PECAN MANOR APARTMENTS PARTNERSHIP, A
LOUISIANA PARTNERSHIP IN COMMENDAM
CERTIFICATION AND AGREEMENT
CERTIFICATION AND AGREEMENT made as of July 10, 1998, by
Pecan Manor Apartments Partnership, A Louisiana Partnership In
Commendam (the Partnership); X. Xxxxxx Xxxxxxx, Jr., as its
Managing General Partner; Community Support Programs, Inc., as
its General Partner (the Managing General Partner and the General
Partner are collectively referred as the General Partners); and
T.F. Management, Inc., its limited partner (the Withdrawing
Original Limited Partner) for the benefit of Boston Capital Tax
Credit Fund IV, L.P., a Delaware limited partnership
(specifically Series 32 thereof) (the Investment Limited
Partner); BCTC 94, Inc., a Delaware corporation, and Peabody &
Xxxxx, and certain other persons or entities described herein.
WHEREAS, the Partnership proposes to admit the Investment
Limited Partner and the Special Limited Partner as limited
partners thereof pursuant to Amended and Restated Articles of
Partnership In Commendam of the Partnership, dated as of July 10,
1998 (the Partnership Agreement), and in accordance with which
the Investment Limited Partner will make substantial capital
contributions to the Partnership;
WHEREAS, the Investment Limited Partner, the Special Limited
Partner and Boston Capital have relied upon certain information
and representations described herein in evaluating the merits of
investment by the Investment Limited Partner in the Operating
Partnership; and
WHEREAS, Peabody & Xxxxx, as counsel for the Investment
Limited Partner, will rely upon such information and
representations in connection with its delivery of certain
opinions with respect to this transaction;
NOW, THEREFORE, to induce the Investment Limited Partner and
the Special Limited Partner to enter into the Partnership
Agreement and become limited partners of the Partnership, and for
$1.00 and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Partnership, the
General Partners and the Withdrawing Original Limited Partner
hereby agree as follows for the benefit of the Investment Limited
Partner, the Special Limited Partner, Boston Capital and Peabody
& Xxxxx, and certain other persons hereinafter described.
1. Representations, Warranties and Covenants of the
Partnership and the General Partners
The Partnership and the General Partners jointly and
severally, and in solido, represent, warrant and certify to the
Investment Limited Partner, the Special Limited Partner, Boston
Capital, and Peabody & Xxxxx that, with respect to the
Partnership, as of the date hereof:
1.01 The Partnership is duly organized as a limited
partnership pursuant to the laws of the State of Louisiana with
full power and authority to own the apartment complex (the
Apartment Complex) and conduct its business; the Partnership,
the General Partners and the Withdrawing Original Limited Partner
have the power and authority to enter into and perform this
Certification and Agreement; the execution and delivery of this
Certification and Agreement by the Partnership, the General
Partners and the Withdrawing Original Limited Partner have been
duly and validly authorized by all necessary action; the
execution and delivery of this Certification and Agreement, the
fulfillment of its terms and consummation of the transactions
contemplated hereunder do not and will not conflict with or
result in a violation, breach or termination of or constitute a
default under (or would not result in such a conflict, violation,
breach, termination or default with the giving of notice or
passage of time or both) any other agreement, indenture or
instrument by which the Partnership or General Partners or
Withdrawing Original Limited Partner are bound or any law,
regulation, judgment, decree or order applicable to the
Partnership or the General Partners or the Withdrawing Original
Limited Partner or any of their respective properties; this
Certification and Agreement constitutes the valid and binding
agreement of the Partnership, the General Partners and the
Withdrawing Original Limited Partner, enforceable against each of
them in accordance with its terms.
1.02 The General Partners have delivered to the Investment
Limited Partner, the Special Limited Partner and Boston Capital
or their affiliates all documents and information which would be
material to a prudent investor in deciding whether to invest in
the Partnership. All factual information, including without
limitation the information set forth in Exhibit A hereto,
provided to the Investment Limited Partner, the Special Limited
Partner, Boston Capital or their affiliates either in writing or
orally, did not, at the time given, and does not, on the date
hereof, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light
of the circumstances under which they are made. The financial
statements for the 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
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 General Partners.
1.03 As of the date hereof, each of the representations
contained in Exhibit B attached hereto is true, accurate and
complete as to each of the Partnership, the General Partners and
the Withdrawing Original Limited Partner and as to any of their
affiliates, any of their predecessors and their affiliates,
predecessors, any of their directors, officers, general partners
and/or beneficial owners of ten percent (10%) or more of any
class of their equity securities (beneficial ownership meaning
the power to vote or direct the vote and/or the power to dispose
or direct the disposition of such securities), as the case may
be, and any promoters presently connected with them in any
capacity.
1.04 Each of the representations and warranties contained
in the Partnership Agreement is true and correct as of the date
hereof.
1.05 Each of the covenants and agreements of the
Partnership and the General Partners contained in the Partnership
Agreement have been duly performed to the extent that performance
of any covenant or agreement is required on or prior to the date
hereof.
1.06 All conditions to admission of the Investment Limited
Partner and the Special Limited Partner as the limited partners
of the Partnership contained in the Partnership Agreement have
been satisfied.
1.07 No default has occurred and is continuing under the
Partnership Agreement or any of the Project Documents (as said
term is defined in the Partnership Agreement) for the
Partnership.
1.08 The General Partners agree to take all actions
necessary to claim the Projected Credit, including, without
limitation, the filing of a Form 8609 with the Internal Revenue
Service.
1.09 No person or entity other than the Partnership holds
any equity interest in the Apartment Complex.
1.10 The Partnership has the sole responsibility to pay all
maintenance and operating costs, including all taxes levied and
all insurance costs, attributable to the Apartment Complex.
The Partnership, except to the extent it is protected by
insurance and excluding any risk borne by the Lenders, bears the
sole risk of loss if the Apartment Complex is destroyed or
condemned or there is a diminution in the value of the Apartment
Complex.
1.12 No person or entity except the Partnership has the
right to any proceeds, after payment of all indebtedness, from
the sale, refinancing, or leasing of the Apartment Complex.
1.13 The General Partners are not related in any manner to
the Investment Limited Partner, the Special Limited Partner or
Boston Capital nor are the General Partners acting as an agent of
the Investment Limited Partner, the Special Limited Partner or
Boston Capital.
1.14 The Apartment Complex contains no substance known to
be hazardous, such as hazardous waste, lead-based paint,
asbestos, methane gas, urea formaldehyde insulation, oil, toxic
substances, underground storage tanks, polychlorinated biphenyls
(PCBs), and radon; the Apartment Complex is not affected by the
presence of oil, toxic substances, or other pollutants that could
be a detriment to the Apartment Complex nor is the Partnership in
violation of any local, state, or federal law or regulation; and
no violation of the Clean Air Act, Clean Water Act, Resource
Conservation and Recovery Act, Toxic Substance Control Act, Safe
Drinking Water Control Act, Comprehensive Environmental Resource
Compensation and Liability Act, or Occupational Safety and Health
Act has occurred or is continuing. Neither the Partnership nor
the General Partners nor the Withdrawing Original Limited Partner
have received any notice from any source whatsoever of the
existence of any such hazardous condition relating to the
Apartment Complex or of any violation of any local, state or
federal law or regulation with respect to the Apartment Complex.
1.15 The fair market value of the Apartment Complex exceeds
the total amount of indebtedness encumbering the Apartment
Complex and is expected to continue to do so throughout the term
of such indebtedness.
1.16 The Apartment Complex is not in violation of any State
of local health or building code or regulation.
1.17 The 1998 low-income housing tax credit authorization
in the amount of at least $208,620 per annum for the Property has
been obtained by the Partnership from the tax credit agency of
the State of Louisiana and is in full force and effect.
1.18 The Partnership has validly elected under Section
42(b)(2)(A)(ii) of the Code to lock in a credit percentage of
8.53% with respect to the qualified basis of the Property.
1.19 All 40 dwelling units in the Property will be leased
to persons who satisfy the income restrictions under Section
42(g)(1) of the Code at rents satisfying the rent restrictions of
Section 42(g)(2) of the Code.
1.20 All qualified low income dwelling units in the
Property will be occupied by tenants under leases with terms of
not less than six months.
1.21 All rental units in the Property are of equal quality
with comparable amenities available to low-income tenants on a
comparable basis without separate fees.
1.22 The Apartment Complex does not receive assistance
under HUD Section 8 Moderate Rehabilitation Program.
1.23 The Partnership will, as of December 31, 1998, own the
Apartment Complex and have a basis in the Apartment Complex equal
to at least 10% of its anticipated basis in the Apartment Complex
as of December 31, 2000, and all buildings in the Apartment
Complex will be placed in service for the purposes of the Code
not later than December 31, 2000.
1.24 The allocation of 1998 low income housing tax credit
to the Property was not made pursuant to the nonprofit set
aside provisions of Section 42 of the Code.
1.25 The Apartment Complex is located in a difficult to
develop area for the purposes of Section 42(d)(5)(B) of the Code.
2. Indemnification
2.01 The Managing General Partner (for purposes of this
Section 2.01, (the Indemnifying Party) agrees to indemnify and
hold harmless the Investment Limited Partner, the Special Limited
Partner and Boston Capital (for purposes of this Section 2.01,
the Indemnified Parties or, individually, an Indemnified
Party) and each officer, director, employee and person, if any,
who controls any party against any losses, claims, damages or
liabilities (collectively, Liabilities), joint or several, to
which any Indemnified Party or such officer, director, employee
or controlling person may become subject, insofar as such
Liabilities or actions in respect thereof arise out of or are
based upon (i) a breach by such Indemnifying Party of any of his
representations, warranties or covenants to such Indemnified
Party or any such of its officers, directors, employees or
controlling persons under this Certification and Agreement or
(ii) liability under any statute, regulation, ordinance, or other
provision of federal, state, or local law or any civil action
pertaining to the protection of the environment or otherwise
pertaining to public health or employee health and safety,
including, without limitation, protection from hazardous waste,
lead-based paint, asbestos, methane gas, urea formaldehyde
insulation, oil, toxic substance, underground storage tanks,
polychlorinated biphenyls (PCBs), and radon; and to reimburse
each such Indemnified Party and each such officer, director,
employee or controlling person for any legal or other expenses
reasonably incurred by it or them in connection with
investigating or defending against any such Liability or action;
provided, however, that the Indemnifying Party shall not be
required to indemnify any Indemnified Party or any such officer,
director, employee or controlling person for any payment made to
any claimant in settlement of any Liability or action unless such
payment is approved by the Indemnifying Party or by a court
having jurisdiction of the controversy. This indemnity agreement
shall remain in full force and effect notwithstanding any
investigation made by any party hereto, shall survive the
termination of any agreement which refers to this indemnity and
shall be in addition to any liability which the Indemnifying
Party may otherwise have.
2.02 The Indemnifying Party shall not be liable under the
indemnity agreements contained in Section 2.01 unless the
Indemnified Party shall have notified the Indemnifying Party in
writing within forty-five (45) business days after the summons or
other first legal process giving information of the nature of the
claim shall have been served upon the Indemnified Party or any
such of its officers, directors, employees or controlling
persons, but failure to notify an Indemnifying Party of any such
claim shall not relieve it from any liability which it may have
to the Indemnified Party or any such of its officers, directors,
employees or controlling persons against whom action is brought
otherwise than on account of its indemnity agreement contained in
Section 2.01. In case any action is brought against any
Indemnified Party or any such of its officers, directors,
employees or controlling persons upon any such claim, and it
notifies the Indemnifying Party of the commencement thereof as
aforesaid, the Indemnifying Party shall be entitled to
participate at their own expense in the defense, or, if they so
elect, in accordance with arrangements satisfactory to the any
Indemnifying Party or parties similarly notified, to assume the
defense thereof, with counsel who shall be satisfactory to such
Indemnified Party or any such of its officers, directors,
employees or controlling persons and any other Indemnified Party
who are defendants in such action; and after notice from the
Indemnifying Party to such Indemnified Party or any such of its
officers, directors, employees or controlling persons of its
election so to assume the defense thereof and the retaining of
such counsel by the Indemnifying Party, the Indemnifying Party
shall not be liable to such Indemnified Party or any such of its
officers, directors, employees or controlling persons for any
legal or other expenses subsequently incurred by such Indemnified
Party or any such of its officers, directors, employees or
controlling persons in connection with the defense thereof, other
than the reasonable costs of investigation.
3. Miscellaneous
3.01 This Certification and Agreement is made solely for
the benefit of the Partnership, the General Partners, the
Withdrawing Original Limited Partner, the Investment Limited
Partner, the Special Limited Partner, Boston Capital and Peabody
& Xxxxx (and, to the extent provided in Section 2, the officers,
directors, partners, employees and controlling persons referred
to therein), and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue
of this Agreement.
3.02 This Certification and Agreement may be executed in
several counterparts, each of which shall be deemed to be an
original, all of which together shall constitute one and the same
instrument.
3.03 Terms defined in the Partnership Agreement and used but
not otherwise defined herein shall have the meanings given to
them in the Partnership Agreement.
IN WITNESS WHEREOF, the undersigned have set their hands and
seals as of the date first above written.
PARTNERSHIP: PECAN MANOR APARTMENTS
PARTNERSHIP, A LOUISIANA
PARTNERSHIP IN COMMENDAM
/s/ X. Xxxxxx Xxxxxxx, Jr.
By: X. Xxxxxx Xxxxxxx, Jr.
Its: Managing General Partner
By: Community Support Programs,
Inc.
Its: General Partner
/s/ Xxxxxxxx X. Xxxxxxxx
GENERAL PARTNERS: X. XXXXXX XXXXXXX, JR.
/s/ X. Xxxxxx Xxxxxxx, Jr.
COMMUNITY SUPPORT PROGRAMS,
INC.
/s/ Xxxxxxxx X. Xxxxxxxx
Its: Executive Director
WITHDRAWING ORIGINAL T.F. MANAGEMENT, INC.
LIMITED PARTNER: By: Xxxxxx X. Xxxx
Its: President
/s/ Xxxxxx X. Xxxx
Exhibit A
PECAN MANOR APARTMENTS PARTNERSHIP, A
LOUISIANA PARTNERSHIP IN COMMENDAM
FACT SHEET
A. Sources
i. Permanent First Mortgage $69,000
ii. Permanent Second Mortgage $400,000
iii. LIHTC Equity $1,501,914
General Partner Equity $100
TOTAL $1,971,014
B. Uses
Acquisition Costs
Land $60,000
Construction Costs
Building Costs $1,235,240
Site Work $251,560
General Requirements $89,100
Bond Premium $15,000
Legal/Organizational
Legal $20,000
Title & Recording $20,000
Construction Financing
Interest during Construction $15,000
Soft Costs
Architect/Engineering $23,600
Taxes during Construction $2,000
Construction Insurance $2,000
Tax Credit Fees $18,500
Appraisal $5,000
Cost Certification $4,500
Contingencies $25,000
Other Costs
Developer Fee $160,000
Developer Overhead Reimbursement $24,514
TOTAL $1,971,014
2. Construction Financing
A. Lender Hibernia National Bank
B. Mortgage Amount $850,000
i. Note Date May 12, 1998
ii. Interest Rate 8.95%
iii. Term 12 months
3. Permanent Financing
A. Lender (First Mortgage) Hibernia National Bank
B. Mortgage Amount: $69,000
i. Note Date: May 12, 1998
ii. Interest Rate: 8.80% adjusted on 5th and 10th
anniversary
iii. Term: 15 years
iv. Amortization: 300 months
A. Lender (Second Mortgage) Louisiana Housing Finance
Agency
B. Mortgage Amount $400,000
C. Note Date: July 10, 1998
ii. Interest Rate: 5.88%
iii. Term: 40 years
iv. Amortization 40 years
4. Total Construction Costs: $1,575,900
5. Construction Commencement: July, 1998
6. Construction Completion: January, 1999
7. Eligible Basis: $1,886,500
8. Qualified Basis: $2,452,450
(130% Multiplier)
9. Capital Contributions:
General Partners $100
Investment Limited Partner $1,501,914
10. Type of Credit: New construction
11. Rent-up Schedule: 100% occupancy by
April, 1999
12. Projected Credit to the Investment
Limited Partner (99.99%): $182,524 for 1999
($208,599; new construction) $208,599 for 2000 to
2008
$26,075 for 2009
13. Total Projected Credit to the
Partnership (100%): $182,543 for 1999
($208,620; new construction) $208,620 for 2000 to
2008
$26,078 for 2009
14. Tax Credit Approval:
A. Application
i. Filing Date: March 19, 1997
ii. Credit Amount
Requested: $208,620
B. Reservation
i. Date: October 15, 1997
ii. Credit Amount
Reserved: $208,620
C. Allocation
i. Date: N/A
ii. Credit Amount
Allocated:
15. Apartment Complex
A. Name: Pecan Manor Apartments
Address: Natchitoches, Louisiana
Type of Project: Elderly
16. Area Median Income: $27,100
(4 Person MFI)
17. Type of Apartments: Garden Apartments
Unit
Square Basic Util
# Feet Rent Allow Total
1 BR (50% median) 12 800 217 40 257
2 BR (50% median) 4 950 259 50 309
2 BR (60% median) 18 950 320 50 370
4 BR (60% median) 6 1,250 407 70 477
18. Number of Units Receiving
Rental Assistance: -0-
19. Annual Operating Expenses
(beginning 1999): $92,037
20. Replacement Reserve Account
A. Annual: $8,000
B. Required Total Accumulation: $80,000
21. Operating Reserve Account: -0-
22. Amount of Annual Reporting
Fee to Boston Capital: $4,000
23. Amount of Partnership
Management Fee: $4,000
24. Amount of Total Depreciable Base
Allocated to Personal Property: $29,989
25. Total Capital Contribution of
Investment Limited Partner: $1,501,914
26. Schedule of Capital Contributions
A. $1,126,436 on the latest to occur of:
i Tax Credit Set-Aside;
ii Admission Date;
iii. Construction Loan Closing;
iv. Permanent Mortgage Loan Commitment; or
v. Permanent Second Mortgage closing.
B. $150,191 on the latest to occur of:
i. Completion;
ii. State Designation; or
iii Cost Certification.
C. $225,287 on the latest to occur of:
i. the Initial 100% Occupancy Date;
ii. Permanent Mortgage Commencement;
iii receipt by the Limited Partners of the Partnership's owner's
title policy;
iv opinion of counsel to the Partnership; or
v. Breakeven Point.
27. General Partners: Community Support Programs, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Xxxxxx Xxxxxxx, Xx.
000 Xxxx Xxxxxx
X.X. Xxxxxx 000
Xxxxxxxxx, XX 00000
28. Ownership Interests:
Tax Credits
& Cost Profits &
Reccovery Losses
(depreciation) other Capital Cash
deductions Losses Transactions Flow
A. Managing G.P.: .005% .005% 49% 49%
B. General Partner .005% .005% 1% 1%
C. Investment L.P.: 99.99% 99.99% 49.999% 50%
D. Special L.P. -0- -0- .001% -0-
29. Management Agent: Xxxxxxx Property Management, L.L.C.
Contact Person: Xxxxxx X. Xxxxxxx
Address: 000 Xxxx Xxxxxx, X.X. Xxxxxx 000
Xxxxxxxxx, XX 00000
Telephone Number: 000-000-0000
Fax Number 000-000-0000
Amount of Management Fees: (5% of gross rental receipts)
30. Builder: Xxxxxxx Builders, L.L.C.
Contact Person: Xxxxxx Xxxx
Address: 000 Xxxx Xxxxxx, X.X. Xxxxxx 000
Xxxxxxxxx, XX. 00000
B. Telephone Number: 000-000-0000
C. Fax Number: 000-000-0000
D. Construction Contract $2,721,391
31. Architect: Xxxxxx & Xxxxxx Architects, Ltd.
Contact Person: Xxxxxx Xxxxxx
Address: 000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
B. Telephone Number: 000-000-0000
C. Fax Number: 000-000-0000
D. Amount of Fee: $23,600
32. Auditor and Tax
Return Preparer: Little & Banks
Contact Person: Xxxx Xxxxxx
Address: X.X. Xxx 0000
000X Xxxxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
B. Telephone Number: 000-000-0000
C. Fax Number: 000-000-0000
D. Fee: $4,500
33. Federal Taxpayer I.D. Number: 00-0000000
34. Operating Deficit
Guaranty: X. Xxxxxx Xxxxxxx, Jr.
X. Xxxxxx Xxxxxxx, Jr., individually, and on behalf of
the Partnership, shall be obligated to make Subordinated Loans to
the Partnership to cover debt service, operating expenses and the
Replacement Reserve Fund to the extent these exceed available
operating income.
35. Building Breakdown
A. # of units: 40
# of Buildings: 12
BIN: LA-98-00177-00168
cc: Boston Capital Accounting Department
Exhibit B
Certificate of Partnership, General Partners
and Withdrawing Original Limited Partner
Re: Lack of Disqualifications
The Partnership, its General Partners and its Withdrawing
Original Limited Partner (as identified on the Certification and
Agreement to which this Certificate is attached as Exhibit B)
hereby represent to you that neither (i) the Partnership, (ii)
any predecessor of the Partnership, (iii) any of the
Partnership's affiliates (affiliate meaning a person that
controls or is controlled by, or is under common control with,
the Partnership) , (iv) any sponsor (meaning any person who (1)
is directly or indirectly instrumental in organizing the
Partnership or (2) will directly or indirectly manage or
participate in the management of the Partnership or (3) will
regularly perform, or select the person or entity who will
regularly perform, the primary activities of the Partnership),
(v) any officer, director, principal or general partner of the
Partnership or of any sponsor, (vi) any officer, director,
principal, promoter or general partner of the General Partners or
General Partners, (vii) any beneficial owner of ten per cent or
more of any class of the equity securities of the Partnership or
of any sponsor (beneficial ownership meaning the power to vote or
direct the vote and/or the power to dispose or direct the
disposition of such securities), (viii) any promoter of the
Partnership (meaning any person who, acting alone or in
conjunction with one or more other persons, directly or
indirectly has taken, is taking or will take the initiative in
founding and organizing the business of the operating Partnership
or any person who, in connection with the founding and organizing
of the business or enterprise of the Partnership, directly or
indirectly receives in consideration of services or property, or
both services and property, ten per cent or more of any class of
securities of the Partnership or ten per cent or more of the
proceeds from the sale of any class of such securities; provided,
however, a person who receives such securities or proceeds either
solely as underwriting commissions or solely in consideration of
property shall not be deemed a promoter if such person does not
otherwise take part in founding and organizing the enterprise)
presently connected with the Partnership in any capacity:
(1) Has filed a registration statement which is the subject
of any pending proceeding or examination under the securities
laws of any jurisdiction, or which is the subject of any refusal
order or stop order thereunder entered within five years prior to
the date hereof;
(2) Has been convicted of or pleaded nolo contendere
to a misdemeanor or felony or, within the last ten years,
been held liable in a civil action by final judgment of a court
based upon conduct showing moral turpitude in connection with the
offer, purchase or sale of any security, franchise or commodity
(which term, for the purposes of this Certificate shall
hereinafter include commodity futures contracts) or any other
aspect of the securities or commodities business, or involving
racketeering, the making of a false filing or a violation of
Sections 1341, 1342 or 1343 of Title 18 of the United States Code
or arising out of the conduct of the business of an issuer,
underwriter, broker, dealer, municipal securities dealer, or
investment adviser, or involving theft, conversion,
misappropriation, fraud, breach of fiduciary duty, deceit or
intentional wrongdoing including, but not limited to, forgery,
embezzlement, obtaining money under false pretenses, larceny
fraudulent conversion or misappropriation of property or
conspiracy to defraud, or which is a crime involving moral
turpitude, or within the last five years of a misdemeanor or
felony which is a criminal violation of statutes designed to
protect consumers against unlawful practices involving insurance,
securities, commodities, real estate, franchises, business
opportunities, consumer goods or other goods and services;
(3) Is subject to (a) any administrative order, judgment or
decree entered within five years prior to the date hereof entered
or issued by or procured from a state securities commission or
administrator, the Securities and Exchange Commission (SEC),
the Commodities Futures Trading Commission or the U.S. Postal
Service, or to (b) any administrative order or judgment, arising
out of the conduct of the business of an underwriter, broker,
dealer, municipal securities dealer, or investment adviser, or
involving deceit theft, fraud or fraudulent conduct, or breach of
fiduciary duty, or which is based upon a state banking,
insurance, real estate or securities law or (c) has been the
subject of any administrative order, judgment or decree in any
state in which fraud, deceit, or intentional wrongdoing,
including, but not limited to, making untrue statements of
material fact or omitting to state material facts, was found;
(4) Is subject to any pending proceeding in any
jurisdiction relating to the exemption from registration of any
security or offering, or to any order, judgment or decree in
which registration violations were found or which prohibits,
denies or revokes the use of any exemption from registration in
connection with the offer, purchase or sale of securities, or to
an SEC censure or other order based on a finding of false filing;
(5) Is subject to any order, judgment or decree of any
court or regulatory authority of competent jurisdiction entered
within five years prior to the date hereof, temporarily,
preliminarily or permanently restraining or enjoining such
persons from engaging in or continuing any conduct or practice in
connection with any aspect of the securities or commodities
business or involving the making of any false filing or arising
out of the conduct of the business of an underwriter, broker,
dealer, municipal securities dealer, or investment adviser, or
which restrains or enjoins such person from activities subject to
federal or state statutes designed to protect consumers against
unlawful or deceptive practices involving insurance, banking,
commodities, real estate, franchises, business opportunities,
consumer goods and services, or is subject to a United States
Postal Service false representation order entered within five
years prior to the date hereof, or is subject to a temporary
restraining order or preliminary injunction with respect to
conduct alleged to have violated section 3005 of Xxxxx 00, Xxxxxx
Xxxxxx Code;
(6) Is suspended or expelled from membership in, or
suspended or barred from association with a member of, an
exchange registered as a national securities exchange, an
association registered as a national securities association, or
any self-regulatory organization registered pursuant to the
Securities Exchange Act of 1934, or a Canadian securities
exchange, or association or self-regulatory organization
operating under the authority of the Commodity Futures Trading
Commission, or is subject to any currently effective order or
order entered within the past five years of the SEC, the
Commodity Futures Trading Commission or any state securities
administrator denying registration to, or revoking or suspending
the registration of, such person as a broker-dealer, agent,
futures commission merchant, commodity pool operator, commodity
trading adviser or investment adviser or associated person of any
of the foregoing, or prohibiting the transaction of business as a
broker-dealer or agent;
(7) Has, in any application for registration or in any
report required to be filed with, or in any proceeding before the
SEC or any state securities commission or any regulatory
authority willfully made or caused to be made any statement which
was at the time and in the light of the circumstances under which
it was made false or misleading with respect to any material
fact, or has willfully omitted to state in any such application,
report or proceeding any material fact which is required to be
stated therein or necessary in order to make the statements made,
in the light of the circumstances under which they are made, not
misleading, or has willfully failed to make any required
amendment to or supplement to such an application, report or
statement in a timely manner;
(8) Has willfully violated any provision of the Securities
Act of 1933, the Securities Exchange Act of 1934, the Trust
Indenture Act of 1939, the Investment Advisers Act of 1940, the
Investment Company Act of 1940, the Commodity Exchange Act of
1974 or the securities laws of any state, or any predecessor law,
or of any rule or regulation under any of such statutes;
(9) Has willfully aided, abetted, counseled, commanded,
induced or procured the violation by any other person of any of
the statutes or rules or regulations referred to in subsection
(8) hereof;
(10) Has failed reasonably to supervise his agents, if
he is a broker-dealer, or his employees, if he is an investment
adviser, but no person shall be deemed to have failed in such
supervision if there have been established procedures, and a
system for applying such procedures, which would reasonably be
expected to prevent and detect, insofar as practicable, any
violation of statutes, rules or orders described in subsection
(8) and if such person has reasonably discharged the duties and
obligations incumbent upon him by reason of such procedures and
system without reasonable cause to believe that such procedures
and system were not being complied with;
(11) Is subject to a currently effective state
administrative order or judgment procured by a state securities
administrator within five years prior to the date hereof or is
subject to a currently effective United States Postal Service
fraud order or has engaged in dishonest or unethical practices in
the securities business or has taken unfair advantage of a
customer or is the subject of sanctions imposed by any state or
federal securities agency or self-regulatory agency;
(12) Is insolvent, either in the sense that his liabilities
exceed his assets or in the sense that he cannot meet his
obligations as they mature, or is in such financial condition
that he cannot continue his business with safety to his
customers, or has not sufficient financial responsibility to
carry out the obligations incident to his operations or has been
adjudged a bankrupt or made a general assignment for the benefit
of creditors; or
(13) If the Partnership is subject to the requirements of
Section 12, 14 or 15 (d) of the Securities Exchange Act of 1934,
then the Operating Partnership has filed all reports required by
those Sections to be filed during the 12 calendar months
preceding the date hereof (or for such shorter period that the
Partnership was required to file such reports).
