EXHIBIT 10.2
ESCROW AGREEMENT
Xxxxx Fargo Bank Iowa, National Association
000 Xxxxxx X0000-000
Corporate Trust Services, XXX
Xxx Xxxxxx, XX 00000
Re: Behringer Harvard Mid-Term Value Enhancement Fund I LP
Ladies and Gentlemen:
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP, a Texas limited
partnership (the "Partnership"), will issue in a public offering (the
"Offering") units of its limited partnership interests (the "Units") pursuant to
a Registration Statement on Form S-11 filed by the Partnership with the
Securities and Exchange Commission. Behringer Securities LP, a Texas limited
partnership (the "Dealer Manager"), will act as dealer manager for the offering
of the Units. The Partnership is entering into this agreement to set forth the
terms on which Xxxxx Fargo Bank Iowa, National Association (the "Escrow Agent"),
will hold and disburse the proceeds from subscriptions for the purchase of the
Units in the Offering until such time as: (i) in the case of subscriptions
received from all nonaffiliates of the Partnership, the Partnership has received
subscriptions for Units resulting in total minimum capital raised of $2,000,000
(the "Required Capital"); (ii) in the case of subscriptions received from
residents of Pennsylvania ("Pennsylvania Subscribers") and Nebraska ("Nebraska
Subscribers"), the Partnership has received subscriptions for Units from
nonaffiliates of the Partnership resulting in total minimum capital raised of
$22,000,000 (the "Pennsylvania/Nebraska Required Capital"); and (iii) in the
case of subscriptions received from residents of New York ("New York
Subscribers"), the Partnership has received subscriptions for Units resulting in
total minimum capital raised of $2,500,000 (the "New York Required Capital").
The Partnership hereby appoints Xxxxx Fargo Bank Iowa, National Association, as
Escrow Agent for purposes of holding the proceeds from the subscriptions for the
Units, on the terms and conditions hereinafter set forth:
1. Persons subscribing to purchase the Units (the "Subscribers") will be
instructed by the Dealer Manager or any soliciting dealers to remit the purchase
price in the form of checks, drafts, wires, Automated Clearing House (ACH) or
money orders (hereinafter "instruments of payment") payable to the order of
"Xxxxx Fargo Bank Iowa, N.A., Escrow Agent for Behringer Harvard Mid-Term Value
Enhancement Fund I LP." Any checks, drafts or money orders received made payable
to a party other than the Escrow Agent shall be returned to the soliciting
dealer who submitted the check, draft or money order. Within one (1) business
day after receipt of instruments of payment from the Offering, the Dealer
Manager will (a) send to the Escrow Agent: each Subscriber's name, address,
executed IRS Form W-9, number of Units purchased, and purchase price remitted,
and (b) deposit the instruments of payment from such Subscribers (the
"Subscription Materials"), into an interest-bearing deposit account entitled
"ESCROW ACCOUNT FOR THE BENEFIT OF SUBSCRIBERS FOR UNITS OF BEHRINGER HARVARD
MID-TERM VALUE ENHANCEMENT FUND I LP" (the "Escrow Account"), which deposit
shall occur within one (1) business day after the Dealer Manager's receipt of
all the Subscription Materials, until such Escrow Account has closed pursuant to
paragraph 3(a) hereof. Instruments of payment received from Pennsylvania
Subscribers and Nebraska Subscribers (as identified as
such by the Partnership) shall be accounted for separately in a subaccount
entitled "ESCROW ACCOUNT FOR THE BENEFIT OF PENNSYLVANIA AND NEBRASKA
SUBSCRIBERS" (the "Pennsylvania/Nebraska Escrow Account"), until such
Pennsylvania/Nebraska Escrow Account has closed pursuant to paragraph 3(a)
hereof. Instruments of payment received from New York Subscribers (as identified
as such by the Partnership) shall be accounted for separately in a subaccount
entitled "ESCROW ACCOUNT FOR THE BENEFIT OF NEW YORK SUBSCRIBERS" (the "New York
Escrow Account"), until such New York Escrow Account has closed pursuant to
paragraph 3(a) hereof. The Director of Banking and Finance of the State of
Nebraska shall have the right to inspect and make copies of the records of the
Escrow Agent relating to the Pennsylvania/Nebraska Escrow Account at any
reasonable time wherever the records are located. Each of the Escrow Account,
the Pennsylvania/Nebraska Escrow Account, and New York Escrow Account will be
established and maintained in such a way as to permit the interest income
calculations described in paragraph 7.
2. The Escrow Agent agrees to promptly process for collection the
instruments of payment upon deposit into the applicable Escrow Account,
Pennsylvania/Nebraska Escrow Account, or New York Escrow Account. Deposits shall
be held in the Escrow Account, the Pennsylvania/Nebraska Escrow Account, and the
New York Escrow Account until such funds are disbursed in accordance with
paragraph 3 hereof. Prior to disbursement of the funds deposited in the Escrow
Account, such funds shall not be subject to claims by creditors of the Company,
the Dealer Manager or any of their affiliates. If any of the instruments of
payment are returned to the Escrow Agent for nonpayment prior to receipt of the
Required Capital or, in connection with subscriptions from Pennsylvania
Subscribers, the Pennsylvania/Nebraska Required Capital or, in connection with
subscriptions from New York Subscribers, the New York Required Capital, the
Escrow Agent shall promptly notify the Dealer Manager and the Partnership in
writing via mail, email or facsimile of such nonpayment, and is authorized to
debit the Escrow Account, the Pennsylvania/Nebraska Escrow Account, or the New
York Escrow Account, as applicable, in the amount of such returned payment as
well as any interest earned on the amount of such payment.
3. (a) Subject to the provisions of subparagraphs 3(b)-3(f) below:
(i) once collected funds in the Escrow Account are an
amount equal to or greater than the Required Capital, the
Escrow Agent shall promptly notify the Partnership and, upon
receiving written instruction from the Partnership, (A)
disburse to the Partnership, by check, ACH or wire transfer,
the funds in the Escrow Account representing the gross
purchase price for the Units, and (B) disburse to the
Subscribers or the Partnership, as applicable, any interest
thereon pursuant to the provisions of subparagraph 3(f). For
purposes of this Agreement, the term "collected funds" shall
mean all funds received by the Escrow Agent that have cleared
normal banking channels and are in the form of cash or a cash
equivalent. After such time the Escrow Account shall remain
open and the Partnership shall continue to cause subscriptions
for the Units that are not to be deposited in the
Pennsylvania/Nebraska Escrow Account or the New York Escrow
Account to be deposited therein until the Partnership informs
the Escrow Agent in writing to close the Escrow Account, and
thereafter any subscription documents and instruments of
payment received by the Escrow Agent from Subscribers other
than Pennsylvania Subscribers and Nebraska Subscribers shall
be forwarded directly to the Partnership.
(ii) regardless of any closing of the Escrow Account, the
Partnership and the Dealer Manager shall continue to forward
instruments of payment and Subscription Materials received
from Pennsylvania Subscribers for deposit into the
Pennsylvania/Nebraska Escrow Account to the Escrow Agent until
such time as the Partnership notifies the Escrow Agent in
writing that total subscription proceeds (including the amount
then in the Pennsylvania/Nebraska Escrow Account) equal or
exceed the Pennsylvania/Nebraska Required Capital. Upon
receipt of a written notice from the Partnership that total
subscription proceeds (including the amount then in the
Pennsylvania/Nebraska Escrow Account) equaling or exceeding
the Pennsylvania/Nebraska Required Capital have been received
in collected funds, the Escrow Agent shall promptly notify the
Partnership and provide to the Director of Banking and Finance
of the State of Nebraska an affidavit
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which states that all of the conditions of this Agreement
relating to the Pennsylvania/Nebraska Escrow Account have been
met (the "Escrow Agent Affidavit"). Upon receipt of such
notice, the Partnership shall provide the Director of Banking
and Finance of the State of Nebraska an affidavit which states
that there have been no material omissions or changes in the
financial condition of the Partnership or other changes of
circumstance, that would render the Pennsylvania/Nebraska
Required Capital inadequate to finance the Partnership's
proposed plan of operations or business, or render the
representations in the Partnership's registration statement,
as amended through such time, fraudulent, false or misleading
(the "Partnership Affidavit"). Five days after the Escrow
Agent Affidavit and the Partnership Affidavit have been
provided to the Director of Banking and Finance of the State
of Nebraska, the Escrow Agent shall (A) disburse to the
Partnership, by check, ACH or wire transfer, the funds then in
the Pennsylvania/Nebraska Escrow Account representing the
gross purchase price for the Units, and (B) disburse to the
Pennsylvania Subscribers, the Nebraska Subscribers or the
Partnership, as applicable, any interest thereon pursuant to
the provisions of subparagraph 3(f). Following such
disbursements, the Escrow Agent shall close the
Pennsylvania/Nebraska Escrow Account, and thereafter any
Subscription Materials and instruments of payment received by
the Escrow Agent from Pennsylvania Subscribers and Nebraska
Subscribers shall be deposited directly to the Escrow Account
(or to the Partnership, if it has closed the Escrow Account,
as instructed in writing by the Partnership).
(iii) regardless of any closing of the Escrow Account, the
Partnership and the Dealer Manager shall continue to forward
instruments of payment and Subscription Materials received
from New York Subscribers for deposit into the New York Escrow
Account to the Escrow Agent until such time as the Partnership
notifies the Escrow Agent in writing that total subscription
proceeds (including the amount then in the New York Escrow
Account) equal or exceed the New York Required Capital. Upon
receipt of a written notice from the Partnership that total
subscription proceeds (including the amount then in the New
York Escrow Account) equaling or exceeding the New York
Required Capital have been received in collected funds, the
Escrow Agent shall (A) disburse to the Partnership, by check,
ACH or wire transfer, the funds then in the New York Escrow
Account representing the gross purchase price for the Units,
and (B) disburse to the New York Subscribers or the
Partnership, as applicable, any interest thereon pursuant to
the provisions of subparagraph 3(f). Following such
disbursements, the Escrow Agent shall close the New York
Escrow Account, and thereafter any Subscription Materials and
instruments of payment received by the Escrow Agent from New
York Subscribers shall be deposited directly to the Escrow
Account (or to the Partnership, if it has closed the Escrow
Account, as instructed in writing by the Partnership).
(b) At the close of business on February 19, 2004 (the "Expiration
Date"), the Escrow Agent shall promptly notify the Partnership if it is
not in receipt of evidence of Subscription Materials accepted on or
before the Expiration Date, and instruments of payment dated not later
than that the Expiration Date, for the purchase of Units providing for
total purchase proceeds that equal or exceed the Required Capital (from
all sources but exclusive of any funds received from subscriptions for
Units from entities which the Partnership has notified the Escrow Agent
are affiliated with the Partnership). In the event the Escrow Agent is
not in possession of an executed IRS Form W-9 from any Subscriber, the
Partnership shall provide the Escrow Agent an executed IRS Form W-9
from such Subscriber within ten (10) calendar days after such notice.
On the tenth (10th) day following the receipt of such notice, the
Escrow Agent shall promptly return directly to each Subscriber the
collected funds deposited in the Escrow Account, the
Pennsylvania/Nebraska Escrow Account, and the New York Escrow Account
on behalf of such Subscriber (unless earlier disbursed in accordance
with paragraph 3(c)), or shall return the instruments of payment
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delivered, but not yet processed for collection prior to such time,
together with interest in the amounts calculated pursuant to paragraph
7 for each Subscriber at the address provided by the Dealer Manager or
the Partnership. In the event an executed IRS Form W-9 is not received
for each Subscriber within ten (10) calendar days, the Escrow Agent
shall thereupon remit an amount to the Subscribers in accordance with
the provisions hereof, withholding thirty percent (30%) of any interest
income on subscription proceeds (determined in accordance with
paragraph 7) attributable to those Subscribers for whom the Escrow
Agent does not possess an executed IRS Form W-9. However, the Escrow
Agent shall not be required to remit any payments until funds
represented by such payments have been collected.
(c) Notwithstanding subparagraphs 3(a) and 3(b) above, if the
Escrow Agent is not in receipt of evidence of subscriptions accepted on
or before the close of business on such date that is 120 days after
commencement of the Offering (the Partnership will notify the Escrow
Agent of the commencement date of the Offering) (the "Initial Escrow
Period"), and instruments of payment dated not later than that date,
for the purchase of Units providing for total purchase proceeds from
all nonaffiliated sources that equal or exceed the
Pennsylvania/Nebraska Required Capital, the Escrow Agent shall promptly
notify the Partnership. Thereafter, the Partnership shall send to each
Pennsylvania Subscriber and each Nebraska Subscriber by certified mail
within ten (10) calendar days after the end of the Initial Escrow
period a notification in the form of Exhibit A. If, pursuant to such
notification, a Pennsylvania Subscriber or a Nebraska Subscriber
requests the return of his or her subscription funds within ten (10)
calendar days after receipt of the notification (the "Request Period")
and the Escrow Agent is not in possession of an executed IRS form W-9,
the Partnership shall provide the Escrow Agent with an executed IRS
Form W-9 from each such Pennsylvania Subscriber or Nebraska Subscriber,
as the case may be, within ten (10) calendar days after receiving
notice from such Pennsylvania Subscriber or Nebraska Subscriber. The
Escrow Agent shall promptly refund directly to each Pennsylvania
Subscriber or Nebraska Subscriber, as the case may be, the collected
funds deposited in the Pennsylvania/Nebraska Escrow Account on behalf
of such Pennsylvania Subscriber or Nebraska Subscriber, or shall return
the instruments of payment delivered, but not yet processed for
collection prior to such time, to the address provided by the Dealer
Manager or the Partnership, together with interest income in the
amounts calculated pursuant to paragraph 7. If an executed IRS Form W-9
is not received for such Pennsylvania Subscriber or Nebraska Subscriber
within ten (10) calendar days, the Escrow Agent shall thereupon remit
an amount to such Pennsylvania Subscriber or Nebraska Subscriber, as
the case may be, in accordance with the provisions hereof, withholding
thirty percent (30%) of any interest income earned on subscription
proceeds (determined in accordance with paragraph 7) attributable to
such Pennsylvania Subscriber or Nebraska Subscriber for whom the Escrow
Agent does not possess an executed IRS Form W-9. However, the Escrow
Agent shall not be required to remit such payments until funds
represented by such payments have been collected by the Escrow Agent.
(d) The subscription funds of Pennsylvania Subscribers and
Nebraska Subscribers who do not request the return of their
subscription funds within the Request Period shall remain in the
Pennsylvania/Nebraska Escrow Account for successive 120-day escrow
periods (a "Successive Escrow Period"), each commencing automatically
upon the termination of the prior Successive Escrow Period, and the
Partnership and Escrow Agent shall follow the notification and payment
procedure set forth in subparagraph 3(c) above with respect to the
Initial Escrow Period for each Successive Escrow Period until the
occurrence of the earliest of (i) the Expiration Date, (ii) the receipt
and acceptance by the Partnership of subscriptions for the purchase of
Units with total purchase proceeds that equal or exceed the
Pennsylvania/Nebraska Required Capital and the disbursement of the
Pennsylvania/Nebraska Escrow Account on the terms specified herein, or
(iii) all funds held in the Pennsylvania/Nebraska Escrow Account having
been returned to the Pennsylvania Subscribers and Nebraska Subscribers
in accordance with the provisions hereof.
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(e) If the Partnership rejects any subscription for which the
Escrow Agent has collected funds, the Escrow Agent shall, upon the
written request of the Partnership, promptly issue a refund to the
rejected Subscriber. If the Partnership rejects any subscription for
which the Escrow Agent has not yet collected funds but has submitted
the Subscriber's check for collection, the Escrow Agent shall promptly
return the funds in the amount of the Subscriber's check to the
rejected Subscriber after such funds have been collected. If the Escrow
Agent has not yet submitted a rejected Subscriber's check for
collection, the Escrow Agent shall promptly remit the Subscriber's
check directly to the Subscriber.
(f) At any time after funds are disbursed upon the Partnership's
acceptance of subscriptions pursuant to subparagraph 3(a) above on the
tenth (10th) day following the date of such acceptance, the Escrow
Agent shall promptly provide directly to each Subscriber the amount of
the interest payable to the Subscribers; provided that the Escrow Agent
is in possession of such Subscriber's executed IRS Form W-9. In the
event the Escrow Agent is not in possession of an executed IRS Form W-9
from any Subscriber, the Partnership shall provide the Escrow Agent
with an executed IRS Form W-9 from such Subscriber within ten (10)
calendar days after acceptance of such subscription. In the event an
executed IRS Form W-9 is not received for each Subscriber within such
period, the Escrow Agent shall remit an amount to the Subscribers in
accordance with the provisions hereof, withholding thirty percent (30%)
of any interest income on subscription proceeds (determined in
accordance with paragraph 7) attributable to those Subscribers for whom
the Escrow Agent does not possess an executed IRS Form W-9. However,
the Escrow Agent shall not be required to remit any payments until
funds represented by such payments have been collected by the Escrow
Agent. The forgoing notwithstanding, interest, if any, earned on
accepted subscription proceeds will be payable to a Subscriber only if
the Subscriber's funds have been held in escrow by the Escrow Agent for
at least 35 days; interest, if any, earned on accepted subscription
proceeds of Subscribers' funds held less than 35 days will be payable
to the Partnership.
In the event that instruments of payment are returned for nonpayment,
the Escrow Agent is authorized to debit the Escrow Account, the
Pennsylvania/Nebraska Escrow Account, or the New York Escrow Account, as
applicable, in accordance with paragraph 2 hereof.
4. The Escrow Agent shall report to the Partnership weekly on the account
balances in the Escrow Account, the Pennsylvania/Nebraska Escrow Account, and
the New York Escrow Account and the activity in each account since the last
report.
5. Prior to the disbursement of funds deposited in the Escrow Account, the
Pennsylvania/Nebraska Escrow Account, or the New York Escrow Account in
accordance with the provisions of paragraph 3 hereof, the Escrow Agent shall
invest all of the funds deposited as well as earnings and interest derived
therefrom in the Escrow Account, the Pennsylvania/Nebraska Escrow Account, and
the New York Escrow Account, as applicable, in the "Short-Term Investments"
specified below, unless the costs to the Partnership for the making of such
investment are reasonably expected to exceed the anticipated interest earnings
from such investment in which case the funds and interest thereon shall remain
in the respective escrow account until the balance in the respective escrow
account reaches the minimum amount necessary for the anticipated interest
earnings from such investment to exceed the costs to the Partnership for the
making of such investment, as determined by the Partnership based upon
applicable interest rates.
"Short-Term Investments" include obligations of, or obligations
guaranteed by, the United States government or bank money-market accounts or
certificates of deposit of national or state banks that have deposits insured by
the Federal Deposit Insurance Corporation (including certificates of deposit of
any bank acting as a depository or custodian for any such funds) which mature on
or before the Expiration Date, unless such instrument cannot be readily sold or
otherwise disposed of for cash by the Expiration Date without any dissipation of
the offering proceeds invested. Without limiting the generality of the
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foregoing, Exhibit B hereto sets forth specific Short-Term Investments which
shall be deemed permissible investments hereunder.
The following securities are not permissible investments:
(a) money market mutual funds;
(b) corporate equity or debt securities;
(c) repurchase agreements;
(d) bankers' acceptances;
(e) commercial paper; and
(f) municipal securities.
It is hereby expressly agreed and stipulated by the parties hereto that the
Escrow Agent shall not be required to exercise any discretion hereunder and
shall have no investment or management responsibility and, accordingly, shall
have no duty to, or liability for its failure to, provide investment
recommendations or investment advice to the parties hereto. It is the intention
of the parties hereto that the Escrow Agent shall never be required to use,
advance or risk its own funds or otherwise incur financial liability in the
performance of any of its duties or the exercise of any of its rights and powers
hereunder.
6. The Escrow Agent is entitled to rely upon written instructions received
from the Partnership, unless the Escrow Agent has actual knowledge that such
instructions are not valid or genuine; provided that, if in the Escrow Agent's
opinion, any instructions from the Partnership are unclear, the Escrow Agent may
request clarification from the Partnership prior to taking any action, and if
such instructions continue to be unclear, the Escrow Agent may rely upon written
instructions from the Partnership's legal counsel in distributing or continuing
to hold any funds. However, the Escrow Agent shall not be required to disburse
any funds attributable to instruments of payment that have not been processed
for collection, until such funds are collected and then shall disburse such
funds in compliance with the disbursement instructions from the Partnership.
7. If the Offering terminates prior to receipt of the Required Capital or
one or more Pennsylvania Subscribers or Nebraska Subscribers elects to have his
or her subscription returned in accordance with paragraph 3, interest income
earned on subscription proceeds deposited in the Escrow Account (the "Escrow
Income"), the Pennsylvania/Nebraska Escrow Account (the "Pennsylvania/Nebraska
Escrow Income"), and the New York Escrow Account (the "New York Escrow Income")
shall be remitted to Subscribers, or to the Partnership if the applicable
Subscriber's funds have been held in escrow by the Escrow Agent for less than 35
days, in accordance with paragraph 3 and without any deductions for escrow
expenses. For each Subscriber who has invested funds that have been held in
escrow by the Escrow Agent for at least 35 days, such Subscriber's pro rata
portion of Escrow Income, Pennsylvania/Nebraska Escrow Income, or New York
Escrow Income, as applicable, shall be determined as follows: the total amount
of Escrow Income (or Pennsylvania/Nebraska Escrow Income or New York Escrow
Income, as appropriate) minus interest earned on accepted subscription proceeds
held by the Escrow Agent for less than 35 days shall be multiplied by a
fraction, (i) the numerator of which is determined by multiplying the number of
Units purchased by said Subscriber times the number of days said Subscriber's
proceeds are held in the Escrow Account, the Pennsylvania/Nebraska Escrow
Account, or the New York Escrow Account, as applicable, prior to the date of
disbursement, and (ii) the denominator of which is the total of the numerators
for all Subscribers in such account who have invested funds that have been held
in escrow by the Escrow Agent for at least 35 days. The Partnership shall
reimburse the Escrow Agent for all escrow expenses. The Escrow Agent shall remit
all such Escrow Income, Pennsylvania/Nebraska Escrow Income, and New York Escrow
Income in accordance with paragraph 3. If the Partnership chooses to leave the
Escrow Account open after receiving the Required Capital, then it shall make
regular acceptances of subscriptions therein, but no less frequently than
monthly, and the Escrow Income from the last such acceptance shall be calculated
and remitted to the Subscribers or the Partnership, as applicable, pursuant to
the provisions of paragraph 3(f).
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8. The Escrow Agent shall receive compensation from the Partnership as set
forth in Exhibit C attached hereto.
9. In performing any of its duties hereunder, the Escrow Agent shall not
incur any liability to anyone for any damages, losses, or expenses, except for
willful misconduct, breach of trust, or gross negligence. Accordingly, the
Escrow Agent shall not incur any such liability with respect to any action taken
or omitted (a) in good faith upon advice of the Escrow Agent's counsel given
with respect to any questions relating to the Escrow Agent duties and
responsibilities under this Agreement, or (b) in reliance upon any instrument,
including any written instrument or instruction provided for in this Agreement,
not only as to its due execution and validity and effectiveness of its
provisions but also as to the truth and accuracy of information contained
therein, which the Escrow Agent shall in good faith believe to be genuine, to
have been signed or presented by a proper person or persons and to conform to
the provisions of this Agreement.
10. The Partnership hereby agrees to indemnify and hold the Escrow Agent
harmless against any and all losses, claims, damages, liabilities, and expenses,
including reasonable attorneys' fees and disbursements, that may be imposed on
or incurred by the Escrow Agent in connection with acceptance of appointment as
the Escrow Agent hereunder, or the performance of the duties hereunder,
including any litigation arising from this Agreement or involving the subject
matter hereof, except where such losses, claims, damages, liabilities, and
expenses result from willful misconduct, breach of trust, or gross negligence.
11. In the event of a dispute between the parties hereto sufficient in the
Escrow Agent's discretion to justify doing so, the Escrow Agent shall be
entitled to tender into the registry or custody of any court of competent
jurisdiction all money or property in its hands under this Agreement, together
with such legal pleadings as deemed appropriate, and thereupon be discharged
from all further duties and liabilities under this Agreement. In the event of
any uncertainty as to the duties hereunder, the Escrow Agent may refuse to act
under the provisions of this Agreement pending order of a court of competent
jurisdiction and shall have no liability to the Partnership or to any other
person as a result of such action. Any such legal action may be brought in such
court as the Escrow Agent shall determine to have jurisdiction thereof. The
filing of any such legal proceedings shall not deprive the Escrow Agent of its
compensation earned prior to such filing.
12. All communications and notices required or permitted by this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or by messenger or by overnight delivery service or when received via
telecopy or other electronic transmission, in all cases addressed to the person
for whom it is intended at such person's address set forth below or to such
other address as a party shall have designated by notice in writing to the other
party in the manner provided by this paragraph:
(a) if to the Partnership:
Behringer Harvard Mid-Term Value Enhancement Fund I LP
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, General Partner
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(b) if to the Dealer Manager:
Behringer Securities LP
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Chief Operating Officer of Harvard Property Trust,
LLC, General Partner
(c) if to the Escrow Agent:
Xxxxx Fargo Bank Iowa, National Association
000 Xxxxxx
X0000-000
Corporate Trust Services, XXX
Xxx Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: X.X. Xxxxx
Each party hereto may, from time to time, change the address to which notices to
it are to be delivered or mailed hereunder by notice in accordance herewith to
the other parties.
13. This Agreement shall be governed by the laws of the State of Texas as
to both interpretation and performance without regard to the conflict of laws
rules thereof.
14. The provisions of this Agreement shall be binding upon the legal
representatives, successors, and assigns of the parties hereto.
15. The Partnership and the Dealer Manager hereby acknowledge that Xxxxx
Fargo Bank Iowa, National Association is serving as Escrow Agent only for the
limited purposes herein set forth, and hereby agree that they will not represent
or imply that, by serving as Escrow Agent hereunder or otherwise, have
investigated the desirability or advisability of investment in the Partnership
or have approved, endorsed, or passed upon the merits of the Units or the
Partnership, nor shall they use the name of the Escrow Agent in any manner
whatsoever in connection with the offer or sale of the Units other than by
acknowledgment that is has agreed to serve as Escrow Agent for the limited
purposes herein set forth.
16. This Agreement and any amendment hereto may be executed by the parties
hereto in one or more counterparts, each of which shall be deemed to be an
original.
17. Except as otherwise required for subscription funds received from
Pennsylvania Subscribers, Nebraska Subscribers and New York Subscribers as
provided herein, in the event that the Escrow Agent receive instruments of
payment after the Required Capital has been received and the proceeds of the
Escrow Account have been distributed to the Partnership, the Escrow Agent is
hereby authorized to deposit such instruments of payment within one (1) business
day to any deposit account as directed by the Partnership. The application of
said funds into a deposit account or to forward such funds directly to the
Partnership, in either case directed by the Partnership, shall be a full
acquittance to the Escrow Agent, who shall not be responsible for the
application of said funds thereafter.
18. The Escrow Agent shall be bound only by the terms of this Escrow
Agreement and shall not be bound by or incur any liability with respect to any
other agreements or understanding between any other parties, whether or not the
Escrow Agent has knowledge of any such agreements or understandings.
19. Indemnification provisions set forth herein shall survive the
termination of this Agreement.
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20. In the event that any part of this Agreement is declared by any court
or other judicial or administrative body to be null, void, or unenforceable,
said provision shall survive to the extent it is not so declared, and all of the
other provisions of this Agreement shall remain in full force and effect.
21. Unless otherwise provided in this Agreement, final termination of this
Escrow Agreement shall occur on the date that all funds held in the Escrow
Account, the Pennsylvania/Nebraska Escrow Account and the New York Escrow
Account are distributed either (a) to the Partnership or to Subscribers and the
Partnership has informed the Escrow Agent in writing to close the Escrow
Account, the Pennsylvania/Nebraska Escrow Account and the New York Escrow
Account pursuant to paragraph 3 hereof or (b) to a successor escrow agent upon
written instructions from the Partnership.
22. The Escrow Agent has no responsibility for accepting, rejecting, or
approving subscriptions. The Escrow Agent shall complete an OFAC search, in
compliance with its policy and procedures, of each subscription check prior to
depositing the check in the Escrow Account, the Pennsylvania/Nebraska Escrow
Account or the New York Escrow Account and shall inform the Partnership if a
subscription check fails the OFAC search. The Dealer Manager shall provide a
copy of each subscription check in order that the Escrow Agent may perform such
OFAC search.
23. This Agreement shall not be modified, revoked, released, or terminated
unless reduced to writing and signed by all parties hereto, subject to the
following paragraph.
If, at any time, any attempt is made to modify this Agreement in a manner that
would increase the duties and responsibilities of the Escrow Agent or to modify
this Agreement in any manner which the Escrow Agent shall deem undesirable, or
at any other time, the Escrow Agent may resign by providing written notice to
the Partnership and until (a) the acceptance by a successor escrow agent as
shall be appointed by the Partnership; or (b) thirty (30) days after such
written notice has been given, whichever occurs sooner, the Escrow Agent's only
remaining obligation shall be to perform its duties hereunder in accordance with
the terms of the Agreement.
24. The Escrow Agent may resign at any time from its obligations under this
Escrow Agreement by providing written notice to the Partnership. Such
resignation shall be effective on the date specified in such notice, which shall
be not less than thirty (30) days after such written notice has been given. The
Escrow Agent shall have no responsibility for the appointment of a successor
escrow agent.
25. The Escrow Agent may be removed for cause by the Partnership by written
notice to the Escrow Agent effective on the date specified in such written
notice. The removal of the Escrow Agent shall not deprive the Escrow Agent of
its compensation earned prior to such removal.
[Signature page follows]
-9-
Agreed to as of the ____ day of February, 2003.
BEHRINGER HARVARD MID-TERM VALUE
ENHANCEMENT FUND I LP
By: _______________________________________
Xxxxxx X. Xxxxxxxxx, General Partner
BEHRINGER SECURITIES LP
By: Harvard Property Trust, LLC
Its General Partner
By: _______________________________________
Xxxxxx X. Xxxxxxx, III
Chief Operating Officer
The terms and conditions contained above are hereby accepted and agreed to by:
XXXXX FARGO BANK IOWA, NATIONAL ASSOCIATION, AS ESCROW AGENT
By: ________________________________
Name: ______________________________
Title: _____________________________
-10-
EXHIBIT A
[Form of Notice to Pennsylvania Subscribers and Nebraska Subscribers]
You have tendered a subscription to purchase units of limited partnership
interest of Behringer Harvard Mid-Term Value Enhancement Fund I LP (the
"Partnership"). Your subscription is currently being held in escrow. The
guidelines of the Pennsylvania Securities Commission do not permit the
Partnership to accept subscriptions from Pennsylvania residents until an
aggregate of $22,000,000 of gross offering proceeds have been received by the
Partnership. The Pennsylvania guidelines provide that until this minimum amount
of offering proceeds is received by the Partnership, every 120 days during the
offering period Pennsylvania Subscribers may request that their subscription be
returned. The Nebraska Securities Commission has imposed similar requirements on
the Partnership with respect to subscriptions from Nebraska residents.
If you wish to continue your subscription in escrow until the
Pennsylvania/Nebraska minimum subscription amount is received, nothing further
is required.
If you wish to terminate your subscription for the Partnership's units of
limited partnership interest and have your subscription returned please so
indicate below, sign, date, and return to the Escrow Agent, Xxxxx Fargo Bank
Iowa, National Association, at 000 Xxxxxx X0000-000, Corporate Trust Services,
XXX, Xxx Xxxxxx, Xxxx 00000.
I hereby terminate my prior subscription to purchase units of limited
partnership interest of Behringer Harvard Mid-Term Value Enhancement Fund I LP
and request the return of my subscription funds. I certify to Behringer Harvard
Mid-Term Value Enhancement Fund I LP that I am a resident of either Pennsylvania
or Nebraska.
Signature: _______________________________
Name: ____________________________________
(please print)
Date: ____________________________________
Please send the subscription refund to:
___________________________
___________________________
___________________________
EXHIBIT B
PERMISSIBLE ESCROW INVESTMENTS
(i) obligations issued or guaranteed by the United States or by any person
controlled or supervised by or acting as an instrumentality of the
United States pursuant to authority granted by Congress, or an
investment fund consisting of such obligations;
(ii) obligations issued or guaranteed by any state or political subdivision
thereof rated either: AA or higher or MIG 1 or higher, by Xxxxx'x
Investors Service, Inc.; or AA or higher or an equivalent, by Standard
& Poor's Corporation, both of New York, New York, or their successors;
(iii) commercial or finance paper which is rated either: Prime-1 or higher,
or an equivalent by Xxxxx'x Investors Service, Inc.; or A-1 or higher
or any equivalent by Standard & Poor's Corporation, both of New York,
New York, or their successors; or
(iv) certificates of deposit or time deposits of banks or trust companies,
organized under the laws of the United States or any state.
EXHIBIT C
ESCROW AGENT COMPENSATION
ASSUMPTIONS
- Receipt by Xxxxx Fargo of the
electronic transmission of subscriber data in a format
compatible with Xxxxx Fargo systems
- WF does not handle subscription documents or checks
- WF receives funds via deposit by issuer or its agent in the escrow account
or ACH/wires representing subscription funds
- Transfer agent sends WF copy of OFAC check
- Investment of Funds
- Monthly reporting
ACCEPTANCE FEE: $1,000.00
For initial services including examination of the Escrow Agent Agreement and all
supporting documents as well as database development. This is a one-time fee
payable upon the execution of the Escrow Agent Agreement.
ANNUAL ADMINISTRATION FEE: $3,000.00
This annual administration fee covers standard services required under the
documents. Also includes periodic disbursements to company. An additional charge
of $500 per subaccount will be billed for accounts opened in connection with
certain state regulations (estimate of 2-3). Transaction charges noted below
apply for certain responsibilities including payments to subscribers. This fee
is payable upon the execution of the Escrow Agreement and annually thereafter
for any 12-month period or portion thereof. This fee shall be reviewed at the
end of the first year and may be renegotiated in accordance with new volume
estimates.
TRANSACTION FEES:
Wire transfer of funds to investors $15.00 per item
Check transfer of funds to investors $15.00 per item
Receipt and posting of incoming wires No charge
Receipt and posting of incoming check No charge
Asset transactions (purchases/sales/calls/deposit/withdrawals, etc.) $25.00 per transaction
1099 INT Tax reporting $25.00 per form
ACH transfer of funds No charge
Electronic predetermined reports No charge
Interest calculations No charge
EXTRAORDINARY SERVICES:
Additional reasonable compensation will be charged for extraordinary services
based on the then current standard hourly charge. Extraordinary services
include, but are not limited to, attending escrow closings, processing
assignments of escrow interest, specialized reports (e.g., tax reporting other
than 1099s), unusual certifications, reviewing and accepting modifications or
amendments to the escrow agreement, and letter of credit draws, etc. You will be
informed in advance of Xxxxx Fargo's performance of services that are considered
extraordinary.
Any overdrafts caused by failed or incomplete wires of funds or failed or
incomplete securities deliveries will be reimbursable to Xxxxx Fargo Bank at
prime plus two percent (2%).
All out-of-pocket expenses incurred in the administration of the account,
including, but not limited to, postage, telephone charges, insurance,
photocopies, supplies, and legal fees with the exception of legal fees incurred
at the inception of the account, will be billed to the customer at cost.
Xxxxxxxx over 30 days past due are subject to a 1.5% per month late payment
penalty of the balance due.
