BOSTON CAPITAL TAX CREDIT FUND IV, L.P.
GRANDVIEW APARTMENTS LIMITED PARTNERSHIP
CERTIFICATION AND AGREEMENT
CERTIFICATION AND AGREEMENT made as of September
1, 1997, by, GRANDVIEW APARTMENTS LIMITED PARTNERSHIP, a
North Dakota limited partnership (the "Operating
Partnership"); XXXXXXX ENTERPRISES, INC. (the "Operating
General Partner) and XXXXX X. XXXXXXX AND XXXXXXX X. XXXXXX
(the "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.
(the "Special Limited Partner") (the Investment Partnership
and the Special Limited Partner may be collectively referred
to as "Boston Capital"), XXXXXXX, XXXXX & XXXXX, LLP 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 MarchSeptember 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 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, XXXXX & XXXXX, LLP, 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, XXXXXXX, XXXXX &
XXXXX, LLP 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 XXXXXXX, XXXXX & XXXXX, LLP
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, Xxxxxxx, Xxxxx & Xxxxx, LLP, 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:
GRANDVIEW APARTMENTS LIMITED PARTNERSHIP
By: XXXXXXX ENTERPRISES, INC.,
its General Partner
By:/s/Xxxxxx Gaulker
Xxxxxx Xxxxxxx,
its President
OPERATING GENERAL PARTNERS:
XXXXXXX ENTERPRISES, INC.,
its General Partner
By:/s/Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx,
its President
ORIGINAL LIMITED PARTNERS:
/s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Exhibit A
GRANDVIEW APARTMENTS LIMITED PARTENRSHIP
FACT SHEET
1. Sources and Uses of Funds
A. Sources
Permanent Mortgage - $1,191,700 ( 52%)
G. P. Capital - $ 11,000 ( 1%)
Defferred Development Fee - $ 8,478 ( 1%)
I.L.P. Capital - $1,069,522 ( 46%)
Total - $2,280,700 (100%)
B. Uses
Total Construction Cost - $1,874,600 ( 82%)
Total Soft Costs - $ 171,100 ( 7%)
Construction and
Development Fee - $ 55,000 ( 2%)
Land - $ 180,000 ( 8%)
Total - $2,280,700 (100%)
1. Construction Financing
A. Lender First International Bank &
Trust
B. Mortgage Amount: $1,240,000
C. Note Date: March 21, 1996
D. Interest Rate: 9.25% variable
E. Term: May 1, 1997
F. Amortization: 1 year
2. Permanent Financing
A. Lender Federal National Mortgage
Association
B. Mortgage Amount: $1,191,700
C. Note Date: TBD
D. Interest Rate: 8%
E. Term: 18 Years
F. Amortization: 30 Years
3. Eligible Basis: $2,034,600
4. Qualified Basis: $2,034,600
5. Operating General Partner
Capital Contribution: $11,000
6. Working Capital Loan
Amount: $0
7. Type of Credit: 8.6%
8. Rent-up Schedule:
44% occupancy by February 1, 1998
66% occupancy by March 1, 1998
80% occupancy by April 1, 1998
91% occupancy by May 1, 1998
100% occupancy by June 1, 1998
9. Projected Credit to the
Investment Partnership (99%) $1,725,035
A. $155,732 for 1997;
B. $172,504 per annum for each of the
years 1998 through 2006;
C. $16,771 for 2007 (provided, however,
that the projected credit for 2007
shall be reduced by the amount, if
any, by which the Actual Credit for
1997 exceeds $155,732).
10. Total Projected Credit to the
Operating Partnership (100%) $1,742,460
A. $157,035 for 1997;
B. $174,246 per annum for each of the
years 1998 through 2006;
C. $16,941 for 2007.
11. Tax Credit Approval:
A. Application
1. Date: August 14, 1994
2. Amount requested: $ 180,549
B. Reservation
1. Date: November 15, 1994
2. Amount Reserved: $ 176,938
12. Apartment Complex:
A. Name: Grandview Apartments
B. Address: 00xx Xxxxxx XX
Xxxxx, XX 00000
C. County: Cass
D. Type of Project: __________
13. Area Median Income: $42,100
14. Type of Apartments:
Uni Basic Utility
Number Sq. Ft. Rent Allowance
2-Bedroom 4 ___ $475 $16
2-Bedroom 2 ___ $460 $16
3-Bedroom 21 ___ $625 $17
3-Bedroom 9 ___ $530 $17
15. Annual Operating Expenses
(beginning 1998): $99,960 (plus approx.3%
annual increase)
16. Reserve Account
A. Annual: $ 9,692
B. Total: $96,920
17. Amount of Annual Asset Management
Fee to Boston Capital $ 3,000
(beginning 1997):
18. Amount of Annual Partnership
Management Fee
(beginning 1997): $ 3,000
19. Amount of Total Depreciable
Base Allocated to Personal
Property: $66,771 (3.28%)
20. Completion Date: ________________
21. Total Capital Contribution of
Investment Partnership: $1,069,522
22. Schedule of Capital Contributions
A. $534,761 on the latest to occur of (i) Admission
Date, (ii) Tax Credit Set Aside, or(iii) receipt of
Permanent Mortgage Commitment acceptable to the
Investment Limited Partner.
B. $267,381 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 and its counsel;
C. $247,380 on the latest to occur of (i) the
Initial 95% Occupancy Date, (ii) Permanent Mortgage
Commencement, (iii) Breakeven Point or, (iv) receipt
of a payoff letter from the contractor stating that
all amounts payable to the contractor have been
paid in full and that the Partnership is not in
violation of the construction contract or (v)
State Designation; and
D. $20,000 on the to occurrence of (i) receipt of a
tax return and an audited financial statement
for the year in which the Breakeven Point occurred.
23. Fees and Other Items to be paid from Capital
Contributions
Financing Shortfall: $1,023,000
Construction and Development Fee: $ 55,000
24. Operating General Partners: Gaukler Enterprises,
Inc.
Address: X.X. Xxx 000
Xxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
25. Ownership Interests
Normal Capital Cash
Operations Transactions Flow
Operating General Partner: 1% 50% 80%
Investment Partnership: 99% 49.99% 20%
Special Limited Partner: 0% 0.001% 0%
26. Management Agent: Valley Rental Service
Contact Person: Xxxxx X. Xxxxxxx
Address: X.X. Xxx 000
Xxxxxx Xxxx, XX 00000
Telephone Number: (000) 000-0000
Amount of Fees: 5% of gross monthly rent
collected
27. Builder: Valley Realty, Inc.
Address: X.X. Xxx 000
Xxxxxx Xxxx, XX 00000
Amount of Compensation: $1,874,600
Builder's Profit: $_______________
28. Auditor and Tax Return Preparer: Xxxxxxxxx, Xxxxx &
Co.
Contact Person:
Address: 000 XX 0xx Xxxxxx
X.X. Xxx 000
Xxxxxx Xxxx, XX 00000
Telephone Number: (000) 000-0000
Fax Number: (000) 000-0000
29. Federal Taxpayer ID Number: 00-0000000
30. Building Breakdown:
A. # of Xxxxx 00
X. # xx Xxxxxxxx 0
C. BIN # ND-94-00009 ND-94-00012
ND-94-00010 ND-94-00013
ND-94-00011 ND-94-00014
cc: Boston Capital Communications Limited Partnership
Accounting Department
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, preliminary 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) 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).
