XXXXXXX XXXXX KECALP L.P. 1999
(A Delaware Limited Partnership)
500,000 Units of Limited Partnership Interest
AGENCY AGREEMENT
September __, 1998
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
North Tower - 27th floor
World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
Xxxxxxx Xxxxx KECALP L.P. 1999, a limited partnership (the
"Partnership") organized under the Revised Uniform Limited Partnership Act of
the State of Delaware (the "RULPA") by its general partner, KECALP Inc., a
Delaware corporation (the "General Partner"), to invest a substantial portion of
the funds of the Partnership in privately-offered equity investments (the
"Investments") seeking, among other things, capital appreciation, as described
in the Prospectus referred to below, proposes to offer for sale 500,000 units of
limited partnership interest ("Units") in the Partnership. Each prospective
investor subscribing to purchase Units (collectively, the "Subscribers") will be
required to execute and deliver a subscription agreement (a "Subscription
Agreement"), including a Limited Partner Signature Page and Power of Attorney,
substantially in the form thereof attached as Exhibit B to the Prospectus
referred to below.
The Partnership has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form N-2 (No. 333-59143) and a
related preliminary prospectus for the registration of the Units under the
Securities Act of 1933, as amended and the registration of the Partnership under
the Investment Company Act of 1940, as amended (the "1933 Act" and the "1940
Act", respectively). Such registration statement, as amended, at the time it is
declared effective by the Commission is hereinafter referred to as the
"Registration Statement" and the final prospectus included therein is
hereinafter referred to as the "Prospectus", except that (i) if the Partnership
files a post-effective amendment to the Registration Statement, then the term
"Registration Statement" shall, from and after the declaration of the
effectiveness of such post-effective amendment thereto, refer to the
Registration Statement as amended, and the term "Prospectus" shall refer to the
amended prospectus included in the Registration Statement as amended, and (ii)
if any prospectus filed by the Partnership pursuant to either Rule 497(b) or (d)
of the rules and regulations of the Commission under the 1933 Act (the
"Regulations") differs from the prospectus on file at the time the Registration
Statement or any post-effective amendment thereto becomes effective, the term
"Prospectus" shall refer to the Rule 497(b) or (d) prospectus from and after the
time it is mailed to the Commission for filing. If the Partnership files a
registration statement to register a portion of the Units and relies on Rule
462(b) for such registration statement to become effective upon filing with the
Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" herein shall be deemed to be to the registration
statements referred to above and the Rule 462 Registration Statement, as each
such registration statement may be amended pursuant to the 1933 Act, and from
and after the filing of any such Registration Statement pursuant to Rule 462,
the term "Units" herein shall include units of limited partner interest of the
Partnership registered pursuant to such Registration Statement.
Section 1. Appointment of Agent. On the basis of the representations,
--------------------
warranties and covenants herein contained, but subject to the terms and
conditions herein set forth, you are hereby appointed the exclusive agent of the
General Partner and the Partnership during the Offering Period herein specified
for the purpose of finding qualified Subscribers for the Units for the account
of the Partnership through the offering herein contemplated. The Offering Period
shall commence on the day that the Prospectus is first made available to you by
the General Partner for delivery in connection with the offering for sale of the
Units and shall continue until such date as you and the General Partner shall
agree upon (such date being hereinafter referred to as the "Offering Termination
Date"); provided, however, that unless 75,000 Units are subscribed for, none
will be sold and all payments received will be refunded with interest. Subject
to the performance by the General Partner and the Partnership of all of their
obligations to be performed hereunder, and to the completeness and accuracy of
all of the representations and warranties contained herein, you hereby accept
such agency and agree on the terms and conditions herein set forth to use your
best efforts during the Offering Period to find qualified Subscribers. Your
agency hereunder, which is coupled with an interest and, therefore, is not
terminable by the General Partner without your permission, except as otherwise
expressly so provided in this Section 1, shall continue until the termination of
the Offering Period. Any termination of your agency or of this Agency Agreement
shall be without obligation on your part or on the part of the General Partner
or the Partnership except as provided in Section 6 hereof, and except that the
indemnification provided in Section 8 hereof shall continue after such
termination of this Agency Agreement.
Section 2. Representations and Warranties of the Partnership and the
-----------------------------------------------------------
General Partner. The General Partner and the Partnership each represents,
----------------
warrants and agrees with you for your benefit that:
(a) At the time the Registration Statement initially becomes
effective and at the time any post-effective amendment thereto or new
registration statement referred to above becomes effective, the Registration
Statement will comply in all material respects with the requirements of the 1933
Act and the Regulations and the 1940 Act and the regulations thereunder and will
not 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, and at the time the Registration Statement becomes effective
(unless the term "Prospectus" refers to the Rule 497(b) or (d) prospectus, in
which case at the time it is mailed to the Commission for filing) and at the
Closing Time referred to in Section 4, the Prospectus and any supplemental sales
material supplied to you pursuant to Section 5(i) hereof (when read in
conjunction with the Prospectus) will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and warranties
in this subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information furnished to the Partnership or the General Partner in writing
by you expressly for use in the Registration Statement or Prospectus.
(b) The Agreement of Limited Partnership governing the
Partnership (the "Partnership Agreement") provides for the subscription for and
sale of the Units; all action required to be taken by the General Partner and
the Partnership as a condition to the subscription for and sale of the Units to
qualified Subscribers therefor has been or, prior to the Closing Time referred
to below, will have been taken, and, upon payment of the consideration therefor
specified in the Subscription Agreement, the Units will constitute valid limited
partnership interests in the Partnership, and, on the assumption that the
Limited Partners of the Partnership take no part in the control of the
Partnership's business, the liability of each such Limited Partner will be
limited to the capital contributions which such Limited Partner is obligated to
make to the Partnership (subject to the obligation of a Limited Partner to repay
(i) to the Partnership, to the extent provided under RULPA Section 17-608, for a
period of one year after any rightful return, any part of his capital
contribution rightfully returned to him, but only to the extent necessary to
discharge the Partnership's liabilities to creditors who extended credit to the
Partnership during the period the capital contribution was held by the
Partnership, and (ii) any funds wrongfully returned or distributed to such
Limited Partner), and the Subscribers will be Limited Partners of the
Partnership entitled to all the benefits of Limited Partners under the
Partnership Agreement and the RULPA. There are no provisions in the Partnership
Agreement the inclusion of which, subject to the terms and conditions therein,
shall cause the Limited Partners to be deemed to be taking part in the control
of the Partnership's business.
(c) The Partnership is a limited partnership duly organized
pursuant to the Partnership Agreement and subject to the RULPA and existing
under the laws of the State of Delaware with full power and authority to invest
in the Investments and to conduct the business in which it is engaged or
proposes to engage, as described in the Prospectus.
(d) On the date hereof the General Partner is, and at all times
through the Closing Time referred to below will be, duly and validly organized,
validly existing and in good standing as a corporation under the laws of the
State of Delaware with full power and authority to act as General Partner of the
Partnership, as described in the Prospectus, and at Closing Time either the
General Partner will be qualified to do business as a foreign corporation in New
York and each other jurisdiction in which such qualification is necessary in
order to enable it to act as General Partner of the Partnership, or the failure
so to qualify in any such other jurisdiction will not affect in any material way
the General Partner's ability to so act as General Partner.
(e) The accountants who certified the financial statements of the
Partnership included in the Registration Statement are independent public
accountants as required by the 1933 Act and the Regulations.
(f) The financial statements of the Partnership and the General
Partner included in the Registration Statement present fairly the financial
position of the Partnership and the General Partner as at the dates indicated;
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis; and since the date
of the most recent balance sheets included in the Registration Statement through
the date hereof there has not been, and through the Closing Time referred to
below there will not have been, any material adverse change in the financial
position of the Partnership or the General Partner.
(g) Since December 31, 1997, (i) there has not been any change in
the condition, financial or otherwise, of the General Partner, or in the
earnings, business affairs or business prospects of the General Partner, whether
or not arising in the ordinary course of business, which could materially
adversely affect the ability of the General Partner to carry out its obligations
to the Partnership and (ii) no action, suit or proceeding at law or in equity is
pending or, to the knowledge of the General Partner threatened against or
affecting the General Partner, before or by any governmental official,
commission, board or other administrative agency, which could materially
adversely affect the consummation of this Agency Agreement or the transactions
contemplated hereby.
(h) This Agency Agreement has been duly and validly authorized,
executed and delivered by or on behalf of the Partnership and the General
Partner.
(i) The Partnership Agreement has been duly and validly
authorized, executed and delivered by or on behalf of the General Partner.
(j) The execution and delivery of this Agency Agreement, of each
Subscription Agreement accepted by the General Partner and of the Partnership
Agreement, the incurrence of the obligations herein and therein set forth and
the consummation of the transactions described or contemplated herein and
therein and in the Prospectus will not constitute a breach of, or default under,
any instrument by which the General Partner or the Partnership is bound or any
order, rule or regulation applicable to the General Partner or the Partnership
or the proposed operation of the Partnership, as described in the Prospectus, of
any court or any governmental body or administrative agency having jurisdiction
over the General Partner or the Partnership.
(k) The Partnership is duly registered with the Commission under
the 1940 Act as a closed-end, non-diversified, management investment company.
Section 3. Your Representations and Warranties. You represent and
--------------------------------------
warrant that:
(a) In offering the Units for sale you will not offer the Units
for sale, or solicit any offers to buy any Units, or otherwise negotiate with
any person in respect of the Units, on the basis of any communications or
documents relating to the Units or any investment therein or to the Partnership
or investment therein or to the General Partner, other than the Prospectus, the
Exhibits attached thereto and any other document, and any cover or transmittal
letter, satisfactory in form and substance to the General Partner and counsel
for the General Partner.
(b) You will offer the Units for sale, or solicit offers to buy
the Units, or otherwise negotiate with any person with respect to any Units,
only as your counsel advise is in compliance with the securities or "blue sky"
laws of the jurisdictions designated by you in accordance with the provisions of
Section 5 hereof, which advice of your counsel (which shall not be understood to
constitute an opinion of law) may be based upon an examination of the statutes
and regulations, if any, of such jurisdictions as reported in standard
compilations and upon interpretive advice obtained from representatives of
certain securities commissions.
(c) You will offer the Units for sale in compliance with the
requirements as to suitability set forth in Section (b)(2), and as to disclosure
set forth in Section (b)(3), of Conduct Rule 2810 of the National Association of
Securities Dealers, Inc.
Section 4. Offering and Sale of Units; Closing Time.
----------------------------------------
(a) All funds debited from Subscribers' securities accounts
maintained by you will be placed promptly in the escrow account maintained by
The Bank of New York, as Escrow Agent. In the event the offering of the Units is
commenced by you and subscriptions for at least 75,000 Units shall not have been
received by the Offering Termination Date, all funds received from Subscribers
(if any) shall be returned in full and without interest or deduction of any fee
or expenses; and your agency and this Agency Agreement shall terminate without
obligation on your part or on the part of the General Partner or the
Partnership, except as provided in Section 6 hereof and except that the
indemnification provided in Section 8 hereof shall continue after such
termination of this Agency Agreement.
(b) If on or prior to the Offering Termination Date at least
75,000 Units have been subscribed for and the conditions described in Section 7
hereof are satisfied or waived and the General Partner elects to admit the
Subscribers for Units as Limited Partners of the Partnership, then, on the third
full business day (or such longer time as you and the General Partner may agree
upon) after the earlier to occur of (i) the Offering Termination Date; or (ii)
receipt of subscriptions for all 500,000 Units, payment of the purchase price
for the Units for which you have found Subscribers, and delivery, with respect
to each Subscriber for Units, of a copy of the Subscription Agreement signed by
such Subscriber, shall be made at the office of Xxxxx & Wood LLP, One World
Trade Center, New York, New York, or at such other place as shall be agreed upon
between you and the Partnership, at 10:00 A.M., New York time (the "Closing
Time"), provided, however, that, without regard to the date on which the Closing
Time occurs, you will provide the General Partner with the opportunity to review
and, in its sole discretion, to reject each Subscription Agreement not later
than 3 days after the date of such Subscription Agreement.
(c) Units may be offered to any investor who tenders the amount
of the purchase price and who makes the representation that he or she is a
Qualified Investor, as described in the Prospectus.
(d) You shall maintain for five years from the offering
Termination Date a record of any information which may be obtained by you to
indicate that each Subscriber for Units is within a permitted class of investors
under the requirements of Section 4(c).
(e) You recognize and agree that the desirability of the offering
and sale of Units to, and the purchase of Units by, Qualified Investors who are
in your employ is adequate and sufficient compensation for your services.
Section 5. Covenants of the General Partner and the Partnership. The
------------------------------------------------------
General Partner and the Partnership each covenants with you that:
(a) They will notify you immediately of, and confirm in writing
forthwith, (i) the effectiveness of the Registration Statement and any amendment
thereto, (ii) the receipt of any comments from the Commission, (iii) any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any proceedings for that
purpose. They will make every reasonable effort to prevent the issuance of any
stop order and, if any such stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) They will not file any amendments to the Registration
Statement or any amendment or supplement to the Prospectus (including a
prospectus filed pursuant to Rule 497(b) or (d) which differs from the
prospectus on file at the time the Registration Statements become effective) to
which you or your counsel shall object.
(c) They will deliver to you as many signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits) as you may reasonably request and will also deliver to you
such number of conformed copies of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) as you shall require for
the purposes contemplated by the 1933 Act and the 1940 Act.
(d) They will deliver to you from time to time, before the
Registration Statement becomes effective, such number of copies of the
preliminary prospectus as originally filed and any amended preliminary
prospectus, and as soon as the Registration Statement initially becomes
effective and thereafter from time to time during the period when the Prospectus
is required to be delivered under the 1933 Act, such number of copies of the
Prospectus (as amended or supplemented) as you may reasonably request for the
purposes contemplated by the 1933 Act or the Regulations and the 1940 Act and
such number of copies of the Subscription Agreement, Partnership Agreement and
the Certificate of Limited Partnership as you may reasonably request.
(e) During the period when the Prospectus is required to be
delivered pursuant to the 1933 Act, the Partnership and the General Partner will
comply, so far as they are able, with all requirements imposed upon them by the
1933 Act, as now and hereafter amended, and by the Regulations, as from time to
time in force, so far as necessary to permit the continuance of sales of, or
dealings in, the Units during such period in accordance with the provisions
hereof and as set forth in the Prospectus.
(f) If any event relating to or affecting the Partnership, the
General Partner, or the proposed operation of the Partnership or Investments as
described in the Prospectus shall occur as a result of which it is necessary, in
the opinion of your counsel, to amend or supplement the Prospectus in order to
make the Prospectus not misleading in the light of the circumstances existing at
the time it is delivered to a Subscriber, the Partnership and the General
Partner will forthwith prepare and furnish to you a reasonable number of copies
of an amendment or amendments of or a supplement or supplements to the
Prospectus (in form and substance satisfactory to your counsel) which will amend
or supplement the Prospectus so that, as amended or supplemented, it will not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time the Prospectus is delivered to a Subscriber,
not misleading. For the purposes of this subsection the Partnership and the
General Partner will furnish such information with respect to themselves and the
Investments as you may from time to time reasonably request.
(g) The Partnership and the General Partner will endeavor in good
faith, in cooperation with you, to qualify the sale of the Units for offering
and sale under the applicable securities or "blue sky" laws of such
jurisdictions as they may designate (provided, however, that neither the General
Partner nor the Partnership will be obligated to file any general consent to
service of process or to qualify to do business or to qualify as a securities
dealer in any jurisdiction in which they are not so qualified), and will
maintain such qualifications in effect for as long as may be required for the
distribution of the Units. In each jurisdiction where the Units shall have been
qualified as above provided, the Partnership or the General Partner will make
and file such statements and reports in each year as are or may be required by
the laws of such jurisdiction.
(h) The Partnership and the General Partner will, so long as any
Units remain outstanding, furnish directly to you the following:
(i) As soon as practicable after the end of each fiscal
year, one copy of the Partnership's annual report, including
therein the accountant's report, the balance sheet, the
related statements of profit and loss and changes in
financial position, together with such accountants' comments
and notations with respect thereto in such detail as the
Partnership may customarily receive from such accountants;
(ii) copies of any report, application or documents
which the Partnership shall file with the Commission; and
(iii) as soon as the same shall be sent to holders of
Units, each communication which shall be or is required to
be sent to the holders of Units, including any other annual
or interim report of the Partnership.
(i) They will deliver to you, from time to time, all supplemental
sales material (whether designated solely for broker-dealer use or otherwise)
proposed to be used or delivered by the Partnership in connection with the
offering of Units, prior to the use or delivery to third parties of such
material, and they will not use or deliver any such material to which you shall
object or which shall be disapproved by your counsel; provided, however, that
your failure to object shall in no event be deemed an approval of any such
material.
Section 6. Payment of Expenses and Fees.
----------------------------
(a) Whether the offering of the Units is ever commenced or, if
commenced, whether such offering is terminated for any reason or the sale of the
Units is consummated (x) the Partnership shall pay your expenses in connection
with the offering and sale of the Units, including, without limitation, your
travel expenses, overhead expenses and direct personnel costs and the fees of
your counsel; and (y) the Partnership will pay its similar expenses in
connection with the offering and sale of Units and the fees and disbursements of
its counsel and accountants. The Partnership will also pay all of (i) the
expenses (including those incurred by you or your counsel) of preparing,
printing and filing the Registration Statement and the Prospectus and all
preliminary drafts thereof and any amendments thereof or supplements thereto and
of the distribution thereof (including, without limitation, all of your mailing
and private courier expenses in connection with the distribution of the
Prospectus and the delivery or redelivery to you or the General Partner of the
Prospectus in connection with the offer and sale of the Units), (ii) the
expenses of qualifying the offers made in the Prospectus and the sales of the
Units under, or the establishment of the exemption of such offers or sales
under, the securities or "blue sky" laws of the jurisdictions to be designated
by you, including, without limitation, filing fees and the fees and
disbursements of your counsel incurred in connection therewith, (iii) in the
event that you, or you and the General Partner, enter into an escrow deposit
agreement, or similar arrangement, providing for the deposit in escrow of the
purchase price, in whole or in part, of the Units, all of the fees and expenses
in connection therewith, (iv) all accounting and legal fees and expenses and (v)
all other expenses in connection with the offering of the Units. In the event
that the organizational and offering expenses payable by the Partnership exceeds
1.5% of the proceeds of the offering, the General Partner will bear all expenses
in excess of 1.5% of such proceeds.
(b) If this Agency Agreement is cancelled by you in accordance
with the provisions of Section 7(h), the General Partner shall reimburse you for
all your out-of-pocket expenses, including the fees, disbursements and expenses
of your counsel, and you shall have no liability to the General Partner
hereunder.
Section 7. Conditions to Your Obligations. Your obligations hereunder
------------------------------
are subject to the accuracy of and compliance with the representations and
warranties of the General Partner and the Partnership; to the performance by the
General Partner and the Partnership of their respective obligations hereunder;
and to the following further conditions:
(a) The Registration Statement shall initially become effective
not later than 5:30 P.M., New York City time, not later than two business days
following the date hereof, or, with your consent, at such later time and date as
may be approved by you; at Closing Time no stop order suspending the
effectiveness thereof shall have been issued under the 1933 Act or proceeding
therefor initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to your reasonable satisfaction.
(b) At Closing Time you shall receive the opinion of Xxxxx & Xxxx
LLP, counsel for the General Partner, to the effect that the representations and
warranties of the General Partner and the Partnership in Sections 2(b), (c),
(d), (h), (i) and (k) and, to the best of such counsel's knowledge, 2(k) are, to
the extent that they are statements of law or legal conclusions, true and
correct and to the further effect that:
(i) No authorization, approval or consent of any
governmental authority or agency is necessary in connection
with the offer or sale of the Units, except such as may be
required under state or Federal securities or "blue sky"
laws and such as have already been received;
(ii) The terms and provisions of the Subscription
Agreement and the Partnership Agreement conform in all
material respects to the descriptions thereof contained in
the Prospectus;
(iii) The Partnership is duly formed and validly
existing as a limited partnership under the RULPA; and
(iv) Nothing has come to such counsel's attention that
would lead such counsel to believe that the Prospectus or
any supplemental sales material supplied to you pursuant to
Section 5(i) hereof (when read in conjunction with the
Prospectus) at the commencement of the Offering Period or at
Closing Time contained an untrue statement of a material
fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) At Closing Time the Partnership shall have received the
opinion of Xxxxx & Wood LLP, special tax counsel, dated as of the Closing Time,
substantially in the form attached as Exhibit (n)(ii) to the Registration
Statement, together with a letter stating that you may rely upon such opinion as
if it were addressed to you.
(d) At Closing Time you shall receive a survey, addressed to you
and the General Partner and the Partnership, prepared by Xxxxx & Xxxx LLP and
relating to the securities or "blue sky" laws of the jurisdictions designated by
you in accordance with the provisions of Section 5, indicating that the
appropriate "blue sky" action, if any, was taken in each of such jurisdictions.
Such survey (which shall not be understood to constitute an opinion of law) may
be based upon an examination of the statutes and regulations, if any, of such
jurisdictions as reported in standard compilations and upon interpretive advice
obtained from representatives of certain securities commissions.
(e) At the Closing Time you shall receive a certificate signed by
the President or a Vice President of the General Partner to the effect that (i)
the signer has examined the Prospectus and the supplemental sales material
supplied to you pursuant to Section 5(i) hereof and, in the signer's opinion, at
all times from the commencement of the offering Period to the Closing Time the
Prospectus and such supplemental sales literature (when read in conjunction with
the Prospectus) did not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
(ii) the representations and warranties contained in Section 2 hereof are true
and correct at the Closing Time with the same effect as though expressly made at
such Closing Time.
(f) At or prior to the Closing Time your counsel shall have been
furnished with such documents as they may reasonably require for the purpose of
enabling them to pass upon the sale of the Units being sold at the Closing Time
as herein contemplated and related proceedings and in order to evidence the
accuracy or completeness of any of the representations or warranties or the
fulfillment of any of the conditions herein contained; and all actions taken by
the General Partner or its affiliates and the Partnership in connection with the
offering and sale of such Units, as herein contemplated, shall be satisfactory
in form and substance to you and your counsel.
(g) If any of the conditions specified in this Section 7 shall
not have been fulfilled when and as required by this Agency Agreement to be
fulfilled, this Agency Agreement and all your obligations hereunder may be
cancelled by you by notifying the General Partner, in writing or by telegram, of
such cancellation, specifying the conditions which have not been fulfilled, at
any time at or prior to Closing Time, and any such cancellation shall be without
liability of any party to any other party except as otherwise provided in
Section 6 hereof.
Section 8. Indemnification.
---------------
(a) The General Partner agrees to indemnify and hold harmless
you, and each person, if any, who controls you within the meaning of Section 15
of the 1933 Act, as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever arising out of any untrue statement
or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus or any
supplemental sales material supplied to you pursuant to
Section 5(i) hereof (when read in conjunction with the
Prospectus) or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading, unless such untrue statement or
omission, or alleged untrue statement or omission, was made
in reliance upon and in conformity with written information
furnished to the General Partner by you expressly for use in
the Registration Statement, Prospectus or supplemental sales
material;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever to the extent of the aggregate amount
paid in settlement of any litigation or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such
untrue statement or omission or any such alleged untrue
statement or omission, if such settlement is effected with
the written consent of the General Partner and the
Partnership; and
(iii) against any and all expense whatsoever (including
the fees and disbursements of counsel chosen by you)
reasonably incurred in investigating, preparing or defending
against any litigation or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under clause
(i) or (ii) above. The foregoing indemnity agreement is
subject to the condition that, insofar as it relates to any
untrue statement, alleged untrue statement, omission or
alleged omission made in a preliminary prospectus or in the
Prospectus or in any supplemental sales material, it shall
not inure to your benefit or to the benefit of any person
who controls you if you failed to send or give a copy of the
Prospectus (as amended or supplemented, if the Partnership
shall have furnished any amendment or supplement thereto to
you, which shall correct such untrue statement or omission
which is the basis of the loss, liability, claim, damage or
expense for which indemnification is sought) to the person
asserting any such loss, liability, claim, damage or expense
prior to or together with any such supplemental sales
material and the written confirmation of the receipt of a
subscription for Units from such person or at such other
time as the Prospectus, as so amended or supplemented, is
required under the 1933 Act to be delivered by you to such
person. The General Partner agrees to notify you within a
reasonable time of the assertion of any claim in connection
with the sale of the Units against it or any of them, any of
their officers or directors or any of them, any of their
officers or directors or any person who controls the
Partnership or the General Partner within the meaning of
Xxxxxxx 00 xx xxx 0000 Xxx.
(x) You agree to indemnify and hold harmless the General Partner
and the Partnership and each person who controls either of them within the
meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in Section 8(a), but only with respect to
untrue statements or omissions contained in the Registration Statement or
Prospectus or any supplemental sales material supplied to you pursuant to
Section 5(i) (when read in conjunction with the Prospectus) made in reliance
upon and in conformity with written information furnished to the General Partner
by you for use in the Registration Statement, Prospectus or such supplemental
sales literature.
(c) In no case shall an indemnifying party be liable under this
indemnity agreement with respect to any claim made against an indemnified party
unless such indemnifying party shall be notified in writing (as provided in
Section 10) of the nature of the claim within a reasonable time after the
assertion thereof, but failure so to notify such indemnifying party shall not
relieve them from any liability which they may have otherwise than on account of
this indemnity agreement.
Section 9. Representations, Warranties and Agreements to Survive
----------------------------------------------------------
Closing Time. All representations, warranties and agreements contained in this
------------
Agency Agreement or contained in certificates of the General Partner or you
submitted pursuant hereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of you or any person who
controls you, or by or on behalf of the General Partner or the Partnership, and
shall survive Closing Time.
Section 10. Effective Date of this Agreement and Termination Thereof.
--------------------------------------------------------
(a) This Agreement shall become effective (i) at 5:30 P.M., New
York City time, on the day on which the Registration Statement initially became
effective, or (ii) at the time of the initial public offering by you, after the
Registration Statement initially becomes effective, of the Units, whichever
shall first occur. The time of the initial public offering shall mean the time
of the release by you, for publication, of the first newspaper advertisement
which is subsequently published, relating to the Units or the time at which the
Units are first generally offered by you to dealers or Subscribers by letter or
telegram, whichever shall first occur.
(b) You shall have the right to terminate this Agreement by
giving the notice indicated below in this Section 10 at any time at or prior to
any Closing Time (i) if there shall have been, since the respective dates of
which information is given in the Registration Statement, the Prospectus and any
supplemental sales material supplied to you pursuant to Section 5(i) hereof, any
change in the condition of the Partnership or the General Partner, financial or
otherwise, or in the earnings, business affairs, or business prospects of the
Partnership or the General Partner, whether or not arising in the ordinary
course of business, which could materially adversely affect the Partnership or
the ability of the General Partner to carry out its obligations to the
Partnership, (ii) if there shall have occurred any outbreak of hostilities or
other national or international calamity or crisis, the effect of such outbreak,
calamity or crisis on the financial markets of the United States being such as
in your judgement would make the offering or delivery of the Units
impracticable, or (iii) if trading on the New York Stock Exchange shall have
been suspended, or minimum or maximum ranges for prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been required
on such Exchange, or if a banking moratorium shall have been declared by either
Federal or New York authorities. If you terminate this Agreement as provided in
this Section 10, such termination shall be without liability of any party to any
other party except as otherwise provided in Section 6.
(c) If you elect to terminate this Agency Agreement as provided
in this Section 10, you shall promptly notify the Partnership, by telephone or
telegram, confirmed by letter.
Section 11. Notices and Authority to Act. All communications herein
-----------------------------
shall be in writing and, if sent to you, shall be mailed, delivered or
telegraphed and confirmed to you at Xxxxxxx Xxxxx World Headquarters, North
Tower, 27th floor, World Financial Center, New York, New York 10281-1327,
Attention of Xx. Xxxx X. Xxxxxxxx, or, if sent to the General Partner or the
Partnership, shall be delivered or telegraphed and confirmed to either of them
at Xxxxxxx Xxxxx World Headquarters, South Tower, 23rd floor, World Financial
Center, New York, New York 10080-6123, Attention of Xx. Xxxxxx X. Xxxxx.
Section 12. Parties. This Agency Agreement shall inure to the benefit
-------
of and be binding upon you and the General Partner and the Partnership and your
and the General Partner's and the Partnership's respective successors, this
Agency Agreement and the conditions and provisions hereof being intended to be
and being for the sole and exclusive benefit of the parties hereto and their
respective successors and controlling persons and for the benefit of no other
person, firm or corporation.
Section 13. Governing Law. This Agreement will be governed by the laws
-------------
of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement among
you, the General Partner and the Partnership.
Very truly yours,
KECALP INC.
By:__________________________________________
(Authorized Signature)
XXXXXXX XXXXX KECALP L.P. 1999
By: KECALP INC.
General Partner
By:__________________________________________
(Authorized Signature)
Confirmed and Accepted
as of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:________________________________________
(Authorized Signature)
