BOSTON CAPITAL TAX CREDIT FUND IV L.P.
___________________________________
CERTIFICATION AND AGREEMENT
___________________________________
CERTIFICATION AND AGREEMENT made as of April 28, 1998, by
and among FORT BEND NHC, L.P., a Virginia limited partnership
(the "Operating Partnership"); FORT BEND NHC, L.L.C., a
Virginia limited liability company, and HELFANT REALTY, INC.,
a Virginia corporation (collectively, the "Operating General
Partners"); and STEVEN B. SANDLER ("S. Sandler"),
ARTHUR B. SANDLER ("A. Sandler") and ROBERT H. JOSEPHBERG
("Josephberg"), each an individual resident of the
Commonwealth of Virginia (S. Sandler, A. Sandler and
Josephberg are collectively referred to herein as the
"Guarantors"); for the benefit of BOSTON CAPITAL TAX CREDIT
FUND IV L.P., a Delaware limited partnership ("BCTC IV"),
BOSTON CAPITAL ASSOCIATES IV L.P., a Delaware limited
partnership ("BCA"), PEABODY & BROWN and certain other persons
or entities described herein.
WHEREAS, the Operating Partnership proposes to admit BCTC
IV as a limited partner thereof pursuant to an Amended and
Restated Agreement of Limited Partnership of the Operating
Partnership dated as of April 1, 1998 (the "Operating
Partnership Agreement"), in accordance with which BCTC IV will
make substantial capital contributions to the Operating
Partnership; and
WHEREAS, BCTC IV and BCA have relied upon certain
information and representations described herein in evaluating
the merits of investment by BCTC IV in the Operating
Partnership; and
WHEREAS, Peabody & Brown, as counsel for BCTC IV, will
rely upon such information and representations in connection
with its delivery of certain opinions with respect to this
transaction.
NOW, THEREFORE, for $1.00 and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the Operating Partnership, the Operating General
Partners and the Guarantors (as and to the extent applicable),
hereby agree as follows for the benefit of BCTC IV, BCA,
Peabody & Brown and certain other persons hereinafter
described.
1. Representations, Warranties and Covenants of the
Operating Partnership,
the Operating General Partners and the Guarantors.
The Operating Partnership and the Operating General
Partners, jointly and severally, and the Guarantors (as and to
the extent set forth below), represent, warrant and certify to
BCTC IV, BCA and Peabody & Brown that, with respect to the
Operating Partnership, as of the date hereof:
1.1. 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 including any required
authority of the State of Texas to do business therein; the
Operating Partnership, the Operating General Partners and the
Guarantors 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 Partners and the Guarantors
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 material 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, the Operating General Partners or any
Guarantor are bound, or any law, regulation, judgment, decree
or order applicable to the Operating Partnership, the
Operating General Partners or any Guarantor, or any of their
respective properties; this Certification and Agreement
constitutes the valid and binding agreement of the Operating
Partnership, the Operating General Partners and the
Guarantors, enforceable against each of them in accordance
with its terms.
1.2. The Operating General Partners have delivered
to BCTC IV, BCA or their affiliates, all documents and
information in their possession which they reasonably believe
are material to a decision by BCTC IV to invest in the
Operating Partnership. All factual information, including
without limitation the information set forth in Exhibit A
hereto, provided by the Operating General Partners to BCTC IV
and/or BCA and/or their affiliates, either in writing or
orally, to the best of their knowledge did not contain at the
time given and does not contain on the date hereof, 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 estimates of
occupancy rates, operating expenses, cash flow and tax credits
set forth on Exhibit A are reasonable in light of the
knowledge and experience of the Operating General Partners.
1.3. Neither the Operating Partnership, the
Operating General Partners, any Guarantor, nor any affiliate
or anyone acting on behalf of any of the foregoing has, either
directly or indirectly or through any agent, sold, offered for
sale, solicited offers to buy, or otherwise approached
offerees for or negotiated in respect of, any interest in the
Operating Partnership or the Apartment Complex; neither the
Operating Partnership, the Operating General Partners, any
Guarantor, nor any affiliate thereof, are presently under
commitment to any real estate, securities or other broker,
rental agent, finder or other intermediary with respect to the
interests being acquired by BCTC IV in the Operating
Partnership and in the Apartment Complex or any portion
thereof, except for their arrangements with BCTC IV and BCA
and the Operating General Partners and the Guarantors, jointly
and severally, shall indemnify and hold harmless BCTC IV, BCA
and their respective affiliates, agents and assignees from any
and all claims of any real estate, securities or other broker,
rental agent, finder or other intermediary with respect to the
acquisition by BCTC IV of its interest in the Operating
Partnership and in the Apartment Complex, and, at the request
of BCTC IV, the Operating General Partners and the Guarantors,
jointly and severally, shall assume the defense of any
judicial action(s) that might arise in connection with any
such claim(s).
1.4. Neither the Operating Partnership, the
Operating General Partners, any Guarantor, nor any affiliate
or, with the knowledge of the Operating General Partners or
the Guarantors or any of them, anyone acting on behalf of any
of the foregoing has, either directly or indirectly or through
any agent, sold, offered for sale, solicited offers to buy, or
otherwise approached offerees for or negotiated in respect of,
or will, either directly or indirectly or through any agent,
sell, offer for sale, solicit offers to buy, or otherwise
approach offerees for or negotiate in respect of, the purchase
of interests in real estate projects or entities which are or
will be integrated with the Apartment Complex or the Operating
Partnership and treated as a single offering under the
Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, and any applicable state securities
or Blue Sky Laws (collectively "Applicable Securities Laws").
1.5. As of the date hereof, the Operating
Partnership and the Operating General Partners make each of
the representations contained in Exhibit B attached hereto
which are required to be made under the state securities or
Blue Sky laws of the jurisdictions in which beneficial
assignee certificates in BCTC IV (the "BAC's") were offered
and sold, both as to themselves and as to any of their
affiliates, any of their predecessors and their affiliates'
predecessors, any of their general partners and/or beneficial
owners of ten per cent (10%) or more of any class of their
equity securities (beneficial ownership meaning the power to
vote or direct the vote and/or the power to dispose or direct
the disposition of such securities), as the case may be, and
any promoters presently connected with them in any capacity.
1.6. Each of the representations and warranties of
the Operating General Partners contained in the Operating
Partnership Agreement is true and correct as of the date
hereof.
1.7. Each of the covenants and agreements of the
Operating Partnership and the Operating General Partners
contained in the Operating Partnership Agreement has been duly
performed to the extent that performance of any such covenant
and agreement is required on or prior to the date hereof.
1.8. All conditions to admission of BCTC IV as the
investment limited partner of the Operating Partnership
contained in the Operating Partnership Agreement have been
satisfied.
1.9. No default has occurred and is continuing
under the Operating Partnership Agreement or the Project
Documents.
1.10. The Operating General Partners agree to take
all actions necessary to claim the Projected Credit,
including, without limitation, the filing of Form 8609 with
the Internal Revenue Service.
1.11. From and after the Admission Date, no person
or entity other than the Operating Partnership holds any
equity interest in the Apartment Complex.
1.12. From and after the Admission Date, 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.
1.13. From and after the Admission Date, 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.
1.14. From and after the Admission Date, 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.
1.15. Neither the Operating General Partners nor any
Guarantor is related in any manner to BCTC IV, nor are the
Operating General Partners or any Guarantor acting as an agent
of BCTC IV.
1.16. The Guarantors have a collective net worth of
not less than Five Million Dollars ($5,000,000). Since the
date of the financial statements of the Guarantors previously
delivered to BCTC IV, there has been no material adverse
change in the financial position of any of the Guarantors.
2. Indemnification and Contribution With Respect to
Securities Matters
2.1. The Operating General Partners (for purposes
of this Section 2.1, the "Indemnifying Party"), agree to
indemnify and hold harmless BCTC IV and BCA (for purposes of
this Section 2.1, the "Indemnified Parties" or, individually,
an "Indemnified Party") and each officer, director, employee
and person, if any, who controls any Indemnified Party within
the meaning of the Applicable Securities Laws 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, under the Applicable Securities
Laws or otherwise, insofar as such Liabilities or actions in
respect thereof arise out of or are based upon a breach by
such Indemnifying Party of any of its representations,
warranties or covenants to such Indemnified Party or any such
of its officers, directors, employees or controlling persons
under this Certification and Agreement; 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.
2.2. The Indemnifying Party shall not be liable
under the indemnity agreement contained in Section 2.1 unless
the Indemnified Party shall have notified such Indemnifying
Party in writing within ten (10) 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 2.1.
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 reasonably satisfactory to any other
Indemnifying Party or parties similarly notified, to assume
the defense thereof, with counsel who shall be reasonably
satisfactory to such Indemnified Party or any such of its
officers, directors, employees or controlling persons and any
other Indemnified Parties who are defendants in such action;
and after notice from the Indemnifying Party to such
Indemnified Party or any such of its officers, directors,
employees or controlling persons of its election so to assume
the defense thereof and the retaining of such counsel by the
Indemnifying Party, the Indemnifying Party shall not be liable
to such Indemnified Party or any such of its officers,
directors, employees or controlling persons for any legal or
other expenses subsequently incurred by such Indemnified Party
or any such of its officers, directors, employees or
controlling persons in connection with the defense thereof,
other than the reasonable costs of investigation.
2.3. If the right to indemnification provided for
in Section 2.1 of this Certification and Agreement would by
its terms be available to a party or parties hereunder, but is
determined by a court of competent jurisdiction to be
unenforceable under Applicable Securities Laws, then, in that
event, the Indemnifying Party shall contribute to the
aggregate of such losses, claims, damages and liabilities as
are contemplated in such Section 2.1 (including, but not
limited to, any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement
of, any claim, action, suit or proceeding) to the extent of
ninety per cent (90%) of the aggregate of such losses, claims,
damages and liabilities incurred by a party(ies) who otherwise
would be an Indemnified Party(ies) under and pursuant to the
provisions of such Section 2.1; provided, however, that no
person guilty of fraudulent misrepresentations within the
meaning of Section 11(f) of the Securities Act of 1933, as
amended, shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or
proceeding against him or it in respect of which a claim for
contribution may be made against another party or parties,
notify such other party or parties. Failure so to notify such
other party or parties shall not relieve such other party or
parties from any other obligation it or they may have
hereunder or otherwise. If such other party or parties are so
notified, such other party or parties shall be entitled to
participate in the defense of such action, suit, proceeding or
claim at their own expense or in accordance with arrangements
satisfactory to all parties who may be required to contribute.
After notice from such other party or parties to the party
entitled to contribution of its or their own defense, the
party or parties so electing shall not be liable for any legal
or other expenses of litigation subsequently incurred by the
party entitled to contribution in connection with the defense
thereof, other than the reasonable costs of investigation. No
party shall be required to contribute with respect to any
action or claim settled without its consent.
3. Miscellaneous
3.1. This Certification and Agreement is made
solely for the benefit of Peabody & Brown, BCA and BCTC IV,
and their respective successors and assigns, and no other
person shall acquire or have any right under or by virtue of
this Agreement, and the term "successors and assigns" as used
herein shall not include any purchaser, as such, of any of the
BACs.
3.2. This Certification and Agreement may be
executed in several counterparts, each of which shall be
deemed to be an original, and all of which together shall
constitute one and the same Certification and Agreement.
3.3. Terms defined in the Operating Partnership
Agreement and used but not otherwise defined here shall have
the meanings given to them in the Operating Partnership
Agreement.
IN WITNESS WHEREOF, the parties hereto have set their
hands and seals as of the date first above written.
OPERATING GENERAL PARTNERS:
HELFANT REALTY, INC.
Managing General Partner
By: /s/ Dorcas Helfant
Dorcas Helfant
President
FORT BEND NATIONAL HOUSING, L.L.C.
By: /s/Bradley P. Dolbec
Bradley P. Dolbec
Manager
GUARANTORS (with respect to the
provisions of
Sections 1.1, 1.3, 1.4, 1.15 and 1.16
only):
______________________________________
STEVEN B. SANDLER
______________________________________
ARTHUR B. SANDLER
_____________________________________
ROBERT H. JOSEPHBERG
EXHIBIT B
Certificate of Issuer and General Partner(s)
Re: Lack of Disqualifications
The Issuer (for the purposes of this Exhibit B the
term "Issuer" shall be taken to refer to the "Operating
Partnership" as identified in the Certification and Agreement
to which this document is attached as Exhibit B) and its
general partner (the "General Partner") hereby represent to
you that neither (i) the Issuer, (ii) any predecessor Issuer,
(iii) any of the Issuer's affiliates ("affiliate" meaning a
person that controls or is controlled by, or is under common
control with, the Issuer), (iv) any sponsor (meaning any
person who (1) is directly or indirectly instrumental in
organizing the investment program or (2) will directly or
indirectly manage or participate in the management of the
investment program or (3) will regularly perform, or select
the person or entity who will regularly perform, the primary
activities of the investment program, (v) any officer,
director, principal or general partner of the Issuer or of any
sponsor, (vi) any officer, director, principal, promoter or
general partner of the General Partners, (vii) any beneficial
owner of ten per cent or more of any class of the equity
securities of the Issuer 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, or (viii) any promoter of the Issuer (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 Issuer or any person who, in connection with
the founding and organizing of the business or enterprise of
the Issuer, 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 Issuer or
ten per cent or more of the proceeds from the sale of any
class of such securities; however, a person who receives such
securities or proceeds either solely as underwriting
commissions or solely in consideration of property shall not
be deemed to be a promoter if such person does not otherwise
take part in founding and organizing the enterprise) presently
connected with the Issuer 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 of this Certificate;
(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
commencement of the Offering entered or issued by or procured
from a state securities commission or administrator, the
Securities and Exchange ("S.E.C."), 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 theft,
fraud or fraudulent conduct, or breach of fiduciary duty, or
(c) has been the subject in any state of any administrative
order, judgment, or decree 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 S.E.C. 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 or competent jurisdiction
temporarily or preliminarily restraining or enjoining, or is
subject to any order, judgment or decree of any court or
regulatory authority of competent jurisdiction entered within
five years prior to the commencement of the Offering,
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 commencement of the Offering or is subject to a
temporary restraining order or preliminary injunction with
respect to conduct alleged to have violated section 3005 of
Title 39, United States 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 S.E.C., 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 and associated
persons of any of the foregoing, or prohibits 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 S.E.C. 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
commencement of the Offering 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;
(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
(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 Issuer is subject to the requirements of
Section 12, 14, or 15(d) of the Securities Exchange Act of
1934, then, the Issuer has filed all reports required by those
Sections to be filed during the 12 calendar months preceding
the first sale of the issuer's securities under Rule 505 (or
for such shorter period that the Issuer was required to file
such reports).
