EXHIBIT 1.1
DEALER MANAGER DISTRIBUTION AGREEMENT
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP
Up to 44,000,000 Units of Limited Partnership Interest/$440.0 million
January ___, 2003
Behringer Securities LP
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Behringer Harvard Advisors I LP, a Texas limited partnership, and
Xxxxxx X. Xxxxxxxxx, as the general partners (the "General Partners") of
Behringer Harvard Mid-Term Value Enhancement Fund I LP, a Texas limited
partnership (the "Partnership"), propose that the Partnership issue and sell up
to 44,000,000 units of limited partnership interest ("Units") in the
Partnership for $10.00 per Unit, including 40,000,000 Units to be offered to
the public and 4,000,000 Units to be offered pursuant to the Partnership's
distribution reinvestment plan. There shall be a minimum purchase by any one
person of 100 Units (except as otherwise indicated in the Prospectus (as
defined in Section 1.1 hereof) or in any letter or memorandum from the
Partnership to Behringer Securities LP (the "Dealer Manager")). Terms not
defined herein shall have the same meaning as in the Prospectus. In connection
therewith, the Partnership hereby agrees with you, the Dealer Manager, as
follows:
1. Representations and Warranties of the Partnership
The Partnership represents and warrants to the Dealer Manager and each
dealer with whom the Dealer Manager has entered into or will enter into a
Selected Dealer Agreement in the form attached to this Agreement as Exhibit A
(said dealers being hereinafter called the "Dealers") that:
1.1 A registration statement with respect to the Partnership has
been prepared by the Partnership in accordance with applicable requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the
applicable rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "SEC") promulgated thereunder, covering
the Units. Such registration statement, which includes a preliminary
prospectus, was initially filed with the SEC on or about September 27, 2002.
Copies of such registration statement and each amendment thereto have been or
will be delivered to the Dealer Manager. (The registration statement and
prospectus contained therein, as finally amended and revised at the effective
date of the registration statement, are respectively hereinafter referred to as
the "Registration Statement" and the "Prospectus," except that if the
Prospectus first filed by the Partnership pursuant to Rule 424(b) under the
Securities Act shall differ from the Prospectus, the term "Prospectus" shall
also include the Prospectus filed pursuant to Rule 424(b).)
1.2 The Partnership has been duly and validly organized and
formed as a limited partnership under the laws of the state of Texas, with the
power and authority to conduct its business as described in the Prospectus.
1.3 The Registration Statement and Prospectus comply with the
Securities Act and the Rules and Regulations and do not contain any untrue
statements of material facts or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; provided, however, that the foregoing provisions of
this Section 1.3 will not extend to such statements contained in or omitted
from the Registration Statement or Prospectus as are primarily within the
knowledge of the Dealer Manager or any of the Dealers and are based upon
information furnished by the Dealer Manager in writing to the Partnership
specifically for inclusion therein.
1.4 The Partnership intends to use the funds received from the
sale of the Units as set forth in the Prospectus.
1.5 No consent, approval, authorization or other order of any
governmental authority is required in connection with the execution or delivery
by the Partnership of this Agreement or the issuance and sale by the
Partnership of the Units, except such as may be required under the Securities
Act or applicable state securities laws.
1.6 There are no actions, suits or proceedings pending or to the
knowledge of the Partnership, threatened against the Partnership at law or in
equity or before or by any federal or state commission, regulatory body or
administrative agency or other governmental body, domestic or foreign, which
will have a material adverse effect on the business or property of the
Partnership.
1.7 The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated and compliance with the
terms of this Agreement by the Partnership will not conflict with or constitute
a default under any charter, bylaw, indenture, mortgage, deed of trust, lease,
rule, regulation, writ, injunction or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Partnership, except to the extent that the enforceability of the indemnity
and/or contribution provisions contained in Section 4 of this Agreement may be
limited under applicable securities laws.
1.8 The Partnership has full legal right, power and authority to
enter into this Agreement and to perform the transactions contemplated hereby,
except to the extent that the enforceability of the indemnity and/or
contribution provisions contained in Section 4 of this Agreement may be limited
under applicable securities laws.
1.9 At the time of the issuance of the Units, the Units will have
been duly authorized and validly issued, and upon payment therefor, will be
fully paid and nonassessable and will conform to the description thereof
contained in the Prospectus, subject to the requirement that the limited
partners do not participate in the management or control of the business of the
Partnership.
2. Covenants of the Partnership
The Partnership covenants and agrees with the Dealer Manager that:
2.1 It will, at no expense to the Dealer Manager, furnish the
Dealer Manager with such number of printed copies of the Registration
Statement, including all amendments and exhibits thereto, as the Dealer Manager
may reasonably request. It will similarly furnish to the Dealer Manager and
others designated by the Dealer Manager as many copies as the Dealer Manager
may reasonably request in connection with the offering of the Units of: (a) the
Prospectus in preliminary and final form and every form of supplemental or
amended prospectus; (b) this Agreement; and (c) any other printed sales
literature or other materials (provided that the use of said sales literature
and other materials has been first approved for use by the Partnership and all
appropriate regulatory agencies).
2.2 It will furnish such proper information and execute and file
such documents as may be necessary for the Partnership to qualify the Units for
offer and sale under the securities laws of such jurisdictions as the Dealer
Manager may reasonably designate and will file and make in each year such
2
statements and reports as may be required. The Partnership will furnish to the
Dealer Manager a copy of such papers filed by the Partnership in connection
with any such qualification.
2.3 It will: (a) use its best efforts to cause the Registration
Statement to become effective; (b) furnish copies of any proposed amendment or
supplement of the Registration Statement or Prospectus to the Dealer Manager;
(c) file every amendment or supplement to the Registration Statement or the
Prospectus that may be required by the SEC; and (d) if at any time the SEC
shall issue any stop order suspending the effectiveness of the Registration
Statement, it will use its best efforts to obtain the lifting of such order at
the earliest possible time.
2.4 If at any time when a Prospectus is required to be delivered
under the Securities Act any event occurs as a result of which, in the opinion
of either the Partnership or the Dealer Manager, the Prospectus or any other
prospectus then in effect would include an untrue statement of a material fact
or, in view of the circumstances under which they were made, omit to state any
material fact necessary to make the statements therein not misleading, the
Partnership will promptly notify the Dealer Manager thereof (unless the
information shall have been received from the Dealer Manager) and will effect
the preparation of an amended or supplemental prospectus which will correct
such statement or omission. The Partnership will then promptly prepare such
amended or supplemental prospectus or prospectuses as may be necessary to
comply with the requirements of Section 10 of the Securities Act.
3. Obligations and Compensation of Dealer Manager
3.1 The Partnership hereby appoints the Dealer Manager as its
agent and principal distributor for the purpose of selling for cash up to a
maximum of 44,000,000 Units through Dealers, all of whom shall be members of
the National Association of Securities Dealers, Inc. (the "NASD"). The Dealer
Manager may also sell Units for cash directly to its own clients and customers
at the public offering price and subject to the terms and conditions stated in
the Prospectus. The Dealer Manager hereby accepts such agency and
distributorship and agrees to use its best efforts to sell the Units on said
terms and conditions. The Dealer Manager represents to the Partnership that (i)
it is a member of the NASD; (ii) it and its employees and representatives have
all required licenses and registrations to act under this Agreement; and (iii)
it has established and implemented anti-money laundering compliance programs in
accordance with applicable law, including applicable NASD rules, SEC rules and
the USA PATRIOT Act of 2001, reasonably expected to detect and cause the
reporting of suspicious transactions in connection with the sale of Units of
the Partnership. The Dealer Manager agrees to be bound by the terms of the
Escrow Agreement executed as of January ___, 2003 among Xxxxx Fargo Bank Iowa,
National Association, as escrow agent, the Dealer Manager and the Partnership,
a copy of which is enclosed (the "Escrow Agreement").
3.2 Promptly after the effective date of the Registration
Statement, the Dealer Manager and the Dealers shall commence the offering of
the Units for cash to the public in jurisdictions in which the Units are
registered or qualified for sale or in which such offering is otherwise
permitted. The Dealer Manager and the Dealers will suspend or terminate
offering of the Units upon request of the Partnership at any time and will
resume offering the Units upon subsequent request of the Partnership.
3.3 Except as provided in the "Plan of Distribution" Section of
the Prospectus, as compensation for the services rendered by the Dealer
Manager, the Partnership agrees that it will pay to the Dealer Manager selling
commissions in the amount of 7% of the gross proceeds of the Units sold plus a
dealer manager fee in the amount of 2.5% of the gross proceeds of the Units
sold. Notwithstanding the foregoing, no commissions, payments or amount
whatsoever will be paid to the Dealer Manager under this Section 3.3 unless or
until the gross proceeds of the Units sold are disbursed to the Partnership
pursuant to paragraph 3(a) of the Escrow Agreement. Until the Required Capital,
Pennsylvania/Nebraska Required Capital or New York Required Capital, as
applicable and as defined in the Escrow Agreement, is obtained, investments
will be held in escrow and, if the Required Xxxxxxx, Xxxxxxxxxxxx/Xxxxxxxx
0
Required Capital or New York Required Capital, as applicable, is not obtained,
investments will be returned to the investors in accordance with the
Prospectus. The Partnership will not be liable or responsible to any Dealer for
direct payment of commissions to such Dealer, it being the sole and exclusive
responsibility of the Dealer Manager for payment of commissions to Dealers.
Notwithstanding the above, at the discretion of the General Partners, the
Partnership may act as agent of the Dealer Manager by making direct payment of
commissions to such Dealers without incurring any liability therefor.
3.4 The Dealer Manager represents and warrants to the
Partnership, the General Partners and each person and firm that signs the
Registration Statement that the information under the caption "Plan of
Distribution" in the Prospectus and all other information furnished to the
Partnership by the Dealer Manager in writing expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
3.5 The Dealer Manager shall use and distribute in conjunction
with the offer and sale of any Units only the Prospectus and such sales
literature and advertising as shall have been previously approved in writing by
the Partnership.
3.6 The Dealer Manager shall cause Units to be offered and sold
only in those jurisdictions specified in writing by the Partnership for whose
account Units are then offered for sale, and such list of jurisdictions shall
be updated by the Partnership as additional states are added. The Partnership
shall specify only such jurisdictions in which the offering and sale of its
Units has been authorized by appropriate state regulatory authorities. No Units
shall be offered or sold for the account of the Partnership in any other
states.
3.7 The Dealer Manager represents and warrants to the Partnership
that it will not represent or imply that the escrow agent, as identified in the
Prospectus, has investigated the desirability or advisability of investment in
the Partnership, or has approved, endorsed or passed upon the merits of the
Units or the Partnership, nor will it use the name of said escrow agent in any
manner whatsoever in connection with the offer or sale of the Units other than
by acknowledgment that it has agreed to serve as escrow agent.
4. Indemnification
4.1 The Partnership will indemnify and hold harmless the Dealers
and the Dealer Manager, their officers and directors and each person, if any,
who controls such Dealer or Dealer Manager within the meaning of Section 15 of
the Securities Act from and against any losses, claims, damages or liabilities,
joint or several, to which such Dealers or the Dealer Manager, their officers
and directors, or such controlling person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (a)
any untrue statement or alleged untrue statement of a material fact contained
(i) in any Registration Statement (including the Prospectus as a part thereof)
or any post-effective amendment thereto or in the Prospectus or any amendment
or supplement to the Prospectus or (ii) in any blue sky application or other
document executed by the Partnership or on its behalf specifically for the
purpose of qualifying any or all of the Units for sale under the securities
laws of any jurisdiction or based upon written information furnished by the
Partnership under the securities laws thereof (any such application, document
or information being hereinafter called a "Blue Sky Application"), or (b) the
omission or alleged omission to state in the Registration Statement (including
the Prospectus as a part thereof) or any post-effective amendment thereof or in
any Blue Sky Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (c) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, if used prior to the effective date of the
4
Registration Statement, or in the Prospectus or any amendment or supplement to
the Prospectus or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and will reimburse each Dealer or Dealer Manager, its officers and
each such controlling person for any legal or other expenses reasonably
incurred by such Dealer or Dealer Manager, its officers and directors, or such
controlling person in connection with investigating or defending such loss,
claim, damage, liability or action; provided that the Partnership will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of, or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the General Partners, the
Partnership or the Dealer Manager by or on behalf of any Dealer or Dealer
Manager specifically for use with reference to such Dealer or Dealer Manager in
the preparation of the Registration Statement or any such post-effective
amendment thereof, any such Blue Sky Application or any such preliminary
prospectus or the Prospectus or any such amendment thereof or supplement
thereto; and further provided that the Partnership will not be liable in any
such case if it is determined that such Dealer or Dealer Manager was at fault
in connection with the loss, claim, damage, liability or action.
Notwithstanding the foregoing, the Partnership may not indemnify or hold
harmless the Dealer Manager, any Dealer or any of their affiliates in any
manner that would be inconsistent with the provisions of Section II.D. of the
Statement of Policy Regarding Real Estate Programs of the North American
Securities Administrators Association, Inc. effective January 1, 1993, as
amended. In particular, but without limitation, the Partnership may not
indemnify or hold harmless the Dealer Manager, any Dealer or any of their
affiliates for liabilities arising from or out of a violation of state or
federal securities laws, unless one or more of the following conditions are
met:
(a) there has been a successful adjudication on the merits of
each count involving alleged securities law violations;
(b) such claims have been dismissed with prejudice on the merits
by a court of competent jurisdiction; or
(c) a court of competent jurisdiction approves a settlement of
the claims against the indemnitee and finds that
indemnification of the settlement and the related costs
should be made, and the court considering the request for
indemnification has been advised of the position of the SEC
and of the published position of any state securities
regulatory authority in which the securities were offered as
to indemnification for violations of securities laws.
4.2 The Dealer Manager will indemnify and hold harmless the
Partnership, the General Partners and each person or firm which has signed the
Registration Statement and each person, if any, who controls the Partnership
within the meaning of Section 15 of the Securities Act, from and against any
losses, claims, damages or liabilities to which any of the aforesaid parties
may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (a) any untrue statement of a material fact contained
(i) in the Registration Statement (including the Prospectus as a part thereof)
or any post-effective amendment thereof or (ii) any Blue Sky Application, or
(b) the omission to state in the Registration Statement (including the
Prospectus as a part thereof) or any post-effective amendment thereof or in any
Blue Sky Application a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (c) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, if used prior to the effective date of the Registration Statement,
or in the Prospectus, or in any amendment or supplement to the Prospectus or
the omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein in the light of the
circumstances under which they were made not misleading in each case to the
extent, but only to the extent, that such untrue statement or omission was made
in reliance upon and in conformity with written information furnished to the
Partnership by or on behalf of the Dealer Manager specifically for
5
use with reference to the Dealer Manager in the preparation of the Registration
Statement or any such post-effective amendments thereof or any such Blue Sky
Application or any such preliminary prospectus or the Prospectus or any such
amendment thereof or supplement thereto, or (d) any unauthorized use of sales
materials or use of unauthorized verbal representations concerning the Units by
the Dealer Manager, or (e) any failure to comply with applicable laws governing
money laundry abatement and anti-terrorist financing efforts, including
applicable NASD rules, SEC rules and the USA PATRIOT Act of 2001, and will
reimburse the aforesaid parties, in connection with investigation or defending
such loss, claim, damage, liability or action. This indemnity agreement will be
in addition to any liability which the Dealer Manager may otherwise have.
4.3 Each Dealer severally will indemnify and hold harmless the
Partnership, the Dealer Manager, the General Partners and each of their
partners and such partners' directors (including any persons named in any of
the Registration Statements with his consent, as about to become a director),
each of their officers who has signed any of the Registration Statements and
each person, if any, who controls the Partnership and the Dealer Manager or the
General Partners within the meaning of Section 15 of the Securities Act from
and against any losses, claims, damages or liabilities to which the
Partnership, the Dealer Manager, the General Partners, any such director or
officer, or controlling person may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (a) any untrue statement or
alleged untrue statement of a material fact contained (i) in the Registration
Statement (including the Prospectus as a part thereof) or any post-effective
amendment thereof or (ii) in any Blue Sky Application, or (b) the omission or
alleged omission to state in the Registration Statement (including the
Prospectus as a part thereof or any post-effective amendment thereof or in any
Blue Sky Application a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (c) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, if used prior to the effective date of the Registration Statement,
or in the Prospectus, or in any amendment or supplement to the Prospectus or
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Partnership or
the Dealer Manager by or on behalf of such Dealer specifically for use with
reference to such Dealer in the preparation of the Registration Statement or
any such post-effective amendments thereof or any such Blue Sky Application or
any such preliminary prospectus or the Prospectus or any such amendment thereof
or supplement thereto, or (d) any unauthorized use of sales materials or use of
unauthorized verbal representations concerning the Units by such Dealer or
Dealer's representations or agents in violation of Section VII of the Selected
Dealer Agreement or otherwise, or (e) any failure to comply with applicable
laws governing money laundry abatement and anti-terrorist financing efforts,
including applicable NASD rules, SEC rules and the USA PATRIOT Act of 2001, and
will reimburse the Partnership, the Dealer Manager and the General Partners and
any such directors or officers, or controlling person, in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which such Dealer
may otherwise have.
4.4 Promptly after receipt by an indemnified party under this
Section 4 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 4, notify in writing the indemnifying party of the
commencement thereof and the omission so to notify the indemnifying party will
relieve such indemnifying party from any liability under this Section 4 as to
the particular item for which indemnification is then being sought, but not
from any other liability which it may have to any indemnified party. In case
any such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, to the extent it may wish, jointly with any other indemnifying party
similarly notified, to participate in the defense thereof, with separate
counsel. Such participation shall not relieve such indemnifying party of the
6
obligation to reimburse the indemnified party for reasonable legal and other
expenses (subject to Section 4.5) incurred by such indemnified party in
defending itself, except for such expenses incurred after the indemnifying
party has deposited funds sufficient to effect the settlement, with prejudice,
of the claim in respect of which indemnity is sought. Any such indemnifying
party shall not be liable to any such indemnified party on account of any
settlement of any claim or action effected without the consent of such
indemnifying party.
4.5 The indemnifying party shall pay all legal fees and expenses
of the indemnified party in the defense of such claims or actions; provided,
however, that the indemnifying party shall not be obligated to pay legal
expenses and fees to more than one law firm in connection with the defense of
similar claims arising out of the same alleged acts or omissions giving rise to
such claims notwithstanding that such actions or claims are alleged or brought
by one or more parties against more than one indemnified party. If such claims
or actions are alleged or brought against more than one indemnified party, then
the indemnifying party shall only be obliged to reimburse the expenses and fees
of the one law firm that has been selected by a majority of the indemnified
parties against which such action is finally brought; and in the event a
majority of such indemnified parties is unable to agree on which law firm for
which expenses or fees will be reimbursable by the indemnifying party, then
payment shall be made to the first law firm of record representing an
indemnified party against the action or claim. Such law firm shall be paid only
to the extent of services performed by such law firm and no reimbursement shall
be payable to such law firm on account of legal services performed by another
law firm.
4.6 The indemnity agreements contained in this Section 4 shall
remain operative and in full force and effect regardless of (a) any
investigation made by or on behalf of any Dealer, or any person controlling any
Dealer or by or on behalf of the Partnership, the Dealer Manager, or the
General Partners or any officer or director thereof, or by or on behalf of the
Partnership or the Dealer Manager, (b) delivery of any Units and payment
therefor, and (c) any termination of this Agreement. A successor of any Dealer
or of any of the parties to this Agreement, as the case may be, shall be
entitled to the benefits of the indemnity agreements contained in this Section
4.
5. Survival of Provisions
The respective agreements, representations and warranties of the
Partnership and the Dealer Manager set forth in this Agreement shall remain
operative and in full force and effect regardless of (a) any termination of
this Agreement, (b) any investigation made by or on behalf of the Dealer
Manager or any Dealer or any person controlling the Dealer Manager or any
Dealer or by or on behalf of the Partnership, its partners or any person
controlling the Partnership, and (c) the acceptance of any payment for the
Units.
6. Applicable Law; Venue
This Agreement was executed and delivered in, and its validity,
interpretation and construction shall be governed by the laws of, the State of
Texas; provided however, that causes of action for violations of federal or
state securities laws shall not be governed by this Section. Venue for any
action brought hereunder shall lie exclusively in Dallas, Texas.
7. Counterparts
This Agreement may be executed in any number of counterparts. Each
counterpart, when executed and delivered, shall be an original contract, but
all counterparts, when taken together, shall constitute one and the same
Agreement.
7
8. Successors and Amendment
8.1 This Agreement shall inure to the benefit of and be binding
upon the Dealer Manager, the General Partners, the Partnership and their
respective successors. Nothing in this Agreement is intended or shall be
construed to give to any other person any right, remedy or claim, except as
otherwise specifically provided herein. This Agreement shall inure to the
benefit of the Dealers to the extent set forth in Sections 1 and 4 hereof.
8.2 This Agreement may be amended by the written agreement of the
Dealer Manager and the Partnership, and, as to Sections 3.3, 4 and 10, the
General Partners.
9. Term
This Agreement may be terminated by either party (i) immediately upon
notice to the other party in the event that the other party shall have
materially failed to comply with any of the material provisions of this
Agreement on its part to be performed during the term of this Agreement or if
any of the representations, warranties, covenants or agreements of such party
contained herein shall not have been materially complied with or satisfied
within the times specified or (ii) by either party on 60 days' written notice.
In any case, this Agreement shall expire at the close of business on
the effective date that the Offering is terminated. The provisions of Section 4
hereof shall survive such termination. In addition, the Dealer Manager, upon
the expiration or termination of this Agreement, shall (i) promptly deposit any
and all funds in its possession which were received from investors for the sale
of Units into the appropriate escrow account or, if the minimum number of Units
have been sold and accepted by the Partnership, into such other account as the
Partnership may designate; and (ii) promptly deliver to the Partnership all
records and documents in its possession which relate to the Offering and are
not designated as dealer copies. The Dealer Manager, at its sole expense, may
make and retain copies of all such records and documents, but shall keep all
such information confidential. The Dealer Manager shall use its best efforts to
cooperate with the Partnership to accomplish an orderly transfer of management
of the Offering to a party designated by the Partnership. Upon expiration or
termination of this Agreement, the Partnership shall pay to the Dealer Manager
all commissions to which the Dealer Manager is or becomes entitled under
Section 3 at such time as such commissions become payable.
10. Confirmation
The General Partners hereby agree and assume the duty to confirm on
their behalf and on behalf of dealers or brokers who sell the Units all orders
for purchase of Units accepted by the Partnership. Such confirmations will
comply with the rules of the SEC and the NASD, and will comply with applicable
laws of such other jurisdictions to the extent the General Partners are advised
of such laws in writing by the Dealer Manager.
11. Suitability of Investors
The Dealer Manager will offer Units, and in its agreements with
Dealers will require that the Dealers offer Units, only to persons who meet the
financial qualifications set forth in the Prospectus or in any suitability
letter or memorandum sent to it by the Partnership and will only make offers to
persons in the states in which it is advised in writing that the Units are
qualified for sale or that such qualification is not required. In offering
Units, the Dealer Manager will, and in its agreements with Dealers, the Dealer
Manager will, require that the Dealer comply with the provisions of the Conduct
Rules contained in Sections 2000-3400 of the NASD Manual (the "NASD Conduct
Rules"), including the provisions in Rule 2810 that apply to Direct
Participation Programs, as well as all other applicable rules and regulations
relating to suitability of investors, including without limitation, the
provisions of Article III.C. of the
8
Statement of Policy Regarding Real Estate Programs of the North American
Securities Administrators Association, Inc.
12. Submission of Orders
12.1 Those persons who purchase Units will be instructed by the
Dealer Manager or the Dealer to make their checks payable to "Xxxxx Fargo Bank
Iowa, N.A., as escrow agent for Behringer Harvard Mid-Term Value Enhancement
Fund I LP." The Dealer Manager and any Dealer receiving a check not conforming
to the foregoing instructions shall return such check directly to such
subscriber not later than the end of the next business day following its
receipt. Checks received by the Dealer Manager or Dealer which conform to the
foregoing instructions shall be transmitted for deposit pursuant to one of the
methods described in this Section 12. Transmittal of received investor funds
will be made in accordance with the following procedures. The Dealer Manager
may authorize certain Dealers which are "$250,000 broker-dealers" to instruct
their customers to make their checks for Units subscribed for payable directly
to the Dealer. In such case, the Dealer will collect the proceeds of the
subscribers' checks and issue a check for the aggregate amount of the
subscription proceeds made payable to the order of the escrow agent.
12.2 If a Dealer conducts its internal supervisory procedures at
the location where subscription documents and checks are initially received,
the Dealer shall forward (i) the subscription documents to the Dealer Manager
and (ii) the checks to the escrow agent by noon of the next business day
following receipt of the subscription documents and the check.
12.3 If a Dealer's internal supervisory procedures are to be
performed at a different location (the "Final Review Office"), the subscription
documents and check must be transmitted to the Final Review Office by the end
of the next business day following receipt of the subscription documents and
check by the Dealer. The Final Review Office will, by the next business day
following receipt of the subscription documents and check, forward both the
subscription documents and check to the Dealer Manager as processing
broker-dealer in order that the Dealer Manager may complete its review of the
documentation and process the subscription documents and check.
12.4 Any check received by the Dealer Manager directly or as
processing broker-dealer from the Dealers will, in all cases, be forwarded to
the escrow agent as soon as practicable, but in any event by the end of the
second business day following receipt by the Dealer Manager of the subscription
documents and check. Checks of rejected subscribers will be promptly returned
to such subscribers.
12.5 If requested by the Partnership, the Dealer Manager shall
obtain, and shall cause the Dealers to obtain, from subscribers for the Units,
other documentation reasonably deemed by the Partnership to be required under
applicable law or as may be necessary to reflect the policies of the
Partnership. Such documentation may include, without limitation, subscribers'
written acknowledgement and agreement to the privacy policies of the
Partnership.
13. Notices.
Any notice, approval, request, authorization, direction or other
communication under this Agreement shall be given in writing and shall be
deemed to be delivered when delivered in person or deposited in the United
States mail, properly addressed and stamped with the required postage,
registered or certified mail, return receipt requested, to the intended
recipient as set forth below:
If to the Partnership: Behringer Harvard Mid-Term Value Enhancement Fund I LP
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, General Partner
9
If to the Dealer Manager: Behringer Securities LP
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
Any party may change its address specified above by giving the other
party notice of such change in accordance with this Section 13.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us as of the date first above written.
Very truly yours,
BEHRINGER HARVARD MID-TERM
VALUE ENHANCEMENT FUND I LP
By:
----------------------------------------
Xxxxxx X. Xxxxxxxxx, General Partner
By: Behringer Harvard Advisors I LP,
Its General Partner
By: Harvard Property Trust, LLC
Its General Partner
By:
------------------------------------
Xxxxxx X. Xxxxxxxxx, President
Accepted and agreed as of the
date first above written.
BEHRINGER SECURITIES LP
By: HARVARD PROPERTY TRUST, LLC
Its General Partner
By:
-------------------------------------------------
Xxxxxx X. Xxxxxxx, III, Chief Operating Officer
10
EXHIBIT A
SELECTED DEALER AGREEMENT
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP
Up to 44,000,000 Units of Limited Partnership Interest/$440.0 million
Ladies and Gentlemen:
Behringer Securities LP, as the dealer manager ("Dealer Manager") for
Behringer Harvard Mid-Term Value Enhancement Fund I LP (the "Partnership"), a
Texas limited partnership of which Behringer Harvard Advisors I LP, a Texas
limited partnership, and Xxxxxx X. Xxxxxxxxx serve as the general partners (the
"General Partners"), invites you (the "Dealer") to participate in the
distribution of units of limited partnership interest in the Partnership
("Units") subject to the following terms:
I. Dealer Manager Distribution Agreement
The Dealer Manager has entered into an agreement with the Partnership and the
General Partners called the Dealer Manager Distribution Agreement dated January
___, 2003, in the form attached hereto as Exhibit A (the "Dealer Manager
Agreement", the terms of the Dealer Manager Agreement relating to the Dealer
are incorporated herein by reference as if set forth verbatim and capitalized
terms not otherwise defined herein shall have the meanings given them in the
Dealer Manager Agreement). By your acceptance of this Agreement, you will
become one of the Dealers referred to in the Dealer Manager Agreement and will
be entitled and subject to the indemnification provisions contained in the
Dealer Manager Agreement, including the provisions of the Dealer Manager
Agreement wherein the Dealers severally agree to indemnify and hold harmless
the Partnership, the General Partners, the Dealer Manager and each officer and
director thereof, and each person, if any, who controls the Partnership, the
General Partners or the Dealer Manager within the meaning of the Securities Act
of 1933, as amended (the "Securities Act"). Except as otherwise specifically
stated herein, all terms used in this Agreement have the meanings provided in
the Dealer Manager Agreement. The Units are offered solely through
broker-dealers who are members of the National Association of Securities
Dealers, Inc. (the "NASD").
Dealer hereby agrees to use its best efforts to sell the Units for cash on the
terms and conditions stated in the Prospectus. Nothing in this Agreement shall
be deemed or construed to make Dealer an employee, agent, representative or
partner of the Dealer Manager or of the Partnership, and Dealer is not
authorized to act for the Dealer Manager or the Partnership or to make any
representations on their behalf except as set forth in the Prospectus and such
other printed information furnished to Dealer by the Dealer Manager or the
Partnership to supplement the Prospectus ("supplemental information").
II. Submission of Orders
Those persons who purchase Units will be instructed by the Dealer to make their
checks payable to "Xxxxx Fargo Bank Iowa, N.A., as escrow agent for Behringer
Harvard Mid-Term Value Enhancement Fund I LP." Any Dealer receiving a check not
conforming to the foregoing instructions shall return such check directly to
such subscriber not later than the end of the next business day following its
receipt. Checks received by the Dealer which conform to the foregoing
instructions shall be transmitted for deposit pursuant to one of the methods in
this Article II. The Dealer Manager may authorize Dealer if Dealer is a
"$250,000 broker-dealer" to instruct its customers to make its checks for Units
subscribed for payable directly to the Dealer, in which case the Dealer will
collect the proceeds of the subscriber's checks and issue a check made payable
to the order of the escrow agent for the aggregate amount of the
subscription proceeds. Transmittal of received investor funds will be made in
accordance with the following procedures:
(a) If a Dealer conducts its internal supervisory procedures at
the location where subscription documents and checks are
initially received, the Dealer shall forward (i) the
subscription documents to the Dealer Manager and (ii) the
checks to the escrow agent by noon of the next business day
following receipt of the subscription documents and the
check.
(b) If the internal supervisory procedures are to be performed at
a different location (the "Final Review Office"), the
subscription documents and check must be transmitted to the
Final Review Office by the end of the next business day
following receipt of the subscription documents and check by
the Dealer. The Final Review Office will, by the next
business day following receipt of the subscription documents
and check, forward both the subscription documents and check
to the Dealer Manager as processing broker-dealer in order
that the Dealer Manager may complete its review of the
documentation and process the subscription documents and
check.
If requested by the Partnership or the Dealer Manager, the Dealer
shall obtain from subscribers for the Units, other documentation reasonably
deemed by the Partnership or the Dealer Manager to be required under applicable
law or as may be necessary to reflect the policies of the Partnership or the
Dealer Manager. Such documentation may include, without limitation, subscriber
written acknowledgement and agreement to the privacy policies of the
Partnership or the Dealer Manager.
III. Pricing
Units shall be offered to the public at the offering price of $10.00 per Unit,
payable in cash. Except as otherwise indicated in the Prospectus or in any
letter or memorandum sent to the Dealer by the Partnership or Dealer Manager, a
minimum initial purchase of 100 Units is required. Except as otherwise
indicated in the Prospectus, additional investments may be made in cash in
minimal increments of at least 2.5 Units. The Units are nonassessable, and
limited partners will not be required to contribute additional sums to the
capital of the Partnership. The Dealer hereby agrees to place any order for the
full purchase price.
IV. Dealers' Commissions
Except for discounts described in or as otherwise provided in the "Plan of
Distribution" Section of the Prospectus, the Dealer's selling commission
applicable to the total public offering price of Units sold by Dealer which it
is authorized to sell hereunder is 7% of the gross proceeds of Units sold by it
and accepted and confirmed by the General Partners, which commission will be
paid by the Dealer Manager. For these purposes, a "sale of Units" shall occur
if and only if a transaction has closed with a securities purchaser pursuant to
all applicable offering and subscription documents and the Partnership has
thereafter distributed the commission to the Dealer Manager in connection with
such transaction. The Dealer hereby waives any and all rights to receive
payment of commissions due until such time as the Dealer Manager is in receipt
of the commission from the Partnership. The Dealer affirms that the Dealer
Manager's liability for commissions payable is limited solely to the proceeds
of commissions receivable associated therewith. In addition, as set forth in
the Prospectus, the Dealer Manager may reallow out of its dealer manager fee a
marketing fee and due diligence expense reimbursement of up to 1.5% of the
gross proceeds of Units sold by Dealers participating in the offering of Units,
based on such factors as the number of Units sold by such participating Dealer,
the assistance of such participating Dealer in marketing the offering of Units,
and bona fide conference fees incurred.
2
Dealer acknowledges and agrees that no commissions, payments or amount
whatsoever will be paid to the Dealer unless or until the gross proceeds of the
Units sold are disbursed to the Partnership pursuant to paragraph 3(a) of the
Escrow Agreement. Until the Required Capital, Pennsylvania/Nebraska Required
Capital or New York Required Capital, as applicable and as defined in the
Escrow Agreement, is obtained, investments will be held in escrow and, if the
Required Capital, Pennsylvania/Nebraska Required Capital or New York Required
Capital, as applicable, is not obtained, investments will be returned to the
investors in accordance with the Prospectus.
The parties hereby agree that the foregoing commission is not in excess of the
usual and customary distributors' or sellers' commission received in the sale
of securities similar to the Units, that Dealer's interest in the offering is
limited to such commission from the Dealer Manager and Dealer's indemnity
referred to in Section 4 of the Dealer Manager Agreement, that the Partnership
is not liable or responsible for the direct payment of such commission to the
Dealer.
V. Payment
Payments of selling commissions will be made by the Dealer Manager (or by the
Partnership as provided in the Dealer Manager Agreement) to Dealer within 30
days of the receipt by the Dealer Manager of the gross commission payments from
the Partnership.
VI. Right to Reject Orders or Cancel Sales
All orders, whether initial or additional, are subject to acceptance by and
shall only become effective upon confirmation by the General Partners, and the
Partnership and the General Partners reserve the right to reject any order for
any or no reason. Orders not accompanied by a Subscription Agreement and
Signature Page and the required check in payment for the Units may be rejected.
Issuance and delivery of the Units will be made only after actual receipt of
payment therefor. If any check is not paid upon presentment, or if the
Partnership is not in actual receipt of clearinghouse funds or cash, certified
or cashier's check or the equivalent in payment for the Units within 15 days of
sale, the Partnership reserves the right to cancel the sale without notice. In
the event an order is rejected, canceled or rescinded for any reason, the
Dealer agrees to return to the Dealer Manager any commission theretofore paid
with respect to such order.
VII. Prospectus and Supplemental Information
Dealer is not authorized or permitted to give and will not give, any
information or make any representation concerning the Units except as set forth
in the Prospectus and supplemental information. The Dealer Manager will supply
Dealer with reasonable quantities of the Prospectus, any supplements thereto
and any amended Prospectus, as well as any supplemental information, for
delivery to investors, and Dealer will deliver a copy of the Prospectus and all
supplements thereto and any amended Prospectus to each investor to whom an
offer is made prior to or simultaneously with the first solicitation of an
offer to sell the Units to an investor. The Dealer agrees that it will not send
or give any supplements thereto and any amended Prospectus to that investor
unless it has previously sent or given a Prospectus and all supplements thereto
and any amended Prospectus to that investor or has simultaneously sent or given
a Prospectus and all supplements thereto and any amended Prospectus with such
supplemental information. Dealer agrees that it will not show or give to any
investor or prospective investor or reproduce any material or writing which is
supplied to it by the Dealer Manager and marked "dealer only" or otherwise
bearing a legend denoting that it is not to be used in connection with the sale
of Units to members of the public. Dealer agrees that it will not use in
connection with the offer or sale of Units any material or writing which
relates to another partnership supplied to it by the Partnership or the Dealer
Manager bearing a legend which states that such material may not be used in
connection with the offer or sale of
3
any securities other than the partnership to which it relates. Dealer further
agrees that it will not use in connection with the offer or sale of Units any
materials or writings which have not been previously approved by the Dealer
Manager. Each Dealer agrees, if the Dealer Manager so requests, to furnish a
copy of any revised preliminary Prospectus to each person to whom it has
furnished a copy of any previous preliminary Prospectus, and further agrees
that it will itself mail or otherwise deliver all preliminary and final
Prospectuses required for compliance with the provisions of Rule 15c2-8 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Regardless of the termination of this Agreement, Dealer will deliver a
Prospectus in transactions in the Units for a period of 90 days from the
effective date of the Registration Statement or such longer period as may be
required by the Exchange Act. On becoming a Dealer, and in offering and selling
Units, Dealer agrees to comply with all the applicable requirements under the
Securities Act and the Exchange Act. Notwithstanding the termination of this
Agreement or the payment of any amount to Dealer, Dealer agrees to pay Dealer's
proportionate share of any claim, demand or liability asserted against Dealer
and the other Dealers on the basis that Dealers or any of them constitute an
association, unincorporated business or other separate entity, including in
each case Dealer's proportionate share of any expenses incurred in defending
against any such claim, demand or liability.
VIII. License and Association Membership
Dealer's acceptance of this Agreement constitutes a representation to the
Partnership and the Dealer Manager that Dealer is a properly registered or
licensed broker-dealer, duly authorized to sell Units under Federal and state
securities laws and regulations and in all states where it offers or sells
Units, and that it is a member in good standing of the NASD. This Agreement
shall automatically terminate if the Dealer ceases to be a member in good
standing of such association, or in the case of a foreign dealer, so to
conform. Dealer agrees to notify the Dealer Manager immediately if Dealer
ceases to be a member in good standing, or in the case of a foreign dealer, so
to conform. The Dealer Manager also hereby agrees to abide by the NASD Conduct
Rules, including, but not limited to, Rules 2730, 2740, 2420 and 2750, and the
provisions in Rule 2810 that apply to Direct Participation Programs.
IX. Anti-Money Laundering Compliance Programs
Dealer represents to the Partnership and the Dealer Manager that Dealer has
established and implemented anti-money laundering compliance programs in
accordance with applicable law, including applicable NASD rules, SEC rules and
the USA PATRIOT Act of 2001, reasonably expected to detect and cause the
reporting of suspicious transactions in connection with the sale of Units of
the Partnership.
X. Limitation of Offer
Dealer will offer Units only to persons who meet the financial qualifications
set forth in the Prospectus or in any suitability letter or memorandum sent to
it by the Partnership or the Dealer Manager and will only make offers to
persons in the states in which it is advised in writing that the Units are
qualified for sale or that such qualification is not required. In offering
Units, Dealer will comply with the provisions of the NASD Conduct Rules,
including the provisions in Rule 2810 that apply to Direct Participation
Programs, as well as all other applicable rules and regulations relating to
suitability of investors, including without limitation, the provisions of
Article III.C. of the Statement of Policy Regarding Real Estate Programs of the
North American Securities Administrators Association, Inc.
XI. Termination
Dealer will suspend or terminate its offer and sale of Units upon the request
of the Partnership or the Dealer Manager at any time and will resume its offer
and sale of Units hereunder upon subsequent request
4
of the Partnership or the Dealer Manager. Any party may terminate this
Agreement by written notice. Such termination shall be effective 48 hours after
the mailing of such notice. This Agreement is the entire agreement of the
parties and supersedes all prior agreements, if any, between the parties
hereto.
This Agreement may be amended at any time by the Dealer Manager by written
notice to the Dealer, and any such amendment shall be deemed accepted by Dealer
upon placing an order for sale of Units after he has received such notice.
XII. Privacy Laws
The Dealer Manager and Dealer (each referred to individually in this section as
"party") agree as follows:
(a) Each party agrees to abide by and comply with (i) the privacy
standards and requirements of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 ("GLB Act"),
(ii) the privacy standards and requirements of any other applicable Federal or
state law, and (iii) its own internal privacy policies and procedures, each as
may be amended from time to time.
(b) Each party agrees to refrain from the use or disclosure of nonpublic
personal information (as defined under the GLB Act) of all customers who have
opted out of such disclosures except as necessary to service the customers or
as otherwise necessary or required by applicable law; and
(c) Each party shall be responsible for determining which customers have
opted out of the disclosure of nonpublic personal information by periodically
reviewing and, if necessary, retrieving a list of such customers (the "List")
as provided by each to identify customers that have exercised their opt-out
rights. In the event either party uses or discloses nonpublic personal
information of any customer for purposes other than servicing the customer, or
as otherwise required by applicable law, that party will consult the List to
determine whether the affected customer has exercised his or her opt-out
rights. Each party understands that each is prohibited from using or disclosing
any nonpublic personal information of any customer that is identified on the
List as having opted out of such disclosures.
XIII. Notice
All notices will be in writing and will be duly given to the Dealer Manager
when mailed to 0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, and
to Dealer when mailed to the address specified by Dealer herein.
XIV. Attorneys' Fees, Applicable Law and Venue
In any action to enforce the provisions of this Agreement or to secure damages
for its breach, the prevailing party shall recover its costs and reasonable
attorney's fees. This Agreement shall be construed under the laws of the State
of Texas and shall take effect when signed by Dealer and countersigned by the
Dealer Manager. Venue for any action (including arbitration) brought hereunder
shall lie exclusively in Dallas, Texas.
[SIGNATURES ON FOLLOWING PAGES]
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on its behalf by its duly authorized agent.
THE DEALER MANAGER:
BEHRINGER SECURITIES LP
By: HARVARD PROPERTY TRUST, LLC
Its General Partner
By:
------------------------------------
Xxxxxx X. Xxxxxxx, III
Chief Operating Officer
6
We have read the foregoing Agreement and we hereby accept and agree to the
terms and conditions therein set forth. We hereby represent that the list below
of jurisdictions in which we are registered or licensed as a broker or dealer
and are fully authorized to sell securities is true and correct, and we agree
to advise you of any change in such list during the term of this Agreement.
1. Identity of Dealer:
Name:
--------------------------------------------------------------------------
Type of entity:
----------------------------------------------------------------
(corporation, partnership, proprietorship, etc.)
Organized in the State of:
-----------------------------------------------------
Licensed as broker-dealer in the following States:
-----------------------------
-------------------------------------------------------------------------------
Tax I.D. #:
--------------------------------------------------------------------
2. Person to receive notice pursuant to Section XIII:
Name:
--------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
City, State and Zip Code:
------------------------------------------------------
Telephone No.:
-----------------------------------------------------------------
Facsimile No.:
-----------------------------------------------------------------
7
AGREED TO AND ACCEPTED BY THE DEALER:
-------------------------------
(Dealer's Firm Name)
By:
----------------------------
Signature
Name:
--------------------------
Title:
-------------------------
8
