BOSTON CAPITAL TAX CREDIT FUND IV, L.P.
MERIDIAN WEST POINT HOUSING, L.P.
CERTIFICATION AND AGREEMENT
CERTIFICATION AND AGREEMENT made as of DecemberSeptember 1,
19986, by MERIDIAN HOUSING, L.P., a Mississippi limited
partnership (the "Operating Partnership"); The New Life Ministry,
Inc. (the "Administrative General Partner") and Intervest
Partners Corporation (the "Managing General Partner")
(collectively referred to as the "Operating General Partners")
and Intervest Corporation (the "Original Limited Partner") for
the benefit of BOSTON CAPITAL TAX CREDIT FUND IV, L.P., a
Delaware limited partnership (the "Investment Partnership"),
BOSTON CAPITAL ASSOCIATES IV, L.P., a Delaware limited
partnership ("Boston Capital"), XXXXXXX, XXXXX & XXXXX, LLP. 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 a
Amended and Restated Certificate & Agreement of Limited
Partnership of the Operating Partnership dated as of December 1,
1998 the "Operating Partnership Agreement"), in accordance with
which the Investment Partnership will make substantial capital
contributions to the Operating Partnership;
WHEREAS, the Investment Partnership and 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, Xxxxxxx, Xxxxx & Xxxxx, LLP 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
Operating General Partner and the Original Limited Partner hereby
agree as follows for the benefit of the Investment Partnership,
Boston Capital, Xxxxxxx, Xxxxx & Xxxxx, LLP and certain other
persons hereinafter described.
1. Representations, Warranties and Covenants of the
Operating Partnership and the Operating General
Partners
The Operating Partnership and the Operating General Partner
jointly and severally represent, warrant and certify to the
Investment Partnership, Boston Capital, and Xxxxxxx, Xxxxx &
Xxxxx, LLP. that, with respect to the Operating Partnership, as
of the date hereof:
1.01 The Operating Partnership is duly organized
and in good standing as a limited partnership pursuant to the
laws of the state of its formation with full power and authority
to own its apartment complex (the "Apartment Complex") and
conduct its business; the Operating Partnership, the Operating
General Partner and the 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 Operating General
Partner and the 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 the Operating General Partner
or Original Limited Partner are bound or any law, regulation,
judgment, decree or order applicable to the Operating Partnership
or the Operating General Partner or the Original Limited Partner
or any of their respective properties; this Certification and
Agreement constitutes the valid and binding agreement of the
Operating Partnership, the Operating General Partner and the
Original Limited Partner, enforceable against each of them in
accordance with its terms.
1.02 The Operating General Partner has 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. Since the date of the financial statements for the
Operating General Partner, if any, previously delivered, there
has been no material adverse change in the financial position of
the Operating General Partner. The estimates of occupancy rates,
operating expenses, depreciation and tax credits set forth on
Exhibit A are reasonable in light of the knowledge and experience
of the Operating General Partner.
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 Operating General Partner and the 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 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
any of them in any capacity.
1.04 Each of the representations and warranties
contained in the Operating Partnership Agreement is true and
correct in all material respects as of the date hereof.
1.05 Each of the material covenants and agreements
of the Operating Partnership and the Operating General Partner
contained in the Operating Partnership Agreement has been duly
performed to the extent that performance of any 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 material 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 Operating General Partner agrees to take
all actions necessary to claim the Projected Credit, including,
without limitation, the filing of Form(s) 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 No Operating General Partner is related in
any manner to the Investment Partnership, nor is any Operating
General Partner acting as an agent of the Investment Partnership.
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 Operating General
Partner or 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.
2. Indemnification
2.01 The Operating General Partner (for purposes
of this Section 2.01, the "Indemnifying Parties" or,
individually, an "Indemnifying Party") agree 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, leadbased 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 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 the other
Indemnifying Party or parties similarly notified, to assume the
defense thereof, with counsel who shall be satisfactory to such
Indemnified Party or any such of its officers, directors,
employees or controlling persons and any other Indemnified
Parties who are defendants in such action; and after notice from
the Indemnifying Party to such Indemnified Party or any such of
its officers, directors, employees or controlling persons of its
election so to assume the defense thereof and the retaining of
such counsel by the Indemnifying Party, the Indemnifying Party
shall not be liable to such Indemnified Party or any such of its
officers, directors, employees or controlling persons for any
legal or other expenses subsequently incurred by such Indemnified
Party or any such of its officers, directors, employees or
controlling persons in connection with the defense thereof, other
than the reasonable costs of investigation.
3. Miscellaneous
3.01 This Certification and Agreement is made
solely for the benefit of the Operating Partnership, the
Operating General Partner, the Original Limited Partner, Boston
Capital, Xxxxxxx, Xxxxx & Xxxxx, LLP, 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:
MERIDIAN HOUSING, L.P.
By: The New Life Ministry, Inc.,
Its general partner
By: /s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, its duly
authorized President
By: Intervest Partners Corporation,
Its general partner
By: /s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, its duly
authorized Vice-President
OPERATING GENERAL PARTNER:
The New Life Ministry, Inc.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, its duly
authorized President
Intervest Partners Corporation
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, its duly
authorized Vice-President
ORIGINAL LIMITED PARTNER:
Intervest Corporation,
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, its duly
authorized Vice-President
Exhibit A
MERIDIAN HOUSING, L.P.
FACT SHEET
1. Sources and Uses of Funds
A. Sources
Assumed Financing $1,180,629
G.P. Capital $ 100
I.L.P. Capital $ 444,136
TOTAL SOURCES $1,624,865
B. Uses
Building Acquisition Cost $1,058,797
Construction Cost $ 307,315
Land $ 72,000
Soft Costs $ 76,953
Asset Mgmt. Reserve Escrow $ 18,000
Social Services Escrow $ 15,000
Operating Reserve Escrow $ 40,000
Development Fee $ 36,800
TOTAL USES $1,624,865
1. Permanent Financing (Assumed)
A. Lender RECD
B. Mortgage Amount: $1,180,629
C. Loan Agreement: December 9, 1998
D. Assumption Date: December 9, 1998
E. Interest Rate: ________%
F. Term: 36 years
G. Amortization: __ years
2. Eligible Basis: $397,068 (Rehab.)
$1,058,797 (Acquisition)
3. Qualified Basis: $397,068 (Rehab.)
$1,058,797 (Acquisition)
4. Operating General Partner
Capital Contribution: $100
5. Working Capital Loan
Amount: $0
6. Type of Credit: 3.57% (Rehab.)
8.32% (Acquisition)
7. Rent-up Schedule:
25% occupancy as of September 1, 1999
50% occupancy as of October 1, 1999
75% occupancy as of November 1, 1999
100% occupancy as of December 1, 1999
8. Projected Credit to the
Investment Partnership (99.99%) $672,933
A. $14,019 for 1999;
B. $67,293 per annum
for each of the
years 2000 through
2008; and
D. $53,274 for 2009.
9. Total Projected Credit to the
Operating Partnership (100%) $673,000
A. $14,021 for 1999;
B. $67,300 per annum
for each of the years 2000
through 2008; and
D. $53,279 for 2009.
10. Tax Credit Approval:
A. Application:
1. Date: April 15, 1998
2. Amount $68,254
B. Reservation
1. Date: October 1, 1998
2. Amount: $68,254
11. Apartment Complex:
A. Name: Lauderdale County Properties
B. Address: 000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
C. County: Lauderdale
D. Type of Project: Family
12. Area Median Income (1997): $33,700
13. Type of Apartments:
Unit Basic Utility Market
Number Sq. Ft. Rent Allowance Rent
1-Bedroom 12 ___ $240 $75 $354
2-Bedroom 36* ___ $288 $91 $402
* one unit is designted as the Manager's unit and, thus, unrentable.
14. Annual Operating Expenses
(beginning 2001): $95,620
15. Replacement Reserve Account
A. Annual: $12,350
B. Total: $123,500
16. Operating Reserves Escrow $40,000
Social Services Escrow $15,000
Asset Management Fee Escrow $18,000
17. Amount of Annual Asset Management
to Boston Capital: $1,500 from Escrow Account
18. Amount of Annual Partnership $1,400
Management Fee
19. Amount of Total Depreciable
Base Allocated to Personal
Property: $28,427 (2%)
20. Completion Date: _________, 19__
21. Total Capital Contribution of
Investment Partnership: $444,136
22. Schedule of Capital Contributions
A. $288,705 on the latest to occur of (i) Tax Credit Set
Aside, (ii) closing of the Construction Mortgage Loan, (iii)
receipt of commitment acceptable to Boston Capital for the
Permanent Mortgage Loan, or (iv) Admission Date.
B. $75,216 on the latest of (i) State Designation, (ii)
Completion, (iii) Cost Certification, (iv) receipt of an updated
title insurance policy and survey satisfactory to Investment
Limited Partner or (v) receipt of updated insurance certificates
satisfactory to the Investment Limited Partner;
C. $75,215 on the latest of (i) the Initial 100% Occupancy Date,
(ii) Permanent Mortgage Commencement or (iii) Breakeven;
D. $5,000 on receipt of a tax return and audited financial
statement for the year in which Breakeven occurred.
23. Fees and Other Items to be paid from Capital Contributions
Construction and Development Fee: $36,800
Direct Development Costs: $389,336
Asset Management Fee Escrow: $18,000
24A. Managing General Partner: Intervest Partners
Corporation
Address: 0000 X-00 X. Xxxxxxxx
X.X. Xxx 00000
Xxxxxxx, XX 00000
Telephone Number: (000) 000-0000
Contact Person: Xxxxxx X. Xxxxxx
24B. Administrative General Partner: The New Life Ministry, Inc.
Address: 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX
Telephone Number:
Contact Person: Xxxxx X. Xxxxxx
Cash Cash
Flow Flow
25. Ownership Interests Normal Capital 1st 5 There-
Operations Transactions Years after
Managing G.P.: 0.007% 30% 90% 50%
Administrative G.P.: 0.003% 30% 5% 20%
Special Limited Partner: 0% .001% 0% 0%
Investment Partnership: 99.99% 39.999% 5% 30%
26. Management Agent: Intervest Corporation
Contact Person: Xxxxxx X. Xxxxxx
Address: 0000 X-00 X. Xxxxxxxx
X.X. Xxx 00000
Xxxxxxx, XX 00000
Telephone Number: (000) 000-0000
Amount of Fees: $62.54/month per occupied unit.
Max. xxx. compensation of
$36,023.04.
27. Builder: Intervest Construction
Address: 0000 X-00 X. Xxxxxxxx
X.X. Xxx 00000
Xxxxxxx, XX 00000
Telephone Number: (000) 000-0000
Amount of Compensation: $307,315
Builder's Profit: $22,764
28. Architect: Xxxxxx X. Xxx
Address: 000 Xxxx Xxxxxxx
X.X.Xxx 000
Xxxxxxx, XX 00000
Phone:
Amount of Fee: $18,439
29. Auditor and Tax Return Preparer: Xxxxxxxx, Xxxxxxx,
Xxxxxxxxx & Co.
0000 X-00 Xxxxx
Xxxxx 000, XXX Xxxx.
Xxxxxxx, XX 00000
Contact: Xxxx Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
30. Federal Taxpayer ID Number: ______________
31. Building Breakdown:
A. # of Xxxxx 00
X. # xx Xxxxxxxxx 00
X. BIN
cc:Boston Capital Communications Limited Partnership Accounting
Department
Exhibit B
Certificate of Operating Partnership,
Operating General Partner and Original Limited
Partner Re: Lack of Disqualifications
The Operating Partnership, its Operating General Partner and
its 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 Operating General
Partner, (vii) any beneficial owner of ten per cent or more of
any class of the equity securities of the Operating Partnership
or of any sponsor (beneficial ownership meaning the power to vote
or direct the vote and/or the power to dispose or direct the
disposition of such securities), (viii) any promoter of the
Operating Partnership (meaning any person who, acting alone or in
conjunction with one or more other persons, directly or
indirectly has taken, is taking or will take the initiative in
founding and organizing the business of the Operating Partnership
or any person who, in connection with the founding and organizing
of the business or enterprise of the Operating Partnership,
directly or indirectly receives in consideration of services or
property, or both services and property, ten per cent or more of
any class of securities of the Operating Partnership or ten per
cent or more of the proceeds from the sale of any class of such
securities; provided, however, a person who receives such
securities or proceeds either solely as underwriting commissions
or solely in consideration of property shall not be deemed a
promoter if such person does not otherwise take part in founding
and organizing the enterprise) presently connected with the
Operating Partnership in any capacity:
(1) Has filed a registration statement which is the subject
of any pending proceeding or examination under the securities
laws of any jurisdiction, or which is the subject of 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) Is selling or has sold, or is offering or has offered
for sale, in any state securities through any unregistered agent
required to be registered under the Pennsylvania Securities Act
of 1972, as amended (the "Pennsylvania Act") or for any broker-
dealer or issuer with knowledge that such broker-dealer or issuer
had not or has not complied with the Pennsylvania Act.
If the 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).
