BOSTON CAPITAL TAX CREDIT FUND IV L.P.
Certification and Agreement
of
Xxxxxxx Associates L.P.
CERTIFICATION AND AGREEMENT made as of October 1, 1997 by
XXXXXXX ASSOCIATES L.P., a New York limited partnership (the
"Operating Partnership"); XXXXXXX OF HARLEM, INC. (referred to
herein, even if only one, as the "Operating General Partners");
and HARLEM CONGREGATIONS FOR COMMUNITY IMPROVEMENT, INC.
("Original Limited Partner") for the benefit of BOSTON CAPITAL
TAX CREDIT FUND IV L.P. (Series 27), a Delaware limited
partnership (the "Investment Partnership"), BOSTON CAPITAL
ASSOCIATES IV L.P. (the "Investment General Partner"), PEABODY &
XXXXX 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 October 1, 1997 (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 Investment General
Partner 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, Peabody & Xxxxx, 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 Partners and the Original Limited Partner
hereby agree as follows for the benefit of the Investment
Partnership, Investment General Partner, Peabody & Xxxxx and
certain other persons hereinafter described.
1. Representations, Warranties and Covenants of the
Operating Partnership, the Operating General Partners
and the Original Limited Partner
The Operating Partnership, the Operating General Partners
and the Original Limited Partner jointly and severally represent,
warrant and certify to the Investment Partnership, Investment
General Partner and Peabody & Xxxxx that, with respect to the
Operating Partnership, as of the date hereof:
A. 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 busi-
ness; the Operating Partnership, the Operating General Partners
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 Partners 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 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 Partners and the Original
Limited Partner, enforceable against each of them in accordance
with its terms.
B. The Operating General Partners have delivered to the
Investment Partnership, Investment General Partner 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, Investment General
Partner 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. The financial statements for the
Operating General Partners and their affiliates previously
delivered fairly present the financial condition of such parties
as of the dates of said financial statements and since the date
of such financial statements there has been no material adverse
change in the financial position of any of the Operating General
Partners or such affiliates. 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 Operating General Partners.
C. 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 Partners 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.
D. Each of the representations and warranties contained in
the Operating Partnership Agreement is true and correct as of the
date hereof.
E. 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 covenant or agreement is required
on or prior to the date hereof.
F. 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.
G. 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.
H. No person or entity other than the Operating
Partnership holds any equity interest in the Apartment Complex.
I. 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.
J. 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.
K. 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.
L. No Operating General Partner is related in any manner
to the Investment Partnership, nor is any Operating General
Partner acting as an agent of the Investment Partnership.
M. 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 biphenals (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.
N. 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.
O. The Apartment Complex will not upon completion of
rehabilitation be in violation of any State or local health or
building code or regulation.
P. 1997 low-income housing tax credit authorization in the
amount of at least $291,646 per annum for the Property has been
obtained by the Partnership from the tax credit agency of the
State of New York and is in full force and effect.
Q. All 22 rental dwelling units in the Property will be
leased to persons who satisfy the income restrictions under
Section 42(g)(1) of the Code at rents satisfying the rent
restrictions of Section 42(g)(2) of the Code.
R. All qualified low income dwelling units in the Property
will be occupied by tenants under leases with terms of not less
than six months.
S The Apartment Complex does not receive assistance under
the HUD Section 8 Moderate Rehabilitation Program.
T The Operating General Partners agree to take all
actions necessary to claim the Projected Credit, including,
without limitation, the filing of Form(s) 8609 with the Internal
Revenue Service.
U The Project is located in a qualified census tract or
difficult development area for purposes of Section 42(d)(5)(B) of
the Code.
V The allocation of 1997 low income housing tax credit to
the Property was not made pursuant to the "nonprofit set aside"
provisions of Section 42 of the Code. [to be discussed further?]
W No part of the Property nor its operation has been,
directly or indirectly, financed at any time with either (1) an
obligation the interests on which is exempt from tax under
Section 103 of the Code or (2) any loan funded in whole or in
part, directly or indirectly, with federal funds (other than
funds provided pursuant to Section 106, 107 or 108 of the Housing
and Community Development Act of 1974) if the interest rate
payable on such loan is less than the applicable federal rate in
effect under Section 1274(d)(1) of the Code (as of the date on
which the loan is made).
X Either (a) rehabilitation expenditures with respect to
each building of the Apartment Complex allocable to low income
units during a twenty-four month period are (or will be) equal to
or greater than the greater of $3,000 per low income unit or 10%
of the unadjusted basis of the building or (b) rehabilitation
expenditures with respect to each building of the Apartment
Complex allocable to low income units during a twenty-four month
period are (or will be) equal to at least $3,000 per low income
unit and the building was acquired from a governmental unit.
2. Indemnification
A. The Operating General Partners (for purposes of this
Section 2.A, the "Indemnifying Parties" or, individually, an
"Indemnifying Party") agree to indemnify and hold harmless the
Investment Partnership, Investment General Partner (for purposes
of this Section 2.A, 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, lead-based paint, asbestos, methane gas, urea formaldehyde
insulation, oil, toxic substance, underground storage tanks,
polychlorinated biphenals (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.
B. No Indemnifying Party shall be liable under the
indemnity agreements contained in Section 2.A 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.A. 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 any 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
A. This Certification and Agreement is made solely for the
benefit of the Operating Partnership, the Operating General
Partners, the Original Limited Partner, Investment General
Partner, Peabody & Xxxxx 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.
B. 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.
C. 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:
XXXXXXX ASSOCIATES L.P.
By: Xxxxxxx of Harlem, Inc.
By: /s/Xxxxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxxxxx,
President
OPERATING GENERAL PARTNER:
XXXXXXX OF HARLEM, INC.
By: /s/Xxxxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxxxxx,
President
ORIGINAL LIMITED PARTNER:
_____________________________
HARLEM CONGREGATIONS FOR
COMMUNITY IMPROVEMENT, INC.
By: /s/Xxxxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxxxxx,
President
Attachments
Exhibit A Fact Sheet
Exhibit B Certificate re Lack of Disqualifications
Exhibit A
XXXXXXX ASSOCIATES L.P.
FACT SHEET
Construction First
Mortgage Financing
Lender: Chase Community Development Corporation
Mortgage Amount: $318,000
Note Date: not yet closed
Interest Rate: 2% above (a) the Prime Rate or (b) the Alternate Base Rate
Guarantors: Novelex/MDG J.V.
Term: 18 months
Commitment Fees: $6,360
Permanent First
Mortgage
Financing
Lender: Chase Community Development
Corporation Mortgage Amount: $318,000
Note Date: not yet closed
Interest Rate: 8.56%
Term: 15 years
Construction and
Permanent Second
Mortgage Financing
Lender: New York State Housing Trust Fund
Mortgage Amount: $690,000
Note Date: not yet closed
Interest Rate: 1% - permanent
6% - construction
Term: 18 months - construction
30 years - permanent
Master Lease: to be entered into prior to
Permanent Mortgage Commencement
GP Capital
Contribution: $100
Total Capital
Contribution of
Investment
Partnership: $1,893,804
Capital
Contribution
$1,515,042 on the later of (i) the Admission Date, (ii)
Construction Mortgage Closing or (iii) Permanent
Mortgage Commitments;
$184,257 on the later of (i) the Completion Date, (ii) State
Designation, (iii) receipt by the Limited Partners
of a copy of the Partnership's owner's title
insurance policy, as endorsed through Permanent
Mortgage Commencement, with such policy, and
endorsement in form and substance satisfactory to
the Special Limited Partner, (iv) receipt of the
Contractor Payment Letter and (v) receipt of the
Lender Estoppel Letter;
$184,257 on the latest of (i) the Initial 100% Occupancy
Date, (ii) State Designation, (iii) Permanent
Mortgage Commencement, (iv) an opinion of counsel
to the Partnership concerning the Permanent
Mortgage, including the non-recourse nature
thereof, satisfactory as to form, content and
counsel to the Special Limited Partner and
(v) Rental Achievement;
$10,248 on Rental Achievement Confirmation.
Fees, Special
Distributions and
Other Items to be
paid from Capital
Contributions.
Construction and
Development Fee: $345,072 (of which $326,388 is payable from Capital
Contributions and the $18,684 balance of which is
deferred)
Amount of annual
Asset Management
Fee: $2,000 (1999)
Amount of annual
Partnership
Management Fee: $7,500 (1999)
Ownership Interests General Partners Investment Limited Special Limited
Partner Limited Partner
Profits, Losses
and Credits 0.1% 99.900% 0.000%
Cash Flow 80.0% 20.000% 0.000%
Capital Transaction 70.0% 29.999% 0.001%
Type of Credit: Nine Percent
Eligible Basis: $2,618,328
Qualified Basis: $3,403,826 (130%)
LIHC Rate: 8.57%% (anticipated rate presumed
to be in effect on the placed in
service date)
To the To the
Projected Credit Partnership Investment Partnership
Partnership (100%): (99.9%):
Each of the years
1999 through 2008: $291,646 per annum $291,354 per annum
Tax Credit Approval:
Reservation
Date: December 12, 1996
Credit Amount Reserved: $291,646
Building Breakdown:
#1
Unit #s 23
Number of units in
building
Apartment Complex:
Name: Xxxxxxx Court Apartments
Address: 000-000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX
Type of Project: Family
Area Median Income: $45,800
Type of Apartments:
Unit Size Number Square Feet Rent Utility
Allowance
1 bedroom 5 914 $460 $34
2 bedroom 16 877 $556 $40
3 bedroom 2 1,395 $650 $44
Rent-up Schedule: Occupancy As of the end of:
percentage: January 1997
100%
Annual Operating Expenses (beginning 1999): $90,468
Replacement Reserve Account
Annual Deposit: $4,600
Total: $46,000
Projected gross
annual Cash Flow: $7,083 (1999)
Amount of Total
Depreciable Base
Allocated to
Personal Property: $47,582
Projected Completion Date: November 18, 1998
General Partner: Xxxxxxx of Harlem, Inc.
Address: 0000 Xxxxxxxxx Xxxxxxxx Xxxx.
Xxx Xxxx, XX 00000
Telephone Number:
(000) 000-0000
Contact Person: Rev. Xx. Xxxxxxx Xxxxxxxxxx,
President
Guarantors of
General Partner
Obligations: Harlem Congregations for Community
Improvement, Inc.
Management Agent: Prestige Management, Inc.
Address: 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Amount of Fee: 8% of Gross Receipts
Builder: Novalex/MDG J.V.
Address: 0000 Xxxxxxxxx Xxxxxxxx Xxxx.
Xxx Xxxx, XX 00000
Architect: Xxx X. Xxxxxx, Architect
Address: 0000 Xxxxxxxx
Xxxxxxxx, XX
Operating Deficit Guaranty: The General Partners shall be obligated
during the 36-month period commencing on
Permanent Mortgage Commencement to advance
any funds which may be necessary
to meet cash operating expenses
which exceed cash operating income.
Replacement Reserve: The General Partners shall cause
the Partnership to deposit at
least $4,600 annually into the
Replacement Reserve. The Replacement Reserve
shall be funded by the General Partners in
the event that there is insufficient operating
income to fund the Replacement Reserve.
cc: Boston Capital Communications Limited Partnership
Accounting Department
Exhibit B
Certificate of Operating Partnership,
Operating General Partners and Original
Limited Partner Re: Lack of Disqualifications
The Operating Partnership, its Operating General Partners
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 any 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 a
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 Secu-
rities 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 custo-
mer or is the subject of sanctions imposed by any state or
federal securities agency or self-regulatory agency;
(12) Is insolvent, either in the sense that his
liabilities exceed his assets or in the sense that he cannot meet
his obligations as they mature, or is in such financial condition
that he cannot continue his business with safety to his
customers, or has not sufficient financial responsibility to
carry out the obligations incident to his operations or has been
adjudged a bankrupt or made a general assignment for the benefit
of creditors; or
(13) Is selling or has sold, or is offering or has
offered for sale, in any state securities through any
unregistered agent required to be registered under the
Pennsylvania Securities Act of 1972, as amended (the
"Pennsylvania Act") or for any broker-dealer or issuer with
knowledge that such broker- dealer or issuer had not or has not
complied with the Pennsylvania Act.
(14) 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).
