EXHIBIT 1.1
DEALER MANAGER DISTRIBUTION AGREEMENT
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP
Up to 19,250,000 Units of Limited Partnership Interest/$192,500,000
_____________, 2002
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 19,250,000 units of limited partnership interest ("Units") in the Partnership
for $10.00 per Unit, including 17,500,000 Units to be offered to the public and
1,750,000 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 ___, 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
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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
19,250,000 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 it is a member of the NASD and that
it and its employees and representatives have all required licenses and
registrations to act under this Agreement. The Dealer Manager agrees to be bound
by the terms of the Escrow Agreement executed as of _____________, 2002 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
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 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
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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 General Partners 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 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
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and directors, or such controlling person in connection with investigating or
defending such loss, claim, damage, liability or action; provided that the
Partnership and the General Partners 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 General Partners and
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.
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 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 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
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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 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 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.
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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.
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
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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 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 subscriber's
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
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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.
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
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.
[Signatures on Following Page]
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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
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EXHIBIT A
SELECTED DEALER AGREEMENT
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP
Up to 19,250,000 Units of Limited Partnership Interest /$192,500,000
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
___________ ___, 2002, 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.
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.
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 dispursed to the Partnership pursuant to paragraph 3(a) of the
Escrow Agreement. Until the Required Capital, Pennsylvania Required Capital or
New
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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 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 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
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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 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 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.
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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]
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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:
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Xxxxxx X. Xxxxxxx, III
Chief Operating Officer
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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:
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Type of entity:
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(corporation, partnership, proprietorship, etc.)
Organized in the State of:
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Licensed as broker-dealer in the following States:
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Tax I.D. #:
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2. Person to receive notice pursuant to Section XIII:
Name:
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Address:
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City, State and Zip Code:
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Telephone No.:
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Facsimile No.:
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AGREED TO AND ACCEPTED BY THE DEALER:
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(Dealer's Firm Name)
By:
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Signature
Name:
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Title:
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