NEW DEVONSHIRE, WEST, LIMITED PARTNERSHIP,
An Ohio Limited Partnership
CERTIFICATION AND AGREEMENT
CERTIFICATION AND AGREEMENT made as of January 30, 1997, by New
Devonshire, West, Limited Partnership, An Ohio Limited Partnership
(the "Operating Partnership"); Xxxxxxx X. Xxxxxxx and Fairfield Homes,
Inc., its general partners (the "General Partners"); and Xxxxxxx X.
Xxxxxxx and Fairfield Homes, Inc., its limited partners (the
"Withdrawing Original Limited Partners") for the benefit of Boston
Capital Tax Credit Fund IV, L.P., a Delaware limited partnership, (the
"Investment Partnership"), BCTC 94, Inc., and Xxxxxxx, Xxxxxxxx &
Xxxxxxx, 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 an
Amended and Restated Agreement of Limited Partnership of the Operating
Partnership, dated as of January 30, 1997 (the "Operating Partnership
Agreement"), and in accordance with which the Investment Partnership
will make substantial capital contributions to the Operating
Partnership;
WHEREAS, the Investment Partnership and Boston Capital have
relied upon certain information and representations described herein
in evaluating the merits of investment by the Investment Partnership
in the Operating Partnership; and
WHEREAS, Xxxxxxx, Xxxxxxxx & Xxxxxxx, as counsel for the
Investment Partnership, will rely upon such information and
representations in connection with its delivery of certain opinions
with respect to this transaction;
NOW, THEREFORE, to induce the Investment Partnership to enter
into the Operating Partnership Agreement and become a limited partner
of the Operating Partnership, and for $1.00 and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Operating Partnership, the General Partners and the
Withdrawing Original Limited Partners hereby agree as follows for the
benefit of the Investment Partnership, Boston Capital, Xxxxxxx,
Xxxxxxxx & Xxxxxxx, and certain other persons hereinafter described.
1. Representations, warranties and Covenants of the Operating
Partnership and the General Partners
The Operating Partnership and the General Partners jointly and
severally represent, warrant and certify to the Investment
Partnership, Boston Capital, and Xxxxxxx, Xxxxxxxx & Xxxxxxx, 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 Ohio with full power and authority to own the apartment
complex (the "Apartment Complex") and conduct its business; the
Operating Partnership, the General Partners and the Withdrawing
Original Limited Partners have the power and authority to enter into
and perform this Certification and Agreement; the execution and
delivery of this Certification and Agreement by the Operating
Partnership, the General Partners and the Withdrawing Original Limited
Partners have been duly and validly authorized by all necessary
action; the execution and delivery of this Certification and
Agreement, the fulfillment of its terms and consummation of the
transactions contemplated hereunder do not and will not conflict with
or result in a violation, breach or termination of or constitute a
default under (or would not result in such a conflict, violation,
breach, termination or default with the giving of notice or passage of
time or both) any other agreement, indenture or instrument by which
the Operating Partnership or General Partners or Withdrawing Original
Limited Partners are bound or any law, regulation, judgment, decree or
order applicable to the Operating Partnership or the General Partners
or the Withdrawing Original Limited Partners or any of their
respective properties; this Certification and Agreement constitutes
the valid and binding agreement of the Operating Partnership, the
General Partners and the Withdrawing Original Limited Partners,
enforceable against each of them in accordance with its terms.
1.02 The General Partners have delivered to the Investment
Partnership, Boston Capital or their affiliates all documents and
information which would be material to a prudent investor in deciding
whether to invest in the Operating Partnership. All factual
information, including without limitation the information set forth in
Exhibit A hereto, provided to the Investment Partnership, Boston
Capital or their affiliates either in writing or orally, did not, at
the time given, and does not, on the date hereof, contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they are made.
Since the date of the financial statements for the General Partners
previously delivered, there has been no material adverse change in the
financial position of the General Partners. The estimates of occupancy
rates, operating expenses, cash flow, depreciation and tax credits set
forth on Exhibit A are reasonable in light of the knowledge and
experience of the General Partners.
1.03 As of the date hereof, each of the representations
contained in Exhibit B attached hereto is true, accurate and complete
as to each of the Operating Partnership, the General Partners and the
Withdrawing Original Limited Partners and as to any of their
affiliates, any of their predecessors and their affiliates,
predecessors, any of their directors, officers, general partners
and/or beneficial owners of ten percent (10%) or more of any class of
their equity securities (beneficial ownership meaning the power to
vote or direct the vote and/or the power to dispose or direct the
disposition of such securities), as the case may be, and any promoters
presently connected with them in any capacity.
1.04 Each of the representations and warranties contained in
the Operating Partnership Agreement is true and correct as of the date
hereof.
1.05 Each of the covenants and agreements of the Operating
Partnership and the General Partners contained in the Operating
Partnership Agreement have been duly performed to the extent that
performance of any covenant or agreement is required on or prior to
the date hereof.
1.06 All conditions to admission of the Investment Partnership
as the investment limited partner of the Operating Partnership
contained in the Operating Partnership Agreement have been satisfied.
1.07 No default has occurred and is continuing under the
Operating Partnership Agreement or any of the Project Documents (as
said term is defined in the Operating Partnership Agreement) for the
Operating Partnership.
1.08 The General Partners agree to take all actions necessary
to claim the Projected Credit, including, without limitation, the
filing of a Form 8609 with the Internal Revenue Service.
1.09 No person or entity other than the Operating Partnership
holds any equity interest in the Apartment Complex.
1.10 The Operating Partnership has the sole
responsibility to pay all maintenance and operating costs, including
all taxes levied and all insurance costs, attributable to the
Apartment Complex.
1.11 The Operating Partnership, except to the extent it is
protected by insurance and excluding any risk borne by lenders, bears
the sole risk of loss if the Apartment Complex is destroyed or
condemned or there is a diminution in the value of the Apartment
Complex.
1.12 No person or entity except the Operating Partnership has
the right to any proceeds, after payment of all indebtedness, from the
sale, refinancing, or leasing of the Apartment Complex.
1.13 The General Partners are not related in any manner to the
Investment Partnership, nor are the General Partners acting as an
agent of the Investment Partnership.
1.14 The Apartment Complex contains no substance known to be
hazardous, such as hazardous waste, lead-based paint, asbestos,
methane gas, urea formaldehyde insulation, oil, toxic substances,
underground storage tanks, polychlorinated biphenyls (PCBs), and
radon; the Apartment Complex is not affected by the presence of oil,
toxic substances, or other pollutants that could be a detriment to the
Apartment Complex nor is the Operating Partnership in violation of any
local, state, or federal law or regulation; and no violation of the
Clean Air Act, Clean Water Act, Resource Conservation and Recovery
Act, Toxic Substance Control Act, Safe Drinking Water Control Act,
Comprehensive Environmental Resource Compensation and Liability Act,
or Occupational Safety and Health Act has occurred or is continuing.
Neither the Operating Partnership nor the General Partners nor the
Withdrawing Original Limited Partners have received any notice from
any source whatsoever of the existence of any such hazardous condition
relating to the Apartment Complex or of any violation of any local,
state or federal law or regulation with respect to the Apartment
Complex.
1.15 The fair market value of the Apartment Complex exceeds the
total amount of indebtedness encumbering the Apartment Complex and is
expected to continue to do so throughout the term of such
indebtedness.
1.16 No building constituting part of the Apartment Complex was
placed in service during the 10-year period prior to its acquisition
by the Operating Partnership.
1.17 During the 12-year period prior to its acquisition by the
Partnership, there have not been improvements added to depreciable
basis with respect to any building constituting part of the Apartment
Complex which, during any 24-month period, aggregated 25% or more of
the adjusted basis of such building computed without taking into
account depreciation deductions, and with respect to which
improvements either (a) five-year amortization under Section 167(k) of
the Code was elected or (b) the depreciation rules governing property
placed in service between January 1, 1981 and December 31, 1986
applied.
1.18 Those persons that are Partners of the Operating
Partnership and persons related to such partners (including family
members) owned 10% or less of the capital interests and 10% or less of
the profits interests in the partnership or other entity (including
proportionate shares of interest owned indirectly by partners of the
Operating Partnership or such related persons through corporations,
partnerships, estates or trusts) from which the Partnership acquired
the Apartment Complex.
2. Indemnification
2.01 The General Partners (for purposes of this Section 2.01,
(the "Indemnifying Parties") 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 Parties of any of their representations,
warranties or covenants to such Indemnified Party or any such of its
officers, directors, employees or controlling persons under this
Certification and Agreement or (ii) liability under any statute,
regulation, ordinance, or other provision of federal, state, or local
law or any civil action pertaining to the protection of the
environment or otherwise pertaining to public health or employee
health and safety, including, without limitation, protection from
hazardous waste, lead-based paint, asbestos, methane gas, urea
formaldehyde insulation, oil, toxic substance, underground storage
tanks, polychlorinated biphenyls (PCBs), and radon; and to reimburse
each such Indemnified Party and each such officer, director, employee
or controlling person for any legal or other expenses reasonably
incurred by it or them in connection with investigating or defending
against any such Liability or action; provided, however, that the
Indemnifying Parties 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 Parties 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 Parties may otherwise have.
2.02 The Indemnifying Parties shall not be liable under the
indemnity agreements contained in Section 2.01 unless the Indemnified
Party shall have notified the Indemnifying Parties 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 Parties 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 Parties of the commencement thereof as aforesaid, the
Indemnifying Parties shall be entitled to participate at their own
expense in the defense, or, if they so elect, in accordance with
arrangements satisfactory to the any Indemnifying Parties 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 Parties 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 Parties, the Indemnifying Parties
shall not be liable to such Indemnified Party or any such of its
officers, directors, employees or controlling persons for any legal or
other expenses subsequently incurred by such Indemnified Party or any
such of its officers, directors, employees or controlling persons in
connection with the defense thereof, other than the reasonable costs
of investigation.
3. Miscellaneous
3.01 This Certification and Agreement is made solely for
the benefit of the Operating Partnership, the General Partners, the
Withdrawing Original Limited Partners, Boston Capital, Xxxxxxx,
Xxxxxxxx & Xxxxxxx 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 NEW DEVONSHIRE, WEST,
LIMITED PARTNERSHIP,
By: Xxxxxxx X. Xxxxxxx
Its: General Partner
/s/ Xxxxxxx X. Xxxxxxx
By: Fairfield Homes, Inc.
Its: General Partner
/s/ Xxxxxxx X. Xxxxxxx
GENERAL PARTNER AND XXXXXXX X. XXXXXXX
INDEMNIFYING PARTY
/s/ Xxxxxxx X. Xxxxxxx
GENERAL PARTNER AND FAIRFIELD HOMES, INC.
INDEMNIFYING PARTY
By: Xxxxxxx X. Xxxxxxx
Its: President
/s/ Xxxxxxx X. Xxxxxxx
WITHDRAWING ORIGINAL XXXXXXX X. XXXXXXX
LIMITED PARTNERS
/s/ Xxxxxxx X. Xxxxxxx
FAIRFIELD HOMES, INC.
By: Xxxxxxx X. Xxxxxxx
Its: President
/s/ Xxxxxxx X. Xxxxxxx
Exhibit A
NEW DEVONSHIRE, WEST, LIMITED PARTNERSHIP
FACT SHEET
1. Sources and Uses
A. Sources
i. Permanent Mortgages $549,222 (80%)
ii. LIHTC Equity $126,983 (19%)
iii. General Partner Equity $10,165 ( 1%)
TOTAL
$686,370 (100.00%)
B. Uses
i. Total Construction Costs $190,765 (28%)
ii. Acquisition Costs (Land and/or Building)
a. Land $ 31,000 (
4%)
b. Building $416,658 (60%)
iii. Architect, Accounting, Legal
& Engineering $11,100 (2%)
iv. Developer Fees $11,499 (2%)
v. Construction Interest $2,500 ( 1%)
vi. Loan Fees $1,900 ( 0%)
vii. Construction Contingency $609 ( 0%)
viii. Operating Reserve &
Miscellaneous $15,383 ( 2%)
ix. LIHTC Fees/Consulting &
Compliance Monitoring $4,956 ( 1%)
TOTAL $691,8
70 (100.00%)
Deficit $5,500
2. Construction Financing
A. Lender Fairfield
National
Bank
B. Mortgage Amount $181,335
i. Note Date March 13, 1996
ii. Interest Rate 8.50%
iii. Term 9 months
iv. Fee $453
3. Permanent Financing
A. Lender (First Mortgage) RD, USDA
B. Mortgage Amount: $357,722
i. Note Date: August 22,
1979
ii. Interest Rate: 8% with interest
credit to 1%
iii. Term: 50 years
iv. Amortization: 600 installments
A. Lender (Second Mortgage) RD, USDA
B. Mortgage Amount $191,500
i. Note Date: N/A (upon completion)
ii. Interest Rate: 8.75% with interest
credit to 1%
iii. Term: 50 years
iv. Amortization 600 installments
4. Total Construction Costs: $190,765
5. Construction Commencement: March, 1996
6. Construction Completion: January, 1997
7. Eligible Basis: $597,523
8. Qualified Basis: $597,523
9. Capital Contribution:
General Partners $10,165
Investment Limited Partner $126,983
10. Type of Credit: Acquisition and
Rehabi
litation
11. Rent-up Schedule: January, 1997
12. Projected Credit to the
Investment Partnership (99%): $21,523
13. Total Projected Credit to the
Operating Partnership (100%): $21,740
14. Tax Credit Approval:
A. Application
i. Filing Date: February 22, 1996
ii. Credit Amount Requested: $21,984
B. Reservation
i. Date: April 24, 1996
ii. Credit Amount Reserved: $21,740
C. Allocation
i. Date: December
20, 1996
ii. Credit Amount Allocated: $21,740
15. Apartment Complex
A. Name: Devonshire West
Apartments
B. Address: 00-000 Xxxx Xxxxxx
Xxxx
Xxxxxxxxx, Xxxx 00000-0000
C. Type of Project: Family
16. Area Median Income: $44,600
17. Type of Apartments: Xxxxxx Xxxxxxxxxx
# Xxxx Xx. Ft. Basic Rent Util.Allow. Market Rent
1BR (60% median) 7 600 255 45 378
2BR (60% median) 12 750 290 50 460
18. Number of Units Receiving
Rental Assistance: 19
19. Annual Operating Expenses
(beginning 1997): $47,828
20. Replacement Reserve Account
A. Annual: $4,500
B. Required Total Accumulation: $45,000
21. Operating Reserve Account: $0
22. Amount of Annual Reporting
Fee to Boston Capital: $1,187
23. Amount of Annual Partnership
Management Fee: $1,187
24. Amount of Total Depreciable Base
Allocated to Personal Property: $13,607
25. Total Capital Contribution of
Investment Partnership: $126,983
26. Schedule of Capital Contribution
$126,983 on Admission Date
27. General Partners: Xxxxxxx X. Xxxxxxx
000 Xxxxxxxx
Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxx
00000-0000
Fairfield
Homes, Inc.
000 Xxxxxxxx
Xxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxx
00000-0000
28. Ownership Interests
Normal Operations
Capital Transactions
A. General Partners: 1.0%
1.0%
B. Investment L.P.: 99.0%
99.0%
29. Management Agent: Xxxxxxx Management,
Inc.
Contact Person: Xxxxxxx X.
Xxxxxxx
A. Address: 000 Xxxx Xxxxxxxx
Xxxxxx
Xxxxxxxxx,
Xxxx 00000-0000
B. Telephone Number: 000-000-0000
C. Amount of Management Fees: 8.75% of gross rental
receipts
($25/
month/ occupied unit)
30. Builder: Fairfield Homes, Inc.
Contact Person: Xxxxxxx X.
Xxxxxxx
A. Address: 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxx 00000-0000
B. Telephone Number: 000-000-0000
C. Builder/Developer Profit: $11,499
31. Architect: Xxxxxx X.
Xxxxxxxxxxxx &
Associates
Contact Person: Xxxxxx X.
Xxxxxxxxxxxx
A. Address: 000 Xxxxx Xxxxx
Xxxxxx,
Xxxxx 000
Xxxxxxxx,
Xxxx
B. Telephone Number: 614-224-2083
C. Amount of Fee: $6,000
32. Auditor and Tax Return Preparer: Xxxxx & London, CPAs
Contact Person: Xxxxxxx Xxxxx
A. Address: 0000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxx 00000
B. Telephone Number: 614-224-0955
C. Fee: $3,500
33. Federal Taxpayer I.D. Number: 00-0000000
34. Operating Deficit Guarantees: Xxxxxxx X. Xxxxxxx;
Fairfield Homes, Inc.
Xxxxxxx X. Xxxxxxx, individually, and Fairfield Homes, Inc., on
behalf of the Operating Partnership, shall be obligated to make
Subordinated Loans to the Partnership to cover debt service,
operating expenses and the Replacement Reserve Fund to the
extent these exceed available operating income.
35. Building Breakdown
A. of units: 19
B. of Buildings: 3
BIN: OH-96-00645-00647
cc: Boston Capital
Accounting Department
Exhibit B
Certificate of Operating Partnership, General Partners
and Withdrawing Original Limited Partners
Re: Lack of Disqualifications
The Operating Partnership, its General Partners and its
Withdrawing Original Limited Partners (as identified on the
Certification and Agreement to which this Certificate is attached as
Exhibit B) hereby represent to you that neither (i) the Operating
Partnership, (ii) any predecessor of the Operating Partnership, (iii)
any of the Operating Partnership's affiliates ("affiliate" meaning a
person that controls or is controlled by, or is under common control
with, the Operating Partnership) , (iv) any sponsor (meaning any
person who (1) is directly or indirectly instrumental in organizing
the Operating Partnership or (2) will directly or indirectly manage or
participate in the management of the Operating Partnership or (3) will
regularly perform, or select the person or entity who will regularly
perform, the primary activities of the Operating Partnership), (v) any
officer, director, principal or general partner of the Operating
Partnership or of any sponsor, (vi) any officer, director, principal,
promoter or general partner of the General Partners or Fiscal 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) 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).
