MAGNOLIA PLACE APARTMENTS PARTNERSHIP,
A Mississippi Limited Partnership
CERTIFICATION AND AGREEMENT
CERTIFICATION AND AGREEMENT made as of November 14, 1997, by
Magnolia Place Apartments Partnership, A Mississippi Limited
Partnership (the "Operating Partnership"); X. Xxxxxx Xxxxxxx, Jr.
and T.F. Management, Inc., its general partners (the "General
Partners"); and X. Xxxxxx Xxxxxxx, Jr., 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 27 thereof) (the "Investment Partnership");
BCTC 94, Inc., a Delaware corporation, and 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
Second Amended and Restated Agreement of Limited Partnership of
the Operating Partnership, dated as of November 14, 1997 (the
"Operating Partnership Agreement"), and in accordance with which
the Investment Partnership will make substantial capital
contributions to the Operating Partnership;
WHEREAS, the Investment Partnership and Boston Capital 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, the
General Partners and the Withdrawing Original Limited Partner
hereby agree as follows for the benefit of the Investment
Partnership, Boston Capital, Peabody & Xxxxx, and certain other
persons hereinafter described.
1. Representations, Warranties and Covenants of the
Operating Partnership and the General Partners
The Operating Partnership and the General Partners jointly
and severally, and in solido, represent, warrant and certify to
the Investment Partnership, Boston Capital, and Peabody & Xxxxx
that, with respect to the Operating Partnership, as of the date
hereof:
1.01 The Operating Partnership is duly organized as a
limited partnership pursuant to the laws of the State of
Mississippi with full power and authority to own the apartment
complex (the "Apartment Complex") and conduct its business; the
Operating 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 Operating
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 Operating
Partnership or General Partners or Withdrawing Original Limited
Partner are bound or any law, regulation, judgment, decree or
order applicable to the Operating 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 Operating
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
Partnership, Boston Capital 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, 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 Operating 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 Operating Partnership Agreement is true and correct as of the
date hereof.
1.05 Each of the covenants and agreements of the Operating
Partnership and the 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.
1.06 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.
1.07 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.
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 Operating
Partnership holds any equity interest in the Apartment Complex.
1.10 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.
1.11 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.
1.12 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.
1.13 The General Partners are not related in any manner to
the Investment Partnership, nor are the General Partners acting
as an agent of the Investment Partnership.
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 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 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 1996 low-income housing tax credit authorization in
the amount of at least $130,340 per annum for the Property has
been obtained by the Partnership from the tax credit agency of
the State of Mississippi 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
8.60% 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 Operating Partnership, as of December 31, 1996,
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, 1998, and all buildings in
the Apartment Complex will be placed in service for the purposes
of the Code not later than December 31, 1998.
1.24 The allocation of 1996 low income housing tax credit to
the Property was not made pursuant to the "nonprofit set aside"
provisions of Section 42 of the Code.
2. Indemnification
2.01 The General Partners (for purposes of this Section
2.01, (the "Indemnifying Party") agrees to indemnify and hold
harmless the Investment Partnership 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 Operating Partnership, the General
Partners, the Withdrawing Original Limited Partner, Boston
Capital, 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.
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 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: MAGNOLIA PLACE APARTMENTS
PARTNERSHIP, A MISSISSIPPI
LIMITED PARTNERSHIP
By: T.F. Management, Inc.
Its: General Partner
By: X. Xxxxxx Xxxxxxx, Jr.
Its: President
/s/X. Xxxxxx Xxxxxxx, Jr.
By: X. Xxxxxx Xxxxxxx, Jr.
Its: General Partner
/s/X. Xxxxxx Xxxxxxx
GENERAL PARTNERS: T.F. MANAGEMENT, INC.
By: X. Xxxxxx Xxxxxxx, Jr.
Its: President
/s/X. Xxxxxx Xxxxxxx
X. XXXXXX XXXXXXX, JR.
/s/X. Xxxxxx Xxxxxxx
WITHDRAWING ORIGINAL X. XXXXXX XXXXXXX, JR.
LIMITED PARTNER
/s/X. Xxxxxx Xxxxxxx
Exhibit A
MAGNOLIA PLACE APARTMENTS PARTNERSHIP,
A Mississippi Limited Partnership
FACT SHEET
1. Sources and Uses
A. Sources
i. Permanent First Mortgage $400,000
ii. Permanent Second Mortgage $500,000
iii. LIHTC Equity $800,027
iv. General Partner Equity $100
TOTAL $1,700,027
B. Uses
i. Total Construction Costs $1,173,000
ii. Acquisition Costs
a. Land $150,000
b. Building $0
iii. Architect, Accounting, Legal &
Engineering $75,500
iv. Development Fee $194,000
v. Construction Interest $32,000
vi. Bond $13,000
vii. Taxes and Insurance $16,277
viii. Tax Credit Fees $12,500
ix. Permanent Loan Fee $9,750
x. Leasing/Operating Reserve $24,000
TOTAL $1,700,027
2. Construction Financing
A. Lender Hibernia National Bank
B. Mortgage Amount $975,000
i. Note Date August 29, 1997
ii. Interest Rate 8.80%
iii. Term 12 months
iv. Fee $9,750
3. Permanent Financing
A. Lender (First Mortgage) Hibernia National Bank
B. Mortgage Amount: $400,000
i Note Date: August 29, 1997
ii. Interest Rate: 8.80% adjusted on 5th and
10th anniversary
iii. Term: 15 years
iv. Amortization: 300 months
A. Lender (Second Mortgage) Xxxxxxx County
B. Mortgage Amoun $500,000
C. Note Date: N/A (upon completion)
ii. Interest Rate: 1%
iii. Term 40 years
4. Total Construction Costs: $1,173,000
5. Construction Commencement: August, 1997
6. Construction Completion: March, 1998
7. Eligible Basis: $1,516,277
8. Qualified Basis: $1,516,277
9. Capital Contributions:
General Partners $100
Investment Limited Partner $800,027
10. Type of Credit: New construction
11. Rent-up Schedule: 100% occupancy by May,
1998
12. Projected Credit to the
Investment Partnership (99%): $91,401 for 1998
($129,037 new construction) $129,037 for 1999-2007
$37,636 for 2008
13. Total Projected Credit to the
Operating Partnership (100%): $92,324 for 1998
($130,340 new construction) $130,340 for 1999-2007
$38,016 for 2008
14. Tax Credit Approval:
A. Application
i. Filing Date:
ii. Credit Amount Requested: $139,256
B. Reservation
i. Date: November 11, 1996
ii. Credit Amount Reserved $139,256
C. Allocation
i. Date: December 26, 1996
ii. Credit Amount Allocated $130,034
15. Apartment Complex
A. Name Magnolia Place Apartments
B. Address Gautier, Mississippi
C. Type of Project Family
Type of Project Family
16. Area Median Income: $34,600
17. Type of Apartments: Xxxxxx Xxxxxxxxxx
# Xxxx Xx. Ft. Basic Rent Util. Allow. Total Rent
1 BR (50% median) 20 800 261 63 324
2 BR (60% median) 10 950 396 71 467
3 BR (60% median) 10 1,100 454 86 540
18. Number of Units Receiving
Rental Assistance: -0-
19. Annual Operating Expenses
(beginning 1998): $74,411
20. Replacement Reserve Account
A Annual: $8,000
B. Required Total Accumulation: $80,000
21. Operating Reserve Account: $12,000
22. Amount of Annual Reporting
Fee to Boston Capital: $4,000
23. Amount of Annual Partnership
Management Fee: $4,000
24. Amount of Total Depreciable Base
Allocated to Personal Property: $30,121
25. Total Capital Contribution of
Investment Partnership: $800,027
26. Schedule of Capital Contributions
A. $600,020 on the latest to occur of:
i. Tax Credit Set-Aside;
ii. Admission Date;
iii. Construction Loan Closing; and
iv. Permanent Mortgage Loan Commitment.
B. $80,003 on the latest to occur of:
i. Completion;
ii. State Designation; or
iii. Cost Certification;
C. $120,004 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: T.F. Management, Inc.
000 Xxxx Xxxxxx
X.X. Xxxxxx 000
Xxxxxxxxx, XX 00000
X. Xxxxxx Xxxxxxx, Jr.
000 Xxxx Xxxxxx
X.X. Xxxxxx 000
Xxxxxxxxx, XX 00000
28. Ownership Interests
Normal Operations CapitalTransactions
A. General Partners: 1.0% 1.0%
B. Investment L.P.: 98.99 98.99%
C. Special L.P. .01% .01%
29. Management Agent: Xxxxxxx Property Management, Inc.
Contact Person: Xxxxx X. Xxxxxx, Xx.
A. Address: 000 Xxxx Xxxxxx, X.X.
Xxxxxx 000
Xxxxxxxxx, XX 00000
B. Telephone Number: 318-872-0286
C. Amount of Management Fees: (5% of gross rental
receipts)
30. Builder: Xxxxxxx Builders, Inc.
Contact Person: Xxxxx X. Xxxxxx, Xx.
A. Address: 000 Xxxx Xxxxxx, X.X. Xxxxxx 000
Xxxxxxxxx, XX. 00000
B. Telephone Number: 000-000-0000
C. Construction Contract $1,256,600
31. Architect: Xxxx X. Xxxxxxx Architect, Ltd.
Contact Person: Xxxxx Xxxxxxxx
A. Address: 0000 Xxxxxx Xxx., Xxxxx X
Xxxxxx, XX 00000
B Telephone Number: 000-000-0000
C Amount of Fee: $34,500
32. Auditor and Tax Return Preparer: Xxxx Xxxxxx & Company
Contact Person: Xxxx Xxxxxx
A. Address: X.X. Xxx 0000
Xxxxxx, XX 00000
B Telephone Number: 000-000-0000
C. 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
Operating Partnership, shall be obligated to make
Subordinated Loans to the Partnership to cover debt service,
operating expenses and the Replacement Reserve Fund to the
extent these exceed available operating income.
35. Building Breakdown
A. # of units: 40
B. # of Buildings: 13
BIN: MS-96-119-01 through 13
cc: Boston Capital Accounting Department
Exhibit B
Certificate of Operating Partnership, General Partners
and Withdrawing Original Limited Partner
Re: Lack of Disqualifications
The Operating 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
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 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
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 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, in 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 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).
