BOSTON CAPITAL TAX CREDIT FUND IV, ▇.▇.
▇▇▇▇▇▇▇ ASSOCIATES LIMITED PARTNERSHIP
CERTIFICATION AND AGREEMENT
CERTIFICATION AND AGREEMENT made as of November 1, 1995, by
▇▇▇▇▇▇▇ ASSOCIATES LIMITED PARTNERSHIP, a Nevada limited partnership
(the "Operating Partnership"); ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(the "Operating General Partners) and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ (the "Original Limited Partners") 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"), ▇▇▇▇▇ & ▇▇▇▇▇, P.C.
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 the
Second Amended and Restated Agreement and Certificate of Limited
Partnership of the Operating Partnership dated as of November 1, 1995
(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, ▇▇▇▇▇ & ▇▇▇▇▇, P.C., 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, ▇▇▇▇▇ & ▇▇▇▇▇,
P.C. and certain other persons hereinafter described.
1. Representations, Warranties and Covenants of the
Operating Partnership, the Operating General
Partner and the Limited Partner
The Operating Partnership, the Operating General Partner and the
Original Limited Partner jointly and severally represent, warrant and
certify to the Investment Partnership, Boston Capital, and ▇▇▇▇▇ &
▇▇▇▇▇, P.C. 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 any Operating General Partner or Original
Limited Partner is bound or any law, regulation, judgment, decree or
order applicable to the Operating Partnership or any 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 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 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 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 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 the 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 any Operating
General Partner or Original Limited Partner has received any notice
from any source whatsoever of the existence of any such hazardous
condition relating to the Apartment Complex or of any violation of any
local, state or federal law or regulation with respect to the
Apartment Complex.
1.15 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, ▇▇▇▇▇ &
▇▇▇▇▇, P.C., 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:
▇▇▇▇▇▇▇ ASSOCIATES LIMITED PARTNERSHIP
By: /a/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Its General Partner
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Its General Partner
OPERATING GENERAL PARTNERS:
By: /a/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Its General Partner
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Its General Partner
ORIGINAL LIMITED PARTNERS:
By: /a/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Its General Partner
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Its General Partner
3843_1
Exhibit A
▇▇▇▇▇▇▇ ASSOCIATES LIMITED PARTNERSHIP
FACT SHEET
1. Construction Financing
A. Lender: Midland Mortgage Investment
Corporation
B. Mortgage Amount: $1,235,000
C. Note Date:
D. Interest Rate:
E. Term:
2. Permanent Financing
A. Lender: FmHA
B. Mortgage Amount: $1,235,000
C. Obligation Date:
D. Note Date:
E. Interest Rate: 8.0%
F. Term: 50 years
G. Amortization: 50 years
3. Eligible Basis: $1,426,564
4. Qualified Basis: $1,426,564
5. Operating General Partner
Capital Contribution: $65,000 (initial, $51,000 repaid with
First Installment)
6. Working Capital Loan
Amount: $0
7. Type of Credit: 3.67%
8. Rent-up Schedule:
25% occupancy by May 1, 1996
50% occupancy by June 1, 1996
75% occupancy by July 1, 1996
100% occupancy by August 1, 1996
9. Projected Credit to the
Investment Partnership (99%) $440,293
A. $27,518 for 1996
B. $44,029 per annum for each of the
years 1997 through 2005
C. $16,511 for 2006 (provided,
however, that the projected credit
for 2005 shall be reduced by the
amount, if any, by which the
Actual Credit for 1996 exceeds
$27,518).
10. Total Projected Credit to the
Operating Partnership (100%) $444,740
A. $27,796 for 1996
B. $44,474 per annum for each of the
years 1997 through 2005
C. $16,678 for 2006.
11. Tax Credit Approval:
A. Application
1. Date: March 21, 1995
2. Amount requested: $ 55,000
B. Reservation
1. Date: July 21, 1995
2. Amount reserved: $ 44,474
12. Apartment Complex:
A. Name: Shadowcreek Apartments
B. Address: ▇▇▇▇▇▇▇, Nevada
C.. County: ▇▇▇▇▇
▇. Type of Project: Elderly
13. Area Median Income: $ 41,100
14. Type of Apartments:
Unit Basic Utility Market
Number Sq. Ft. Rent Allowance Rent
1-Bedroom 4 688 $405 $37 $442
2-Bedroom 16 860 $450 $46 $496
3-Bedroom 4 553 $498 $55
$553
15. Annual Operating Expenses
(beginning 1997): $ 65,620
16. Reserve Account
A. Annual: $ 13,000
B. Total: $130,000
17. Amount of Annual Asset Management
Fee to Boston Capital: $500
18. Amount of Annual Partnership
Management Fee: $500
19. Amount of Total Depreciable
Base Allocated to Personal
Property: $0 (0%)
20. Completion Date:
21. Total Capital Contribution of
Investment Partnership: $297,564
22. Schedule of Capital Contributions
A. $174,282 on the latest to occur of (i) Admission Date,
(ii) Tax Credit Set Aside, (iii) Construction
Loan Closing; or (iv) Permanent Mortgage
Commitment.
B. $ 61,641 on the latest to occur of (i) Completion Date,
(ii) Cost Certification, (iii) State
Designation, (iv) receipt of an updated title
insurance policy satisfactory to the Investment
Limited Partner, (v) compliance with Due
Diligence Recommendations satisfactory to the
Investment Limited Partner, (vi) receipt of
payoff letters from General Contractor stating
that all amounts payable to it have been paid in
full and that the Partnership has complied with
the terms of the Construction Contract, or (vii)
receipt of the Investment Limited Partner of an
estoppel letter from each Lender satisfactory to
it.
C. $ 28,8215 on the latest to occur of (i) the Initial 100%
Occupancy Date, (ii) Permanent Mortgage Commencement, or (iii)
Breakeven Point.
D. $ 25,820 upon receipt by the Investment Limited Partner of Form 8609
E. $10,000 on Breakeven Confirmation and receipt of an
audited financial statement for the year in which the
breakeven point occurs.
23. Fees and Other Items to be paid from Capital Contributions
Construction and Development Fee: $246,564
Return of Capital: $51,000
Return of Working Capital: $0
Developer's Overhead: $0
24. Operating General Partners: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
25. Ownership Interests
Normal Capital Cash
Operations Transactions Flow
Operating General Partner: 1% 50% 50%
Investment Partnership: 99% 49.999% 50%
Special Limited Partner: 0% .001% 0%
26. Management Agent: Westsates Property Management Company
Contact Person: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Amount of Fees: Maximum allowed by FmHA
27. Builder: G & T Construction
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount of Compensation: $______________
Builder's Profit: $ ____________
28. Auditor and Tax Return Preparer: Bygee & Child
Contact Person:
Address: Bountiful, Utah
Telephone Number:
Fax Number:
29. Federal Taxpayer ID Number: ▇▇-▇▇▇▇▇▇▇
30. Building Breakdown:
A. # of ▇▇▇▇▇ ▇▇
▇. # ▇▇ ▇▇▇▇▇▇▇▇ ▇
▇. ▇▇▇ #
▇▇: Boston Capital Communications Limited Partnership
Accounting Departmen
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 ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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 any State Securities
Act or for any broker-dealer or issuer with knowledge that such
broker-dealer or issuer had not or has not complied with any such 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).
11034_1