Common use of Suitability Standards Clause in Contracts

Suitability Standards. Solicitation and other activities by the Sales Agents shall be undertaken only in accordance with this Agreement, the Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the applicable rules and regulations of the SEC, the Blue Sky Survey and the Rules of Fair Practice of the National Association of Securities Dealers, Inc. (the "NASD"), including, but not in any way limited to, Sections 8, 24, 25 and 36 of Article III of the Rules of Fair Practice. Each Sales Agent will procure information and documentation from each subscriber solicited by their registered representatives to demonstrate a reasonable basis to believe that the sale of Units solicited by it were to a subscriber who, on the basis of information obtained from the subscriber concerning his investment objectives, other investments, financial situation and requirements, and any other information known by the Sales Agent, after due inquiry, is or will be: (i) in a financial position appropriate to realize to a significant extent the benefits of the investment described in the Prospectus; and, (ii) the subscriber has a fair market net worth sufficient to sustain the risks inherent in the program, including loss of investment and lack of liquidity which shall be either: (a) a minimum annual gross income of $45,000 and a net worth (exclusive of home, home furnishings and automobiles) of $45,000; or (b) a net worth (determined with the foregoing exclusions) of $150,000; or (c) such other higher gross income and/or net worth requirements of the state where such investor resides; and, (iii) the Units are otherwise a suitable investment for the subscriber. Each Sales Agent shall maintain records disclosing the basis upon which they determined the suitability of any persons who purchased Units for a period of six years.