%
0.00%
30. Management Agent: Xxxxx Xxxxx Management
Contact Person: Xxxxx X. Xxxxx
Address: 0000 Xxxxxxxx Xxxxxx
Xx. Xxxxxx, Xxxx 00000
Telephone Number: (000) 000-0000
Amount of Fee: 6% of Gross Receipts
31. Builder: Xxxxx Construction Company
Address: 0000 Xxxxxxxx Xxxxxx
Xx. Xxxxxx, Xxxx 00000
Amount of Compensation: Contract sum of $3,549,200.00
subject to additions and deductions as provided in the Contract
Documents
Builder's Profit: $100,000
Builder's Overhead: $100,000
32. Architect: Xxxx Xxxxxxx
c/o Residential Home Designers
000 Xxxxx Xxxxx Xx. 0
Xx. Xxxxxx, Xxxx 00000
Amount of Fee: $29,500.00
33. Auditor: Xxxxxx Xxxxxx, CPA
Contact Person: Xxxxxx Xxxxxx
Address: 000 Xxxxx Xxxx Xxxxxx, Xxxxx X
Xxxxx Xxxx, Xxxx 00000
Telephone Number: (000) 000-0000
34. Tax Return Preparer: Xxxxxx Xxxxxx, CPA
Contact Person: Xxxxxx Xxxxxx
Address: 000 Xxxxx Xxxx Xxxxxx, Xxxxx X
Xxxxx Xxxx, Xxxx 00000
35. Federal Taxpayer ID Number for Hurricane Hills, LC: 00-0000000
Federal Taxpayer ID Number for Xxxxx Construction Company:
00-0000000
36. State Housing Credit Agency: Utah Housing Finance
Agency
37. State Housing Agency LIHTC Number: _____________
38. Operating Deficit Guaranty The Member-Manager shall
provide
a five (5) year unlimited
operating deficit guarantee;
in years 6-10, the operating deficit
guaranty shallbe backed by a Letter of
Credit in the maximum
principal amount equal to
$20,000 renewable each;
additionally the Member-
Manager shall provide funds
as necessary to pay
Operating Deficits; but in
the event that such loans
are not made, the Company
shall utilize amounts
otherwise payable to the
Developer as installments of
the Development Fee, as
applicable.
39. Guarantor(s): Xxxxx X. Xxxxx guarantees all obligations and
duties of the Member-Manager
cc: Boston Capital Communications Tax Membership Accounting
Department
Exhibit B
Certificate of Company
and Member-Manager
Re: Lack of Disqualifications
The Company and its Member-Manager (as identified on the Amended
and Restated Certification and Agreement to which this Certificate is
attached as Exhibit B) hereby represent to you that none of (i) the
Company, (ii) any predecessor of the Company, (iii) any of the
Company's affiliates ("affiliate" meaning a person that controls or is
controlled by, or is under common control with, the Company), (iv) any
sponsor (meaning any person who (1) is directly or indirectly
instrumental in organizing the Company or (2) will directly or
indirectly manage or participate in the management of the Company or
(3) will regularly perform, or select the person or entity who will
regularly perform, the primary activities of the Company), (v) any
member-manager, manager, officer, director, principal or general
partner of the Company or of any sponsor, (vi) the officer, director,
principal, promoter or general partner of any Member-Manager or
Manager, (vii) any beneficial owner of ten percent or more of any
class of the equity securities of the Company 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 Company (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 Company or
any person who, in connection with the founding and organizing of the
business or enterprise of the Company, directly or indirectly receives
in consideration of services or property, or both services and
property, ten percent or more of any class of securities of the
Company or ten percent 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 Company 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 en joins such person from
activities subject to federal or state statutes designed to protect
consumers against unlawful or deceptive practices involving insurance,
banking, commodities, real estate, franchises, business opportunities,
consumer goods and services, or is subject to a United States Postal
Service false representation order entered within five 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 Utah Securities Law of
______, as amended (the "Utah Act") or for any broker-dealer or issuer
with knowledge that such broker- dealer or issuer had not or has not
complied with the Utah Act. If the Company is subject to the
requirements of Section 12, 14 or 15(d) of the Securities Exchange Act
of 1934, then the Company 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 Company was required to
file such reports).
