1
COMMUNITY INVESTMENT PARTNERS III L.P., LLLP
200,000 Units of Limited Partnership Interest
AGENCY AGREEMENT
__________ ___, 1997
XXXXXX X. XXXXX & CO., L.P.
00000 Xxxxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Dear Sirs:
CIP Management L.P., LLLP, a limited partnership organized under the laws
of the State of Missouri and registered as a limited liability limited
partnership thereunder (the "Managing General Partner"), and
Xxxxxx Xxxxx, as the initial limited partner, have caused the formation
of Community Investment Partners III L.P., LLLP (the "Partnership"), a limited
partnership organized pursuant to the Missouri Revised Uniform Limited
Partnership Act (the "Partnership Act"), and registered as a limited liability
limited partnership pursuant to the Missouri Uniform Partnership Law (the
"Partnership Law"). The managing general partner of the Managing General
Partner is CIP Management, Inc., a Missouri corporation (the "Company"). The
Partnership desires to increase the capital of the Partnership and proposes to
offer for sale up to 200,000 units of limited partnership interests in the
Partnership ("Units"). The price for each Unit is $25.00, $12.50 of which is
to be paid upon subscription and the balance of which is to be paid upon a
subsequent capital call date as more fully described in the Prospectus
(hereinafter defined). Each investor will be required to make a minimum
purchase of 100 Units ($2,500), unless otherwise required by any state
securities commission. No fractional Units will be sold. Prospective
investors subscribing to purchase Units (collectively, the "Subscribers") will
be required to execute and deliver a Subscription Qualification and Acceptance
Page to the Subscription Agreement, substantially in the form thereof attached
as exhibits 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-______), including
a preliminary prospectus, for the registration of the Units under the
Securities Act of 1933, as amended (the "1933 Act"). Such registration
statement as amended at the time it is declared effective by the Commission,
including financial statements, schedules and exhibits, and the information
deemed to be included therein pursuant to Rule 430A under the 1933 Act, is
hereafter referred to as the
2
"Registration Statement" and the final prospectus included in the Registration
Statement at that time, including the information deemed to be included therein
pursuant to Rule 430A under the 1933 Act, is hereafter 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 424(b) or (c) of the rules and
regulations (the "Regulations") of the Commission under the 1933 Act differs
from the prospectus on file at the time the Registration Statement or any
post-effective amendment thereto as the case may be, becomes effective, the
term "Prospectus" shall refer to the Rule 424(b) or (c) prospectus from and
after the time it is delivered to the Commission for filing.
SECTION 1. Representations and Warranties of the Company, the Managing
General Partner, the Management Company and the Partnership.
(a) The Partnership, the Managing General Partner and the Company each
represents, warrants and agrees with you for your benefit as follows:
(i) At the time the Registration Statement initially becomes effective
and at the time that any post-effective amendment thereto becomes
effective, the Registration Statement and the Prospectus, and at each
Closing Time referred to below, the Prospectus, will comply in all
material respects with the provisions of the 1933 Act, the Regulations
and the Investment Company Act of 1940 (the "1940 Act") and the
regulations thereunder; at the time the Registration Statement initially
becomes effective and at the time that any post-effective amendment
thereto becomes effective, the Registration Statement will not contain an
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 initially
becomes effective and at the time that any post-effective amendment
thereto becomes effective, and at each Closing Time, neither the
Prospectus nor any supplemental sales material supplied or approved in
writing by the Partnership (when read in conjunction with the Prospectus)
will 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 Managing
General Partner in writing by you expressly for use in the Registration
Statement or the Prospectus.
(ii) The Amended and Restated Agreement of Limited Partnership, which
will govern the Partnership (as such agreement may be amended from time
to time, the "Partnership Agreement"), provides for the subscription for
and sale of the Units; all action required to be taken by the General
Partners and the Partnership as a condition to the subscription for and
sale of the Units to qualified subscribers therefor has been, or prior to
each Closing Time
-2-
3
referred to below will have been taken; the Managing General Partner has
admitted as general partners of the Partnership two individuals who,
pursuant to applicable rules promulgated under the 1940 Act, will not be
"interested persons" as defined in the 1940 Act with respect to the
Partnership (the "Independent General Partners"); (the Independent
General Partners and the Managing General Partner being collectively
referred to as the "General Partners"); and upon payment of the
consideration therefor specified in the Subscription Agreement, the Units
will constitute valid limited partnership interests in the Partnership,
and each purchaser of a Unit will become a Limited Partner, subject to
the terms and conditions of the Partnership Agreement and the Partnership
Act.
(iii) The Partnership is a limited partnership duly formed under the
Partnership Agreement and registered as a limited liability limited
partnership pursuant to the Partnership Law. It is subject to the
Partnership Act, and exists under the laws of the State of Missouri with
full partnership power and authority to conduct the business in which it
is engaged or proposes to engage as described in the Prospectus; the
Partnership is or will be duly formed or qualified under the laws of each
other jurisdiction, if any, in which such formation or qualification is
necessary in order to protect the limited liability of the Limited
Partners or to enable the Partnership to conduct the business in which it
is engaged or proposes to engage as described in the Prospectus; and the
filing or recordation of such amendments or supplements to, or
certificates in each of the jurisdictions in which the Partnership
conducts or proposes to conduct business, in accordance with the
applicable laws of such jurisdictions, will not adversely affect the
validity of the formation or qualification of the Partnership, or the
Partnership's right to transact business as a limited partnership in such
other jurisdictions or its existence in good standing as a limited
partnership in every jurisdiction in which it conducts or proposes to
conduct business.
(vi) The accountants who certified the financial statements filed with
the Commission as part of the Registration Statement are, with respect to
the General Partners and the Partnership, independent public accountants
as required by the 1933 Act and the Regulations.
(v) The balance sheets filed as a part of the Registration Statement and
those included in the Prospectus present fairly the financial position of
the Partnership, the Managing General Partner and the Company as at the
dates indicated and said balance sheets have been prepared in conformity
with generally accepted accounting principles (as described therein)
applied on a consistent basis.
(vi) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be
stated in or contemplated by the Registration Statement and the
Prospectus: (A) there has not been any material adverse change in the
condition, financial or otherwise, of the Company, the Managing General
Partner or the Partnership, or in the earnings, business affairs or
business prospects of the Company, the Managing General Partner or the
Partnership, whether or
-3-
4
not arising in the ordinary course of business, (B) there have not been
any material transactions entered into by the Partnership, the Managing
General Partner or the Company other than in the ordinary course of
business, (C) there has been no distribution of any kind declared, paid
or made by the Partnership or the Managing General Partner on any class
of its partnership interests or by the Company on any class of its
capital stock, and (D) except as disclosed in the Prospectus, there has
not been any change in the partnership interests nor any increase in the
long-term indebtedness of the Partnership or the Managing General Partner
nor any change in the ownership of the partnership interests of the
Partnership or the Managing General Partner or the capital stock of the
Company.
(vii) At each Closing Time referred to below the general partners of the
Managing General Partner and the Individual General Partners (as defined
in the Partnership Agreement) will have an aggregate net worth at least
equal to 10% of the total capital contributions to the Partnership of all
of its Partners, exclusive of (i) any interest in the Partnership and any
other limited partnership in which they are partners and (ii) accounts
and notes receivable from and payable to the Partnership or any other
such limited partnership.
(viii) This Agency Agreement has been duly and validly authorized,
executed and delivered by or on behalf of the Company, the Managing
General Partner and the Partnership.
(ix) At the first Closing Time referred to below, the management
agreement (the "Management Agreement") between the Partnership and CIP
Management L.P., LLLP, in its capacity as management company (the
"Management Company"), will have been duly and validly authorized,
executed and delivered on behalf of the Partnership, will comply with the
terms and conditions of the 1940 Act and will constitute a valid, binding
and enforceable obligation of the Partnership in accordance with its
terms.
(x) The Partnership Agreement has been duly and validly authorized,
executed and delivered by or on behalf of the Managing General Partner.
(xi) The execution and delivery of this Agency Agreement, the Management
Agreement and the Partnership Agreement, the incurrence of the
obligations herein and therein set forth and the consummation of the
transactions contemplated herein, therein and in the Prospectus will not
constitute a breach of, or default under, any instrument by which either
the Company, the Managing General Partner or the Partnership is bound or
any law, order, rule or regulation of any court or any governmental body
or administrative agency having jurisdiction over the Company, a General
Partner or the Partnership which is applicable to the Company, the
Managing General Partner or the Partnership.
(xii) There is not pending, nor, to the knowledge of the Managing General
Partner or the Partnership, threatened or contemplated, any action, suit
or proceeding before or by
-4-
5
any court or other governmental body to which the Company, the Managing
General Partner, the Partnership or the Management Company is or may be a
party, which is not referred to in the Prospectus and which might result
in any material adverse change in the condition (financial or otherwise),
business or prospects of the Company, the Managing General Partner, the
Partnership or the Management Company or might materially adversely
affect any of the assets of the Company, the Managing General Partner,
the Partnership or the Management Company.
(xiii) All consents, approvals, authorizations or orders of any court or
governmental authority or agency have been obtained as required (i) for
the consummation by the Partnership of the transactions contemplated by
this Agency Agreement, except those consents or approvals as may be
required under the 1933 Act, the Regulations, the 1940 Act or the
regulations thereunder or state securities or blue sky laws; or, (ii)
except as disclosed in the Prospectus, for the Partnership to conduct its
business as contemplated in the Prospectus.
(xiv) The Partnership has elected to be regulated as a business
development company under the 1940 Act and has filed all statements and
other documents with the Commission in connection with such election
which are required by the 1940 Act, the Securities Exchange Act of 1934
and the rules and regulations thereunder; such election has not been
withdrawn by the Partnership pursuant to Section 54(c) of the 1940 Act;
the Partnership does not fail to meet any currently applicable
requirements for it to be a business development company; the Partnership
will, at each Closing Time as referred to below, meet all then applicable
requirements for it to be a business development company; the Commission
has not issued any order pursuant to Section 54(c) of the 1940 Act
revoking such election or, to the best of their knowledge and
information, instituted proceedings to issue such an order; there are no
contracts or documents of the Partnership which are required to be filed
as exhibits to the Registration Statement by the 1933 Act, by the
Regulations, or by the 1940 Act or the regulations thereunder that have
not been so filed.
(b) The Managing General Partner represents, warrants and agrees with
you for your benefit as follows:
(i) On the date hereof it is, and at all times through the Last
Closing Time referred to below, will be, duly formed and validly existing
as a limited partnership registered as a limited liability limited
partnership under the laws of the State of Missouri with full partnership
power and authority to act as Managing General Partner of the
Partnership, and is or will be duly formed or qualified in each other
jurisdiction in which its action as Managing General Partner of the
Partnership as described in the Prospectus, (i) requires such
qualification or (ii) may require such qualification if the failure to so
qualify might result in material adverse consequences to the Partnership,
and is not prohibited from acting as the Managing General Partner or the
Management Company to the Partnership as contemplated in the Prospectus.
-5-
6
(ii) The Management Agreement has been fully and validly authorized,
executed and delivered on behalf of the Management Company and
constitutes a valid, binding and enforceable obligation of the Management
Company in accordance with its terms. The execution and delivery of this
Agency Agreement and the Management Agreement, the incurrence of the
obligations herein and therein set forth and the consummation of the
transactions contemplated herein, therein and in the Prospectus will not
constitute a breach of, or default under, any instrument by which the
Management Company is bound or any law, order, rule or regulation
applicable to the Management Company of any court or any governmental
body or administrative agency having jurisdiction over the Management
Company.
(c) The Company represents, warrants and agrees with you for your
benefit that it is a corporation duly organized, validly existing and in good
standing under the laws of the State of Missouri with full corporate power and
authority to act as the general partner of the Managing General Partner.
(d) For purposes of this Agreement, any certificate signed by the
Managing General Partner and delivered to you shall be deemed a representation
and warranty by such Managing General Partner and the Partnership to you as to
the matters covered thereby. For purposes of subsections (b) and (c),
respectively, of this Section 1, any certificate signed by the Managing General
Partner, the Management Company or the Company, respectively, and delivered to
you shall be deemed a representation and warranty of such Managing General
Partner, Management Company or Company, respectively.
SECTION 2. Offering and Sale of Units--Closing Time and Admission Dates.
(a) 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 Selling Agent of the Partnership during the
term herein specified (the "Offering Period") for the purpose of finding
acceptable Subscribers for the Units for the account and risk of the
Partnership through a public offering.
Subject to the performance by the Company, the Managing General
Partner and the Partnership of all of their obligations to be performed
hereunder, and to the completeness and accuracy of all 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 Subscribers for the Units at a public offering price of
$25.00 per Unit, each Subscriber being required to subscribe for at least 100
Units, unless otherwise required by any state securities commission. You
hereby agree to instruct Subscribers to make checks for the purchase of Units
payable to "ChaseMellon Shareholder Services, L.L.C./CIP III - Escrow Account"
and in accordance with the Escrow Deposit Agreement dated ____________ ____,
1997 by and among you, ChaseMellon Shareholder Services, L.L.C. and the
Partnership, you agree to transfer such checks to the Escrow Agent by noon of
the next business day following receipt. Your agency hereunder, which is
coupled with an interest and, therefore, is not
-6-
7
terminable by the Partnership without your permission, shall continue until not
later than March 31, 1998.
You hereby confirm that you are aware of your obligation to
participate in a public offering of a direct participation program only if (1)
standards of suitability have been established and are disclosed to investors
which are consistent with the provisions of Rule 2810 of the Rules of Conduct
of the NASD ("Rule 2810") and all Subscribers are informed of all
pertinent facts relating to the liquidity and marketability of the Units, and
no subscriptions for Units in a discretionary account shall be made without the
Subscriber's prior written approval; (2) you have reasonable grounds to believe
that all material facts (based upon information obtained and due diligence
activities performed) are adequately and accurately disclosed and provide a
basis for evaluating the program (including the items of disclosure set forth
in Section (b)(3) of Rule 2810); and (3) the organization and offering expenses
reimbursed by the program are fair and reasonable, taking into account all
relevant factors (and in all events are not per se unreasonable in accordance
with the provisions of Section (b)(4) of Rule 2810.
(b) In the event the offering is commenced and acceptable subscriptions
for at least 40,000 Units shall not have been received by the Offering
Termination Date, all funds received from Subscribers (if any) shall be
returned in full, together with, except as set forth in the Prospectus, any
interest actually earned thereon and without deduction of any escrow or other
fee or expenses; and your agency and this Agency Agreement shall terminate
without obligation on your part or on the part of the Managing General Partner
or the Partnership, except as provided in Section 4 hereof. The Company, the
Managing General Partner or the Management Company may subscribe for Units (but
such subscriptions shall not be counted to satisfy the 40,000 Unit minimum) on
the same terms and conditions as other investors. Any such Units purchased by
the Company, the Managing General Partner or the Management Company will be
purchased for investment.
(c) At the Offering Termination Date or at such earlier time as may be
agreed upon by you and the Partnership, if at least 40,000 Units shall have
been properly subscribed for or at such earlier time as all the Units shall
have been properly subscribed for, you shall notify the Managing General
Partner of the aggregate number of Units for which you have received
subscriptions, and then shall deliver payment of the purchase price for the
Units for which you have found subscribers, and, with respect to each
subscriber for Units, deliver a copy of the Subscription Agreement signed by or
on behalf of such Subscriber (including the Subscription Qualification and
Acceptance Page with respect to each Subscriber, which may be accompanied by a
Subscription Qualification and Acceptance Page which has attached thereto a
listing of those Subscribers to which it relates), to the Partnership at the
office of the Management Company, 00000 Xxxxxxxxxx Xxxx, Xx. Xxxxx, Xxxxxxxx
00000, or at such other place as shall be agreed upon between you and the
Partnership, at 10:00 a.m. St. Louis Time, on or before October 30, 1997,
as may be extended by the Managing General Partner in its discretion up to or
until March 31, 1998, the date agreed upon by you and the Partnership
as the date for the initial Closing (a "Closing Time"). Thereafter an
additional closing may take place as of such date as may be agreed upon between
you and the Managing General Partner not later
-7-
8
than March 31, 1998. The Closing Time for the last Units purchased by
subscribers is referred to herein as the "Last Closing Time." Without regard
to the date on which each Closing Time occurs, you will provide the Managing
General Partner with the opportunity to review and, in its sole discretion, to
reject each Subscription Agreement not later than ten days after the date of
such Subscription Agreement or otherwise promptly after receipt by the Managing
General Partner.
(d) You shall maintain for six years from the Offering Termination
Date a record of any information that may be obtained by you to indicate that
each Subscriber for Units is within the permitted class of investors.
(e) You will receive no compensation for your services and will not be
reimbursed for any marketing or sales expenses.
(f) None of you, the Partnership or any General Partner shall,
directly or indirectly, pay or award any finder's fees, commissions or other
compensation to any person engaged by a potential investor for investment
advice as an inducement to such advisor to advise the purchase of Units.
SECTION 3. Covenants of the Company, the Managing General Partner
and the Partnership. The Partnership, the Managing General Partner and the
Company each covenant with you as follows:
(a) They will notify you immediately (i) when the Registration
Statement and any amendment thereto shall have become effective, (ii) of the
receipt of any comments from the Commission with respect to the Registration
Statement, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information relating thereto, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the issuance by the Commission of any order pursuant to Section 54(c) of the
1940 Act, or of any proceedings for these purposes, and (v) of the acquisition
of any investments acquired after the initial effective date of the
Registration Statement and prior to each Closing Time. The Company, the
Managing General Partner and the Partnership will make every reasonable effort
to prevent the issuance by the Commission of any stop order and, if any such
stop order shall at any time be 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 424(b) which differs from the prospectus on file at the time
the Registration Statement becomes effective) to which you or your counsel
reasonably object.
(c) They will deliver to you, as soon as available, two signed copies
of the Registration Statement as originally filed and of each amendment thereto
and two sets of exhibits thereto, and will also deliver to you such number of
conformed copies of the Registration
-8-
9
Statement as originally filed and of each amendment thereto (without exhibits)
as you shall require for the purposes contemplated by the 1933 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.
(e) During the period when the Prospectus is required to be delivered
pursuant to the 1933 Act, the Company, the Managing General Partner and the
Partnership will comply, so far as they are able and at their own expense, 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 Company, the Managing
General Partner, the Partnership or the Management Company 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
light of the circumstances existing at the time it is delivered to a
subscriber, the Company, the Managing General Partner and the Partnership will
forthwith prepare and furnish to you, without expense 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, in the opinion
of your counsel, as amended or supplemented, 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
existing at the time the Prospectus is delivered to a subscriber, not
misleading.
(g) The Company, the Managing General Partner and the Partnership will
endeavor in good faith, in cooperation with you, to qualify the Units for
offering and sale under the applicable securities or "blue sky" laws of such
jurisdictions as you may designate; provided, however, that neither the Company
nor the Managing General Partner nor the Partnership shall be obligated to file
any general consent to service of process or to qualify to do business or to
qualify as a dealer in securities in any jurisdiction in which they are not so
qualified. In each jurisdiction where the Units shall have been qualified as
above provided, the Company, the Managing General Partner and the Partnership
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 Managing General Partner and the Partnership will use its
best efforts to make generally available to holders of Units within
120 days after the close of the period covered thereby, an earnings statement
of the Partnership that satisfies the provisions
-9-
10
of Section 11(a) of the 1933 Act and Rule 158 thereunder, which need not be
certified by independent public accountants unless required by the 1933 Act or
the Regulations.
(i) They 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
accountants' report, the balance sheet, the related statements of profit
and loss and changes in financial position for the Partnership (which
need not be audited), together with such accountants' comments and
notations with respect thereto in such detail as the Partnership may
customarily receive from such accountants, and any other tax related
information reasonably requested by you including, but not limited to,
such information which in your discretion is necessary to be provided to
investors whose tax exempt accounts are held with you;
(ii) as soon as practicable after the end of each fiscal quarterly
period, one copy of a balance sheet of the Partnership as of the end of
such period, setting forth in reasonable detail its financial position,
together with related statements of profit and loss, none of which
statements need be audited, but shall be certified as correct by the
Managing General Partner of the Partnership;
(iii) as soon as the same shall be filed with the Commission, copies
of any report, application or documents which the Partnership shall file
with the Commission; and
(iv) as soon as the same shall be sent to holders of Units, each
communication which shall be sent to the holders of Units, including any
other annual or interim report of the Partnership.
In addition, you shall be granted timely the same rights to
review the books and records of the Partnership as granted to a Limited Partner
pursuant to the Partnership Agreement.
(j) The Managing General Partner and the Partnership will deliver to
you, from time to time, all supplemental sales material (whether designated
only for broker-dealer use or otherwise, whether written 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.
(k) The Partnership will file with the Commission such reports on
Form SR as may be required pursuant to Rule 463 under the 1933 Act.
SECTION 4. Payment of Expenses and Fees.
-10-
11
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, you 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. The
Managing General Partner (on behalf of the Partnership) or the Partnership will
pay all expenses incident to the performance of the obligations of the Managing
General Partner and of the Partnership under this Agency Agreement, including
(i) the printing and delivery to you in quantities as hereinabove stated of
copies of the Registration Statement and all amendments thereto, of a
preliminary prospectus and any amended preliminary prospectus of the
Registration Statement and any amendments thereto, of the Prospectus and any
supplements or amendments thereto; (ii) the printing and filing of the
Registration Statement and the Prospectus; (iii) the printing, execution,
filing and delivery to you in quantities as hereinabove stated of copies of the
Partnership Agreement and all amendments or supplements thereto; (iv) the
qualification of the Units under the securities or "blue sky" laws of the
jurisdictions designated by you in accordance with the provisions of Section
3(g), including filing fees and the fees and disbursements of counsel incurred
in connection therewith; (v) the fees and disbursements of counsel and
accountants for the Managing General Partner and the Partnership; (vi) the
filing fee of the National Association of Securities Dealers, Inc.; (vii) the
preparation and delivery to you of such number of copies as you may reasonably
request for the Blue Sky Survey; (viii) the fees and expenses incurred in
connection with any escrow deposit or similar arrangements entered into with
respect to the transactions contemplated hereby; and (ix) the printing and
delivery costs relating to any sales brochure for prospective investors
approved by the Partnership.
SECTION 5. Conditions of Your Obligations. Your obligations
hereunder are subject to the accuracy of and compliance with the
representations and warranties of the Company, the Managing General Partner,
the Partnership and the Management Company, to the performance by the Company,
the Managing General Partner and the Partnership of their obligations hereunder
and to the following further conditions:
(a) The Registration Statement shall initially become effective not
later than 4:00 p.m. St. Louis Time, on the date hereof, or, with your consent,
at a later time and date not later, however, than 4:00 p.m. St. Louis Time, on
the day following the date hereof, or at such later time and date as may be
approved by you; and at each 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.
(b) At each Closing Time you shall receive the favorable opinion of
Xxxxx Xxxx LLP to the effect that:
(i) The Partnership Agreement provides for the subscription for and sale
of the Units; all action required to be taken by the Managing General
Partner and the Partnership as a condition to the subscription for and
sale of the Units to qualified subscribers therefor has been taken; and,
upon the payment of the consideration therefor specified in the
Subscription Agreements, the Units will constitute valid limited
partnership interests in the Partnership, as to which, subject to the
qualifications set forth in such opinion, the
-11-
12
subscribers thereto, as Limited Partners of the Partnership, will have no
liability in connection with the affairs of the Partnership in excess of
their respective capital contributions to the Partnership and their share
of the Partnership's assets and undistributed profits (subject to the
obligation of a Limited Partner to repay (1) for a period of six years
after the receipt of any part of his capital contribution wrongfully
returned to him, the amount of his contribution wrongfully returned, and
(2) 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 such capital
contribution was held by the Partnership) and the subscribers will be
Limited Partners of the Partnership entitled to all the benefits of
Limited Partners under the Partnership Agreement and the Missouri Revised
Uniform Limited Partnership Act.
(ii) The Partnership is a limited partnership registered as a limited
liability limited partnership duly formed and validly existing under the
laws of the State of Missouri with full partnership power and authority
to conduct in all material respects the business in which it is engaged
or proposes to engage as described in the Prospectus.
(iii) The Managing General Partner is duly formed and validly existing as
a limited partnership registered as a limited liability limited
partnership under the laws of the State of Missouri with full partnership
power and authority to act as Managing General Partner of the Partnership
at each Closing Time and is not prohibited from acting as the Managing
General Partner or the Management Company to the Partnership as
contemplated in the Prospectus.
(iv) The Company is a corporation duly incorporated and validly existing
under the laws of the State of Missouri with full corporate power and
authority to act as the general partner of the Managing General Partner.
(v) This Agency Agreement has been duly and validly authorized, executed
and delivered by or on behalf of the Company, the Managing General
Partner and the Partnership.
(vi) The Partnership Agreement has been duly and validly authorized,
executed and delivered by or on behalf of the Managing General Partner.
(vii) The Management Agreement has been duly and validly authorized,
executed and delivered by or on behalf of the Partnership and the
Management Company.
(viii) The execution and delivery of this Agency Agreement, the
Management Agreement and the Partnership Agreement, the incurrence of the
obligations herein and therein set forth and the consummation of the
transactions contemplated herein, therein and in the Prospectus will not
constitute a breach of, or default under, any instrument known to such
counsel by which the Company, the Managing General Partner, the
Management Company or the Partnership is bound or, to the best of such
counsel's
-12-
13
knowledge and information, any Missouri or United States law, order, rule
or regulation applicable to the Company, the Managing General Partner,
the Partnership or the Management Company of any court or any Missouri or
United States governmental body or administrative agency having
jurisdiction over the Company, the Managing General Partner, the
Management Company or the Partnership, except as any indemnification or
contribution provisions contained therein may be limited by law.
(ix) To the best of such counsel's knowledge, there is not pending,
threatened or contemplated any action, suit or proceeding before or by
any court or other governmental body to which the Company, the Managing
General Partner, the Management Company or the Partnership is or may be a
party, that is not referred to in the Prospectus and that might result in
any material adverse change in the condition (financial or otherwise),
business or prospects of the Company, the Managing General Partner, the
Management Company or the Partnership or might materially adversely
affect any of the assets of the Partnership.
(x) All consents, approvals, authorizations or orders of any Missouri or
United States court or governmental authority or agency have been
obtained as required for the consummation by the Partnership of the
transactions contemplated by this Agency Agreement and for the
Partnership to conduct in all material respects its business as
contemplated in the Prospectus, except those consents or approvals as may
be required under the 1933 Act, the Regulations, the Investment Advisers
Act, the regulations thereunder, the 1940 Act or the regulations
thereunder or state securities or blue sky laws.
(xi) The terms and provisions of the Partnership Agreement conform in all
material respects to descriptions thereof contained in the Prospectus
under the caption "Summary of the Partnership Agreement."
(xii) The Registration Statement is effective under the 1933 Act and, to
the best of such counsel's knowledge, no proceedings for a stop order are
pending or threatened under Section 8(d) of the 1933 Act.
(xiii) At the time the Registration Statement initially became effective
and at the time any post-effective amendment thereto became effective,
the Registration Statement and the Prospectus (other than the financial
statements and related schedules and other financial and statistical data
included therein, as to which no opinion need be rendered) complied as to
form in all materials respects with the requirements of the 1933 Act and
the Regulations thereunder.
(xiv) To the best of such counsel's knowledge, there are no contracts,
indentures, mortgages, loan agreements, leases or other documents of a
character required to be described or referred to in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed as
exhibits thereto.
-13-
14
(xv) The Partnership has elected to be regulated as a business
development company under the 1940 Act and has filed all statements and
other documents with the Commission in connection with such election
which are required by the 1940 Act, the Securities Exchange Act of 1934
and the Rules and Regulations thereunder; such election has not been
withdrawn by the Partnership pursuant to Section 54(c) of the 1940 Act;
the Partnership does not fail to meet any currently applicable
requirements for it to be a business development company; the Commission
has not issued any order pursuant to Section 54(c) of the 1940 Act
revoking such election or, to the best of their knowledge, instituted
proceedings to issue such an order.
In addition, such counsel shall state that although they are not
passing upon, and do not assume responsibility for the accuracy, completeness or
fairness of, any portion of the Registration Statement and the Prospectus, as
amended or supplemented, they have participated in the preparation of the
Registration Statement and the Prospectus, including conferences with officials
and other representatives of the Partnership, with Price Waterhouse LLP the
independent accountants of the Partnership, and with your representatives, and
are generally familiar with the affairs of the Partnership, and nothing has
come to their attention that causes them to believe that, as of the time of the
effectiveness of the Registration Statement, the Registration Statement, but
excluding the financial statements and related schedules, other financial data
and statistical information included therein and other portions thereof
included upon the authority of experts and any such statements, reports or
information omitted therefrom, as to which they express no opinion, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that, as of such Closing Time, either the Registration Statement
or the Prospectus, or any such further amendment or supplement thereto, in each
case other than the financial statements and related schedules, other financial
data and statistical information included therein and other portions thereof
included upon the authority of experts and any such statements, reports or
information omitted therefrom, as to which they express no opinion, contains an
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials.
(c) At each Closing Time, you shall receive the opinion of Xxxxx Xxxx
LLP, tax counsel, to the effect that:
(i) The discussion of income tax aspects contained in the
Prospectus under the captions "Risk and Other Important Factors--Federal
Income Tax and "Taxation" is an accurate description of the material
federal income tax aspects of an investment in the Partnership;
(ii) The Partnership will be classified as a partnership for
federal income tax purposes pursuant to Code Section 7701;
-14-
15
(iii) The Partnership should not be treated as a "publicly-traded
partnership" as defined in Code Section 7704; and
(iv) The allocations of profits and losses for tax purposes in the
Partnership Agreement more likely than not are in accordance with the
Partners' interests in the Partnership.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials.
(d) At each Closing Time you shall receive a certificate signed by the
Company on behalf of itself, the Managing General Partner and the Partnership
to the effect that (i) the signer has carefully examined the Partnership
Agreement, the Registration Statement, the Prospectus and the supplemental
sales literature and, in the signer's opinion, at the time when the
Registration Statement initially became effective, at the time any
post-effective amendment thereto became effective and at each Closing Time, as
the case may be, the Registration Statement did not contain an 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 the
Prospectus and any supplemental sales material supplied or approved in writing
by the Partnership (when read in conjunction with the Prospectus, whether
intended solely for broker-dealer use or otherwise and whether written or
otherwise) 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; (ii)
since the initial effective date of the Registration Statement no event has
occurred which should have been set forth in an amendment of, or supplement to,
the Prospectus, but which has not been so set forth; (iii) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings therefor have been instituted or, to the best of their
knowledge, threatened by the Commission; and (iv) the representations and
warranties contained in Section 1(a) are true and correct with the same effect
as though expressly made at Closing Time.
(e) Prior to each Closing Time if any investments are made or
commitments entered into with respect thereto after the initial effectiveness
of the Registration Statement, you shall be provided such financial information
and, if any portion of such financial information has been audited, accountants'
letters, relating to such additional investments, in such form and content as
you may reasonably request.
If any of the conditions specified in this Section 5 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 canceled by you
by notifying the Partnership and the Managing General Partner of such
cancellation in writing at any time at or prior to each Closing Time,
specifying the conditions that have not been satisfied, and any such
cancellation or
-15-
16
termination shall be without liability of any party to any other party except
as otherwise provided in Section 4 hereof.
SECTION 6. Indemnification.
(a) The Partnership 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 (including reasonable attorneys' fees) arising out of a breach
of any representation, warranty or covenant hereunder, or any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or any supplemental sales material
supplied or approved in writing by the Partnership, provided that such
supplemental sales material is delivered along with a 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 (A) such untrue
statement or omission or such alleged untrue statement or omission was
made in reliance upon and in conformity with written information
furnished to the Partnership by you expressly for use in the Registration
Statement (or any amendment thereto) or a preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or (B) such untrue
statement or omission or alleged untrue statement or omission was
contained in any preliminary prospectus or the Prospectus and corrected
in the Prospectus or an amended or supplemented Prospectus and you failed
to deliver a copy of the Prospectus or the amended or supplemented
Prospectus, as the case may be, to the person incurring the loss,
liability, claim, damage or expense;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever (including reasonable attorneys' fees) to the extent of the
aggregate amount paid in settlement of any litigation (including any
governmental investigation or proceeding), commenced or threatened, or of
any claim whatsoever based upon any such breach of a representation,
warranty or covenant hereunder, or 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 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 (including
any governmental investigation or proceeding), commenced or threatened,
or any claim whatsoever based upon any such breach of a representation,
warranty or covenant hereunder or any such untrue statement
-16-
17
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under subparagraph (i) or (ii)
above.
(b) The Managing General Partner and the Partnership each agrees to
indemnify and hold harmless you and each person, if any, who controls you, to
the same extent as the foregoing indemnity and subject to the same
qualifications set forth in clauses (i), (ii) and (iii) above, against any and
all loss, liability, claim, damage and expense whatsoever (including reasonable
attorneys' fees) directly arising out of the exercise by any person of any
right under the 1933 Act or the Securities Exchange Act of 1934 or the
securities or "blue sky" laws of any state on account of violations by the
Managing General Partner or the Partnership of the representations and
warranties of the Managing General Partner or the Partnership set forth in
Section 1.
(c) You agree to indemnify and hold harmless the Partnership, its
General Partners, the Management Company, the Company, each of the Company's
officers, and each person, if any, who controls the Partnership within the
meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a) of this Section (including reasonable attorneys' fees), but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Partnership by you expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(d) Notwithstanding the foregoing subsection (a) of this section,
neither you nor any person, if any, who controls you within the meaning of
Section 15 of the 1933 Act shall be indemnified by the Partnership for any
losses, liabilities or expenses arising from or out of an alleged violation of
Federal or state securities laws unless (i) there has been a successful
adjudication on the merits of each count involving alleged securities law
violations as to the particular indemnitee, provided that a court approves
indemnification of litigation costs; (ii) such claims have been dismissed with
prejudice on the merits by a court of competent jurisdiction as to the
particular indemnitee, provided that a court approves the proposed
indemnification; or (iii) in the case of a settlement of the claims against a
particular indemnitee without a court ruling, a court, after having been
informed in writing of the terms of the proposed indemnification and of the
opinion of the Securities and Exchange Commission with respect to such
indemnification, finds that indemnification of the settlement and related costs
should be made.
(e) Each indemnified party shall give prompt written notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement. An indemnifying party may participate
at its own expense in the defense of such action. If it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with
-17-
18
any other indemnifying parties receiving such notice, may assume the defense of
such action with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to
them which are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. In no event shall the indemnifying parties be liable for the fees
and expenses of more than one counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
(f) You or any person who controls you within the meaning of Section
15 of the Securities Act of 1933 will apprise a court of the position of the
Securities and Exchange Commission with respect to such indemnification before
seeking court approval for indemnification.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unavailable to you in accordance with
its terms, the Partnership on the one hand, and you, on the other hand, shall
contribute to the aggregate loss, liability, claim, damage and expense
(including reasonable attorneys' fees) of the nature contemplated by said
indemnity agreement the portion that you are responsible for, such portion
represented by your relative monetary benefit from the offering; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls you within the
meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as you, and each General Partner of the Partnership, the
Management Company, the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Partnership
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Partnership.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agency Agreement or contained in certificates of the Company, the Managing
General Partner or of the Partnership 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 Partnership, the Managing General Partner, or the Company, and shall
survive the Last Closing Time.
SECTION 9. Termination of this Agency Agreement.
(a) You shall have the right to terminate this Agency Agreement by
giving the notice indicated below in this Section 9 at any time at or prior to
the Last Closing Time (i) if there shall have been, since the respective dates
as of which information is given in the
-18-
19
Registration Statement and the Prospectus, any material adverse change in the
condition of the Partnership, the Management Company, the Company or the
Managing General Partner, financial or otherwise, or in the earnings, affairs
or business prospects of the Partnership, the Management Company, the Company
or the Managing General Partner, whether or not arising in the ordinary course
of business, which could materially adversely affect the Partnership or the
ability of the Management Company, the Company or the Managing 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 judgment 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
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 or Missouri
authorities. If you terminate this Agency Agreement as provided in this
Section 9, such termination shall be without liability of any party to any
other party except as otherwise provided in Section 4 and liabilities which
survive an earlier Closing Time.
(b) If you elect to terminate this Agency Agreement as provided in
this Section 9, the Partnership and the Managing General Partner shall be
notified promptly by you in writing.
SECTION 10. Post-Effective Amendment. The Partnership and the
Managing General Partner represent and warrant to you that, if at the Offering
Termination Date subscriptions for at least 40,000 Units shall not have been
received, they will file a post-effective amendment to the Registration
Statement de-registering all of the Units and if at the Offering Termination
Date subscriptions for all 200,000 Units shall not have been received, they
will file a post-effective amendment to the Registration Statement
de-registering the unsold Units and, in either case, will terminate any
additional offerings of Units pursuant to such Registration Statement. In
addition, the Partnership and the Managing General Partner represent and
warrant to you that they will file all reports required by the Regulations with
regard to sales of the Units and use of the proceeds therefrom.
SECTION 11. Applicable Law. This Agency Agreement shall be
construed in accordance with the laws of the State of Missouri.
SECTION 12. Parties. This Agency Agreement shall inure to the
benefit of and be binding upon you, the Partnership, the Managing General
Partner, in its capacity as the Managing General Partner and as the Management
Company, and the Company, and your, the Partnership's, the Managing General
Partner's, the Management Company's and the Company'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. No purchaser of Units from you will be
deemed a successor because of such purchase.
-19-
20
SECTION 13. 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 00000 Xxxxxxxxxx Xxxx, Xx. Xxxxx, Xxxxxxxx
00000, or, if sent to the Company, the Managing General Partner or the
Partnership, shall be delivered or telegraphed and confirmed to either of them
at 00000 Xxxxxxxxxx Xxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention of Xxxxxx X.
Xxxxxxxxx.
SECTION 14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-20-
21
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 Partnership, the Managing General Partner, the Management Company and
the Company in accordance with its terms.
Very truly yours,
COMMUNITY INVESTMENT PARTNERS III L.P., LLLP
By: CIP MANAGEMENT L.P., LLLP, its Managing General
Partner
By: CIP MANAGEMENT, INC., its managing general
partner
By:
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
CIP MANAGEMENT L.P., LLLP, in its capacities as the Managing
General Partner and the Management Company
By: CIP MANAGEMENT, INC., its managing general partner
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
CIP MANAGEMENT, INC.
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
XXXXXX X. XXXXX & CO., L.P.
Confirmed and accepted as of
the date first above written:
By
-----------------------
Authorized Signatory
-21-
