EXHIBIT 1.1
DEALER MANAGER DISTRIBUTION AGREEMENT
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP
Up to 44,000,000 Units of Limited Partnership Interest/$440.0 million
February ___, 2003
Behringer Securities LP
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Behringer Harvard Advisors I LP, a Texas limited partnership, and
Xxxxxx X. Xxxxxxxxx, as the general partners (the "General Partners") of
Behringer Harvard Mid-Term Value Enhancement Fund I LP, a Texas limited
partnership (the "Partnership"), propose that the Partnership issue and sell up
to 44,000,000 units of limited partnership interest ("Units") in the Partnership
for $10.00 per Unit, including 40,000,000 Units to be offered to the public and
4,000,000 Units to be offered pursuant to the Partnership's distribution
reinvestment plan. There shall be a minimum purchase by any one person of 100
Units (except as otherwise indicated in the Prospectus (as defined in Section
1.1 hereof) or in any letter or memorandum from the Partnership to Behringer
Securities LP (the "Dealer Manager")). Terms not defined herein shall have the
same meaning as in the Prospectus. In connection therewith, the Partnership
hereby agrees with you, the Dealer Manager, as follows:
1. Representations and Warranties of the Partnership
The Partnership represents and warrants to the Dealer Manager and each
dealer with whom the Dealer Manager has entered into or will enter into a
Selected Dealer Agreement in the form attached to this Agreement as Exhibit A
(said dealers being hereinafter called the "Dealers") that:
1.1 A registration statement with respect to the Partnership has been
prepared by the Partnership in accordance with applicable requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the applicable
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "SEC") promulgated thereunder, covering the Units. Such
registration statement, which includes a preliminary prospectus, was initially
filed with the SEC on or about September 27, 2002. Copies of such registration
statement and each amendment thereto have been or will be delivered to the
Dealer Manager. (The registration statement and prospectus contained therein, as
finally amended and revised at the effective date of the registration statement,
are respectively hereinafter referred to as the "Registration Statement" and the
"Prospectus," except that if the Prospectus first filed by the Partnership
pursuant to Rule 424(b) under the Securities Act shall differ from the
Prospectus, the term "Prospectus" shall also include the Prospectus filed
pursuant to Rule 424(b).)
1.2 The Partnership has been duly and validly organized and formed as a
limited partnership under the laws of the state of Texas, with the power and
authority to conduct its business as described in the Prospectus.
1.3 The Registration Statement and Prospectus comply with the
Securities Act and the Rules and Regulations and do not contain any untrue
statements of material facts or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; provided, however, that the foregoing provisions of this
Section 1.3 will not extend to such statements contained in or omitted from the
Registration Statement or Prospectus as are primarily within the knowledge of
the Dealer Manager or any of the Dealers and are based upon information
furnished by the Dealer Manager in writing to the Partnership specifically for
inclusion therein.
1.4 The Partnership intends to use the funds received from the sale of
the Units as set forth in the Prospectus.
1.5 No consent, approval, authorization or other order of any
governmental authority is required in connection with the execution or delivery
by the Partnership of this Agreement or the issuance and sale by the Partnership
of the Units, except such as may be required under the Securities Act or
applicable state securities laws.
1.6 There are no actions, suits or proceedings pending or to the
knowledge of the Partnership, threatened against the Partnership at law or in
equity or before or by any federal or state commission, regulatory body or
administrative agency or other governmental body, domestic or foreign, which
will have a material adverse effect on the business or property of the
Partnership.
1.7 The execution and delivery of this Agreement, the consummation of
the transactions herein contemplated and compliance with the terms of this
Agreement by the Partnership will not conflict with or constitute a default
under any charter, bylaw, indenture, mortgage, deed of trust, lease, rule,
regulation, writ, injunction or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Partnership, except to the extent that the enforceability of the indemnity
and/or contribution provisions contained in Section 4 of this Agreement may be
limited under applicable securities laws.
1.8 The Partnership has full legal right, power and authority to enter
into this Agreement and to perform the transactions contemplated hereby, except
to the extent that the enforceability of the indemnity and/or contribution
provisions contained in Section 4 of this Agreement may be limited under
applicable securities laws.
1.9 At the time of the issuance of the Units, the Units will have been
duly authorized and validly issued, and upon payment therefor, will be fully
paid and nonassessable and will conform to the description thereof contained in
the Prospectus, subject to the requirement that the limited partners do not
participate in the management or control of the business of the Partnership.
2. Covenants of the Partnership
The Partnership covenants and agrees with the Dealer Manager that:
2.1 It will, at no expense to the Dealer Manager, furnish the Dealer
Manager with such number of printed copies of the Registration Statement,
including all amendments and exhibits thereto, as the Dealer Manager may
reasonably request. It will similarly furnish to the Dealer Manager and others
designated by the Dealer Manager as many copies as the Dealer Manager may
reasonably request in connection with the offering of the Units of: (a) the
Prospectus in preliminary and final form and every form of supplemental or
amended prospectus; (b) this Agreement; and (c) any other printed sales
literature or other materials (provided that the use of said sales literature
and other materials has been first approved for use by the Partnership and all
appropriate regulatory agencies).
2.2 It will furnish such proper information and execute and file such
documents as may be necessary for the Partnership to qualify the Units for offer
and sale under the securities laws of such jurisdictions as the Dealer Manager
may reasonably designate and will file and make in each year such
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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
44,000,000 Units through Dealers, all of whom shall be members of the National
Association of Securities Dealers, Inc. (the "NASD"). The Dealer Manager may
also sell Units for cash directly to its own clients and customers at the public
offering price and subject to the terms and conditions stated in the Prospectus.
The Dealer Manager hereby accepts such agency and distributorship and agrees to
use its best efforts to sell the Units on said terms and conditions. The Dealer
Manager represents to the Partnership that (i) it is a member of the NASD; (ii)
it and its employees and representatives have all required licenses and
registrations to act under this Agreement; and (iii) it has established and
implemented anti-money laundering compliance programs in accordance with
applicable law, including applicable NASD rules, SEC rules and the USA PATRIOT
Act of 2001, reasonably expected to detect and cause the reporting of suspicious
transactions in connection with the sale of Units of the Partnership. The Dealer
Manager agrees to be bound by the terms of the Escrow Agreement executed as of
February ___, 2003 among Xxxxx Fargo Bank Iowa, National Association, as escrow
agent, the Dealer Manager and the Partnership, a copy of which is enclosed (the
"Escrow Agreement").
3.2 Promptly after the effective date of the Registration Statement,
the Dealer Manager and the Dealers shall commence the offering of the Units for
cash to the public in jurisdictions in which the Units are registered or
qualified for sale or in which such offering is otherwise permitted. The Dealer
Manager and the Dealers will suspend or terminate offering of the Units upon
request of the Partnership at any time and will resume offering the Units upon
subsequent request of the Partnership.
3.3 Except as provided in the "Plan of Distribution" Section of the
Prospectus, as compensation for the services rendered by the Dealer Manager, the
Partnership agrees that it will pay to the Dealer Manager selling commissions in
the amount of 7% of the gross proceeds of the Units sold plus a dealer manager
fee in the amount of 2.5% of the gross proceeds of the Units sold.
Notwithstanding the foregoing, no commissions, payments or amount whatsoever
will be paid to the Dealer Manager under this Section 3.3 unless or until the
gross proceeds of the Units sold are disbursed to the Partnership pursuant to
paragraph 3(a) of the Escrow Agreement. Until the Required Capital,
Pennsylvania/Nebraska Required Capital or New York Required Capital, as
applicable and as defined in the Escrow Agreement, is obtained, investments will
be held in escrow and, if the Required Xxxxxxx, Xxxxxxxxxxxx/Xxxxxxxx
0
Required Capital or New York Required Capital, as applicable, is not obtained,
investments will be returned to the investors in accordance with the Prospectus.
The Partnership will not be liable or responsible to any Dealer for direct
payment of commissions to such Dealer, it being the sole and exclusive
responsibility of the Dealer Manager for payment of commissions to Dealers.
Notwithstanding the above, at the discretion of the General Partners, the
Partnership may act as agent of the Dealer Manager by making direct payment of
commissions to such Dealers without incurring any liability therefor. With
respect to Units sold pursuant to the Partnership's distribution reinvestment
plan, the Dealer Manager agrees to reduce its dealer manager fee to 1.0% of the
gross proceeds of the Units sold pursuant to the distribution reinvestment plan.
3.4 The Dealer Manager represents and warrants to the Partnership, the
General Partners and each person and firm that signs the Registration Statement
that the information under the caption "Plan of Distribution" in the Prospectus
and all other information furnished to the Partnership by the Dealer Manager in
writing expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus, or any amendment or supplement thereto does not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
3.5 The Dealer Manager shall use and distribute in conjunction with the
offer and sale of any Units only the Prospectus and such sales literature and
advertising as shall have been previously approved in writing by the
Partnership.
3.6 The Dealer Manager shall cause Units to be offered and sold only in
those jurisdictions specified in writing by the Partnership for whose account
Units are then offered for sale, and such list of jurisdictions shall be updated
by the Partnership as additional states are added. The Partnership shall specify
only such jurisdictions in which the offering and sale of its Units has been
authorized by appropriate state regulatory authorities. No Units shall be
offered or sold for the account of the Partnership in any other states.
3.7 The Dealer Manager represents and warrants to the Partnership that
it will not represent or imply that the escrow agent, as identified in the
Prospectus, has investigated the desirability or advisability of investment in
the Partnership, or has approved, endorsed or passed upon the merits of the
Units or the Partnership, nor will it use the name of said escrow agent in any
manner whatsoever in connection with the offer or sale of the Units other than
by acknowledgment that it has agreed to serve as escrow agent.
4. Indemnification
4.1 The Partnership will indemnify and hold harmless the Dealers and
the Dealer Manager, their officers and directors and each person, if any, who
controls such Dealer or Dealer Manager within the meaning of Section 15 of the
Securities Act from and against any losses, claims, damages or liabilities,
joint or several, to which such Dealers or the Dealer Manager, their officers
and directors, or such controlling person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (a)
any untrue statement or alleged untrue statement of a material fact contained
(i) in any Registration Statement (including the Prospectus as a part thereof)
or any post-effective amendment thereto or in the Prospectus or any amendment or
supplement to the Prospectus or (ii) in any blue sky application or other
document executed by the Partnership or on its behalf specifically for the
purpose of qualifying any or all of the Units for sale under the securities laws
of any jurisdiction or based upon written information furnished by the
Partnership under the securities laws thereof (any such application, document or
information being hereinafter called a "Blue Sky Application"), or (b) the
omission or alleged omission to state in the Registration Statement (including
the Prospectus as a part thereof) or any post-effective amendment thereof or in
any Blue Sky Application a material fact required to be stated therein or
necessary to make
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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 and directors, or such controlling person in connection
with investigating or defending such loss, claim, damage, liability or action;
provided that the Partnership will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of, or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the General Partners, the Partnership or the Dealer Manager by or on behalf of
any Dealer or Dealer Manager specifically for use with reference to such Dealer
or Dealer Manager in the preparation of the Registration Statement or any such
post-effective amendment thereof, any such Blue Sky Application or any such
preliminary prospectus or the Prospectus or any such amendment thereof or
supplement thereto; and further provided that the Partnership will not be liable
in any such case if it is determined that such Dealer or Dealer Manager was at
fault in connection with the loss, claim, damage, liability or action.
Notwithstanding the foregoing, the Partnership may not indemnify or hold
harmless the Dealer Manager, any Dealer or any of their affiliates in any manner
that would be inconsistent with the provisions of Section II.D. of the Statement
of Policy Regarding Real Estate Programs of the North American Securities
Administrators Association, Inc. effective January 1, 1993, as amended. In
particular, but without limitation, the Partnership may not indemnify or hold
harmless the Dealer Manager, any Dealer or any of their affiliates for
liabilities arising from or out of a violation of state or federal securities
laws, unless one or more of the following conditions are met:
(a) there has been a successful adjudication on the merits of each
count involving alleged securities law violations;
(b) such claims have been dismissed with prejudice on the merits
by a court of competent jurisdiction; or
(c) a court of competent jurisdiction approves a settlement of the
claims against the indemnitee and finds that indemnification
of the settlement and the related costs should be made, and
the court considering the request for indemnification has been
advised of the position of the SEC and of the published
position of any state securities regulatory authority in which
the securities were offered as to indemnification for
violations of securities laws.
4.2 The Dealer Manager will indemnify and hold harmless the
Partnership, the General Partners and each person or firm which has signed the
Registration Statement and each person, if any, who controls the Partnership
within the meaning of Section 15 of the Securities Act, from and against any
losses, claims, damages or liabilities to which any of the aforesaid parties may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (a) any untrue statement of a material fact contained (i) in the
Registration Statement (including the Prospectus as a part thereof) or any
post-effective amendment thereof or (ii) any Blue Sky Application, or (b) the
omission to state in the Registration Statement (including the Prospectus as a
part thereof) or any post-effective amendment thereof or in any Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (c) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, if
used prior to the effective date of the Registration Statement, or in the
Prospectus, or in any amendment or supplement to the Prospectus or the omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein in the light of the circumstances under
which they were made not misleading in each case to the extent, but only to
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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,
or (e) any failure to comply with applicable laws governing money laundry
abatement and anti-terrorist financing efforts, including applicable NASD rules,
SEC rules and the USA PATRIOT Act of 2001, and will reimburse the aforesaid
parties, in connection with investigation or defending such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which the Dealer Manager may otherwise have.
4.3 Each Dealer severally will indemnify and hold harmless the
Partnership, the Dealer Manager, the General Partners and each of their partners
and such partners' directors (including any persons named in any of the
Registration Statements with his consent, as about to become a director), each
of their officers who has signed any of the Registration Statements and each
person, if any, who controls the Partnership and the Dealer Manager or the
General Partners within the meaning of Section 15 of the Securities Act from and
against any losses, claims, damages or liabilities to which the Partnership, the
Dealer Manager, the General Partners, any such director or officer, or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (a) any untrue statement or alleged
untrue statement of a material fact contained (i) in the Registration Statement
(including the Prospectus as a part thereof) or any post-effective amendment
thereof or (ii) in any Blue Sky Application, or (b) the omission or alleged
omission to state in the Registration Statement (including the Prospectus as a
part thereof or any post-effective amendment thereof or in any Blue Sky
Application a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (c) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, if
used prior to the effective date of the Registration Statement, or in the
Prospectus, or in any amendment or supplement to the Prospectus or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Partnership or the Dealer
Manager by or on behalf of such Dealer specifically for use with reference to
such Dealer in the preparation of the Registration Statement or any such
post-effective amendments thereof or any such Blue Sky Application or any such
preliminary prospectus or the Prospectus or any such amendment thereof or
supplement thereto, or (d) any unauthorized use of sales materials or use of
unauthorized verbal representations concerning the Units by such Dealer or
Dealer's representations or agents in violation of Section VII of the Selected
Dealer Agreement or otherwise, or (e) any failure to comply with applicable laws
governing money laundry abatement and anti-terrorist financing efforts,
including applicable NASD rules, SEC rules and the USA PATRIOT Act of 2001, and
will reimburse the Partnership, the Dealer Manager and the General Partners and
any such directors or officers, or controlling person, in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which such Dealer
may otherwise have.
4.4 Promptly after receipt by an indemnified party under this Section 4
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 4, notify in writing the indemnifying party of the commencement thereof
and the omission so to notify the indemnifying party will relieve such
indemnifying party from any liability under this Section 4 as to the particular
item for which indemnification is then being sought, but not from any other
liability which it may have to any indemnified party. In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled, to the extent
it
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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.
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.
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8. Successors and Amendment
8.1 This Agreement shall inure to the benefit of and be binding upon
the Dealer Manager, the General Partners, the Partnership and their respective
successors. Nothing in this Agreement is intended or shall be construed to give
to any other person any right, remedy or claim, except as otherwise specifically
provided herein. This Agreement shall inure to the benefit of the Dealers to the
extent set forth in Sections 1 and 4 hereof.
8.2 This Agreement may be amended by the written agreement of the
Dealer Manager and the Partnership, and, as to Sections 3.3, 4 and 10, the
General Partners.
9. Term
This Agreement may be terminated by either party (i) immediately upon
notice to the other party in the event that the other party shall have
materially failed to comply with any of the material provisions of this
Agreement on its part to be performed during the term of this Agreement or if
any of the representations, warranties, covenants or agreements of such party
contained herein shall not have been materially complied with or satisfied
within the times specified or (ii) by either party on 60 days' written notice.
In any case, this Agreement shall expire at the close of business on
the effective date that the Offering is terminated. The provisions of Section 4
hereof shall survive such termination. In addition, the Dealer Manager, upon the
expiration or termination of this Agreement, shall (i) promptly deposit any and
all funds in its possession which were received from investors for the sale of
Units into the appropriate escrow account or, if the minimum number of Units
have been sold and accepted by the Partnership, into such other account as the
Partnership may designate; and (ii) promptly deliver to the Partnership all
records and documents in its possession which relate to the Offering and are not
designated as dealer copies. The Dealer Manager, at its sole expense, may make
and retain copies of all such records and documents, but shall keep all such
information confidential. The Dealer Manager shall use its best efforts to
cooperate with the Partnership to accomplish an orderly transfer of management
of the Offering to a party designated by the Partnership. Upon expiration or
termination of this Agreement, the Partnership shall pay to the Dealer Manager
all commissions to which the Dealer Manager is or becomes entitled under Section
3 at such time as such commissions become payable.
10. Confirmation
The General Partners hereby agree and assume the duty to confirm on
their behalf and on behalf of dealers or brokers who sell the Units all orders
for purchase of Units accepted by the Partnership. Such confirmations will
comply with the rules of the SEC and the NASD, and will comply with applicable
laws of such other jurisdictions to the extent the General Partners are advised
of such laws in writing by the Dealer Manager.
11. Suitability of Investors
The Dealer Manager will offer Units, and in its agreements with Dealers
will require that the Dealers offer Units, only to persons who meet the
financial qualifications set forth in the Prospectus or in any suitability
letter or memorandum sent to it by the Partnership and will only make offers to
persons in the states in which it is advised in writing that the Units are
qualified for sale or that such qualification is not required. In offering
Units, the Dealer Manager will, and in its agreements with Dealers, the Dealer
Manager will, require that the Dealer comply with the provisions of the Conduct
Rules contained in Sections 2000-3400 of the NASD Manual (the "NASD Conduct
Rules"), including the provisions in Rule 2810 that apply to Direct
Participation Programs, as well as all other applicable rules and regulations
relating to suitability of investors, including without limitation, the
provisions of Article III.C. of the
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Statement of Policy Regarding Real Estate Programs of the North American
Securities Administrators Association, Inc.
12. Submission of Orders
12.1 Those persons who purchase Units will be instructed by the Dealer
Manager or the Dealer to make their checks payable to "Xxxxx Fargo Bank Iowa,
N.A., as escrow agent for Behringer Harvard Mid-Term Value Enhancement Fund I
LP." The Dealer Manager and any Dealer receiving a check not conforming to the
foregoing instructions shall return such check directly to such subscriber not
later than the end of the next business day following its receipt. Checks
received by the Dealer Manager or Dealer which conform to the foregoing
instructions shall be transmitted for deposit pursuant to one of the methods
described in this Section 12. Transmittal of received investor funds will be
made in accordance with the following procedures. The Dealer Manager may
authorize certain Dealers which are "$250,000 broker-dealers" to instruct their
customers to make their checks for Units subscribed for payable directly to the
Dealer. In such case, the Dealer will collect the proceeds of the subscribers'
checks and issue a check for the aggregate amount of the subscription proceeds
made payable to the order of the escrow agent.
12.2 If a Dealer conducts its internal supervisory procedures at the
location where subscription documents and checks are initially received, the
Dealer shall forward (i) the subscription documents to the Dealer Manager and
(ii) the checks to the escrow agent by noon of the next business day following
receipt of the subscription documents and the check.
12.3 If a Dealer's internal supervisory procedures are to be performed
at a different location (the "Final Review Office"), the subscription documents
and check must be transmitted to the Final Review Office by the end of the next
business day following receipt of the subscription documents and check by the
Dealer. The Final Review Office will, by the next business day following receipt
of the subscription documents and check, forward both the subscription documents
and check to the Dealer Manager as processing broker-dealer in order that the
Dealer Manager may complete its review of the documentation and process the
subscription documents and check.
12.4 Any check received by the Dealer Manager directly or as processing
broker-dealer from the Dealers will, in all cases, be forwarded to the escrow
agent as soon as practicable, but in any event by the end of the second business
day following receipt by the Dealer Manager of the subscription documents and
check. Checks of rejected subscribers will be promptly returned to such
subscribers.
12.5 If requested by the Partnership, the Dealer Manager shall obtain,
and shall cause the Dealers to obtain, from subscribers for the Units, other
documentation reasonably deemed by the Partnership to be required under
applicable law or as may be necessary to reflect the policies of the
Partnership. Such documentation may include, without limitation, subscribers'
written acknowledgement and agreement to the privacy policies of the
Partnership.
9
13. Selected Investment Advisor Agreement.
With respect to any provision of information concerning the offering of the
Units by a selected investment advisor (the "Investment Advisor") presently
registered under the Investment Advisers Act of 1940, as amended, and presently
and appropriately registered in each state in which the Investment Advisor has
clients, the Partnership and the Investment Advisor shall enter into a Selected
Investment Advisor Agreement in substantially the form attached hereto as
Exhibit B.
14. 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 14.
[SIGNATURES ON FOLLOWING PAGES]
10
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
11
EXHIBIT A
SELECTED DEALER AGREEMENT
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP
Up to 44,000,000 Units of Limited Partnership Interest /$440.0 million
Ladies and Gentlemen:
Behringer Securities LP, as the dealer manager ("Dealer Manager") for
Behringer Harvard Mid-Term Value Enhancement Fund I LP (the "Partnership"), a
Texas limited partnership of which Behringer Harvard Advisors I LP, a Texas
limited partnership, and Xxxxxx X. Xxxxxxxxx serve as the general partners (the
"General Partners"), invites you (the "Dealer") to participate in the
distribution of units of limited partnership interest in the Partnership
("Units") subject to the following terms:
I. Dealer Manager Distribution Agreement
The Dealer Manager has entered into an agreement with the Partnership and the
General Partners called the Dealer Manager Distribution Agreement dated February
___, 2003, in the form attached hereto as Exhibit A (the "Dealer Manager
Agreement", the terms of the Dealer Manager Agreement relating to the Dealer are
incorporated herein by reference as if set forth verbatim and capitalized terms
not otherwise defined herein shall have the meanings given them in the Dealer
Manager Agreement). By your acceptance of this Agreement, you will become one of
the Dealers referred to in the Dealer Manager Agreement and will be entitled and
subject to the indemnification provisions contained in the Dealer Manager
Agreement, including the provisions of the Dealer Manager Agreement wherein the
Dealers severally agree to indemnify and hold harmless the Partnership, the
General Partners, the Dealer Manager and each officer and director thereof, and
each person, if any, who controls the Partnership, the General Partners or the
Dealer Manager within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). Except as otherwise specifically stated herein, all terms
used in this Agreement have the meanings provided in the Dealer Manager
Agreement. The Units are offered solely through broker-dealers who are members
of the National Association of Securities Dealers, Inc. (the "NASD").
Dealer hereby agrees to use its best efforts to sell the Units for cash on the
terms and conditions stated in the Prospectus. Nothing in this Agreement shall
be deemed or construed to make Dealer an employee, agent, representative or
partner of the Dealer Manager or of the Partnership, and Dealer is not
authorized to act for the Dealer Manager or the Partnership or to make any
representations on their behalf except as set forth in the Prospectus and such
other printed information furnished to Dealer by the Dealer Manager or the
Partnership to supplement the Prospectus ("supplemental information").
II. Submission of Orders
Those persons who purchase Units will be instructed by the Dealer to make their
checks payable to "Xxxxx Fargo Bank Iowa, N.A., as escrow agent for Behringer
Harvard Mid-Term Value Enhancement Fund I LP." Any Dealer receiving a check not
conforming to the foregoing instructions shall return such check directly to
such subscriber not later than the end of the next business day following its
receipt. Checks received by the Dealer which conform to the foregoing
instructions shall be transmitted for deposit pursuant to one of the methods in
this Article II. The Dealer Manager may authorize Dealer if Dealer is a
"$250,000 broker-dealer" to instruct its customers to make its checks for Units
subscribed for payable directly to the Dealer, in which case the Dealer will
collect the proceeds of the subscriber's checks and issue a check made payable
to the order of the escrow agent for the aggregate amount of the
subscription proceeds. Transmittal of received investor funds will be made in
accordance with the following procedures:
(a) If a Dealer conducts its internal supervisory procedures at
the location where subscription documents and checks are
initially received, the Dealer shall forward (i) the
subscription documents to the Dealer Manager and (ii) the
checks to the escrow agent by noon of the next business day
following receipt of the subscription documents and the check.
(b) If the internal supervisory procedures are to be performed at
a different location (the "Final Review Office"), the
subscription documents and check must be transmitted to the
Final Review Office by the end of the next business day
following receipt of the subscription documents and check by
the Dealer. The Final Review Office will, by the next business
day following receipt of the subscription documents and check,
forward both the subscription documents and check to the
Dealer Manager as processing broker-dealer in order that the
Dealer Manager may complete its review of the documentation
and process the subscription documents and check.
If requested by the Partnership or the Dealer Manager, the Dealer shall
obtain from subscribers for the Units, other documentation reasonably deemed by
the Partnership or the Dealer Manager to be required under applicable law or as
may be necessary to reflect the policies of the Partnership or the Dealer
Manager. Such documentation may include, without limitation, subscriber written
acknowledgement and agreement to the privacy policies of the Partnership or the
Dealer Manager.
III. Pricing
Units shall be offered to the public at the offering price of $10.00 per Unit,
payable in cash. Except as otherwise indicated in the Prospectus or in any
letter or memorandum sent to the Dealer by the Partnership or Dealer Manager, a
minimum initial purchase of 100 Units is required. Except as otherwise indicated
in the Prospectus, additional investments may be made in cash in minimal
increments of at least 2.5 Units. The Units are nonassessable, and limited
partners will not be required to contribute additional sums to the capital of
the Partnership. The Dealer hereby agrees to place any order for the full
purchase price.
IV. Dealers' Commissions
Except for discounts described in or as otherwise provided in the "Plan of
Distribution" Section of the Prospectus, the Dealer's selling commission
applicable to the total public offering price of Units sold by Dealer which it
is authorized to sell hereunder is 7% of the gross proceeds of Units sold by it
and accepted and confirmed by the General Partners, which commission will be
paid by the Dealer Manager. For these purposes, a "sale of Units" shall occur if
and only if a transaction has closed with a securities purchaser pursuant to all
applicable offering and subscription documents and the Partnership has
thereafter distributed the commission to the Dealer Manager in connection with
such transaction. The Dealer hereby waives any and all rights to receive payment
of commissions due until such time as the Dealer Manager is in receipt of the
commission from the Partnership. The Dealer affirms that the Dealer Manager's
liability for commissions payable is limited solely to the proceeds of
commissions receivable associated therewith. In addition, as set forth in the
Prospectus, the Dealer Manager may reallow out of its dealer manager fee a
marketing fee and due diligence expense reimbursement of up to 1.5% of the gross
proceeds of Units sold by Dealers participating in the offering of Units, based
on such factors as the number of Units sold by such participating Dealer, the
assistance of such participating Dealer in marketing the offering of Units, and
bona fide conference fees incurred.
2
Dealer acknowledges and agrees that no commissions, payments or amount
whatsoever will be paid to the Dealer unless or until the gross proceeds of the
Units sold are disbursed to the Partnership pursuant to paragraph 3(a) of the
Escrow Agreement. Until the Required Capital, Pennsylvania/Nebraska Required
Capital or New York Required Capital, as applicable and as defined in the Escrow
Agreement, is obtained, investments will be held in escrow and, if the Required
Capital, Pennsylvania/Nebraska Required Capital or New York Required Capital, as
applicable, is not obtained, investments will be returned to the investors in
accordance with the Prospectus.
The parties hereby agree that the foregoing commission is not in excess of the
usual and customary distributors' or sellers' commission received in the sale of
securities similar to the Units, that Dealer's interest in the offering is
limited to such commission from the Dealer Manager and Dealer's indemnity
referred to in Section 4 of the Dealer Manager Agreement, that the Partnership
is not liable or responsible for the direct payment of such commission to the
Dealer.
V. Payment
Payments of selling commissions will be made by the Dealer Manager (or by the
Partnership as provided in the Dealer Manager Agreement) to Dealer within 30
days of the receipt by the Dealer Manager of the gross commission payments from
the Partnership.
VI. Right to Reject Orders or Cancel Sales
All orders, whether initial or additional, are subject to acceptance by and
shall only become effective upon confirmation by the General Partners, and the
Partnership and the General Partners reserve the right to reject any order for
any or no reason. Orders not accompanied by a Subscription Agreement and
Signature Page and the required check in payment for the Units may be rejected.
Issuance and delivery of the Units will be made only after actual receipt of
payment therefor. If any check is not paid upon presentment, or if the
Partnership is not in actual receipt of clearinghouse funds or cash, certified
or cashier's check or the equivalent in payment for the Units within 15 days of
sale, the Partnership reserves the right to cancel the sale without notice. In
the event an order is rejected, canceled or rescinded for any reason, the Dealer
agrees to return to the Dealer Manager any commission theretofore paid with
respect to such order.
VII. Prospectus and Supplemental Information
Dealer is not authorized or permitted to give and will not give, any information
or make any representation concerning the Units except as set forth in the
Prospectus and supplemental information. The Dealer Manager will supply Dealer
with reasonable quantities of the Prospectus, any supplements thereto and any
amended Prospectus, as well as any supplemental information, for delivery to
investors, and Dealer will deliver a copy of the Prospectus and all supplements
thereto and any amended Prospectus to each investor to whom an offer is made
prior to or simultaneously with the first solicitation of an offer to sell the
Units to an investor. The Dealer agrees that it will not send or give any
supplements thereto and any amended Prospectus to that investor unless it has
previously sent or given a Prospectus and all supplements thereto and any
amended Prospectus to that investor or has simultaneously sent or given a
Prospectus and all supplements thereto and any amended Prospectus with such
supplemental information. Dealer agrees that it will not show or give to any
investor or prospective investor or reproduce any material or writing which is
supplied to it by the Dealer Manager and marked "dealer only" or otherwise
bearing a legend denoting that it is not to be used in connection with the sale
of Units to members of the public. Dealer agrees that it will not use in
connection with the offer or sale of Units any material or writing which relates
to another partnership supplied to it by the Partnership or the Dealer Manager
bearing a legend which states that such material may not be used in connection
with the offer or sale of
3
any securities other than the partnership to which it relates. Dealer further
agrees that it will not use in connection with the offer or sale of Units any
materials or writings which have not been previously approved by the Dealer
Manager. Each Dealer agrees, if the Dealer Manager so requests, to furnish a
copy of any revised preliminary Prospectus to each person to whom it has
furnished a copy of any previous preliminary Prospectus, and further agrees that
it will itself mail or otherwise deliver all preliminary and final Prospectuses
required for compliance with the provisions of Rule 15c2-8 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Regardless of the
termination of this Agreement, Dealer will deliver a Prospectus in transactions
in the Units for a period of 90 days from the effective date of the Registration
Statement or such longer period as may be required by the Exchange Act. On
becoming a Dealer, and in offering and selling Units, Dealer agrees to comply
with all the applicable requirements under the Securities Act and the Exchange
Act. Notwithstanding the termination of this Agreement or the payment of any
amount to Dealer, Dealer agrees to pay Dealer's proportionate share of any
claim, demand or liability asserted against Dealer and the other Dealers on the
basis that Dealers or any of them constitute an association, unincorporated
business or other separate entity, including in each case Dealer's proportionate
share of any expenses incurred in defending against any such claim, demand or
liability.
VIII. License and Association Membership
Dealer's acceptance of this Agreement constitutes a representation to the
Partnership and the Dealer Manager that Dealer is a properly registered or
licensed broker-dealer, duly authorized to sell Units under Federal and state
securities laws and regulations and in all states where it offers or sells
Units, and that it is a member in good standing of the NASD. This Agreement
shall automatically terminate if the Dealer ceases to be a member in good
standing of such association, or in the case of a foreign dealer, so to conform.
Dealer agrees to notify the Dealer Manager immediately if Dealer ceases to be a
member in good standing, or in the case of a foreign dealer, so to conform. The
Dealer Manager also hereby agrees to abide by the NASD Conduct Rules, including,
but not limited to, Rules 2730, 2740, 2420 and 2750, and the provisions in Rule
2810 that apply to Direct Participation Programs.
IX. Anti-Money Laundering Compliance Programs
Dealer represents to the Partnership and the Dealer Manager that Dealer has
established and implemented anti-money laundering compliance programs in
accordance with applicable law, including applicable NASD rules, SEC rules and
the USA PATRIOT Act of 2001, reasonably expected to detect and cause the
reporting of suspicious transactions in connection with the sale of Units of the
Partnership.
X. Limitation of Offer
Dealer will offer Units only to persons who meet the financial qualifications
set forth in the Prospectus or in any suitability letter or memorandum sent to
it by the Partnership or the Dealer Manager and will only make offers to persons
in the states in which it is advised in writing that the Units are qualified for
sale or that such qualification is not required. In offering Units, Dealer will
comply with the provisions of the NASD Conduct Rules, including the provisions
in Rule 2810 that apply to Direct Participation Programs, as well as all other
applicable rules and regulations relating to suitability of investors, including
without limitation, the provisions of Article III.C. of the Statement of Policy
Regarding Real Estate Programs of the North American Securities Administrators
Association, Inc.
XI. Termination
Dealer will suspend or terminate its offer and sale of Units upon the request of
the Partnership or the Dealer Manager at any time and will resume its offer and
sale of Units hereunder upon subsequent request
4
of the Partnership or the Dealer Manager. Any party may terminate this Agreement
by written notice. Such termination shall be effective 48 hours after the
mailing of such notice. This Agreement is the entire agreement of the parties
and supersedes all prior agreements, if any, between the parties hereto.
This Agreement may be amended at any time by the Dealer Manager by written
notice to the Dealer, and any such amendment shall be deemed accepted by Dealer
upon placing an order for sale of Units after he has received such notice.
XII. Privacy Laws
The Dealer Manager and Dealer (each referred to individually in this section as
"party") agree as follows:
(a) Each party agrees to abide by and comply with (i) the privacy standards and
requirements of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 ("GLB Act"), (ii) the
privacy standards and requirements of any other applicable Federal or state
law, and (iii) its own internal privacy policies and procedures, each as may be
amended from time to time.
(b) Each party agrees to refrain from the use or disclosure of nonpublic
personal information (as defined under the GLB Act) of all customers who have
opted out of such disclosures except as necessary to service the customers or
as otherwise necessary or required by applicable law; and
(c) Each party shall be responsible for determining which customers have opted
out of the disclosure of nonpublic personal information by periodically
reviewing and, if necessary, retrieving a list of such customers (the "List")
as provided by each to identify customers that have exercised their opt-out
rights. In the event either party uses or discloses nonpublic personal
information of any customer for purposes other than servicing the customer, or
as otherwise required by applicable law, that party will consult the List to
determine whether the affected customer has exercised his or her opt-out
rights. Each party understands that each is prohibited from using or disclosing
any nonpublic personal information of any customer that is identified on the
List as having opted out of such disclosures.
XIII. Notice
All notices will be in writing and will be duly given to the Dealer Manager when
mailed to 0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, and to
Dealer when mailed to the address specified by Dealer herein.
XIV. Attorneys' Fees, Applicable Law and Venue
In any action to enforce the provisions of this Agreement or to secure damages
for its breach, the prevailing party shall recover its costs and reasonable
attorney's fees. This Agreement shall be construed under the laws of the State
of Texas and shall take effect when signed by Dealer and countersigned by the
Dealer Manager. Venue for any action (including arbitration) brought hereunder
shall lie exclusively in Dallas, Texas.
[SIGNATURES ON FOLLOWING PAGES]
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on its behalf by its duly authorized agent.
THE DEALER MANAGER:
BEHRINGER SECURITIES LP
By: HARVARD PROPERTY TRUST, LLC
Its General Partner
By:
------------------------------
Xxxxxx X. Xxxxxxx, III
Chief Operating Officer
6
We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth. We hereby represent that the list below of
jurisdictions in which we are registered or licensed as a broker or dealer and
are fully authorized to sell securities is true and correct, and we agree to
advise you of any change in such list during the term of this Agreement.
1. Identity of Dealer:
Name:
--------------------------------------------------------------------------
Type of entity:
----------------------------------------------------------------
(corporation, partnership, proprietorship, etc.)
Organized in the State of:
-----------------------------------------------------
Licensed as broker-dealer in the following States:
Tax I.D. #:
--------------------------------------------------------------------
2. Person to receive notice pursuant to Section XIII:
Name:
--------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
City, State and Zip Code:
------------------------------------------------------
Telephone No.:
-----------------------------------------------------------------
Facsimile No.:
-----------------------------------------------------------------
7
AGREED TO AND ACCEPTED BY THE DEALER:
-------------------------------------------
(Dealer's Firm Name)
By:
---------------------------------------
Signature
Name:
-------------------------------------
Title:
------------------------------------
8
EXHIBIT B
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP
SELECTED INVESTMENT ADVISOR AGREEMENT
THIS SELECTED INVESTMENT ADVISOR AGREEMENT (the "Agreement") is made and entered
into as of the day indicated on Exhibit A attached hereto and by this reference
incorporated herein, between Behringer Harvard Mid-Term Value Enhancement Fund I
LP, a Texas limited partnership (the "Partnership"), and the selected investment
advisor (the "Investment Advisor") identified in Exhibit A hereto.
WHEREAS, the Partnership is offering up to 44,000,000 units of limited
partnership (the "Units") to the general public, pursuant to a public offering
(the "Offering") of the Units pursuant to a prospectus (the "Prospectus") filed
with the Securities and Exchange Commission (the "SEC"), 4,000,000 of which
Units are being offered pursuant to the Partnership's distribution reinvestment
plan (the "DRIP"); and
WHEREAS, the Investment Advisor is an entity, as designated in Exhibit A hereto,
organized and presently in good standing in the state or states designated in
Exhibit A hereto, presently registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and presently registered or
licensed as an investment advisor by the appropriate regulatory agency of each
state in which the Investment Advisor has clients, or exempt from such
registration requirements; and
WHEREAS, the Partnership has a currently effective registration statement on
Form S-11, including a final prospectus, for the registration of the Units under
the Securities Act of 1933, as amended (such registration statement, as it may
be amended, and the prospectus and exhibits on file with the SEC, as well as any
post-effective amendments or supplements to such registration statement or
prospectus after the effective date of registration, being herein respectively
referred to as the "Registration Statement" and the "Prospectus"); and
WHEREAS, the offer and sale of the Units shall be made pursuant to the terms and
conditions of the Registration Statement and the Prospectus and, further,
pursuant to the terms and conditions of all applicable federal securities laws
and the applicable securities laws of all states in which the Units are offered
and sold; and
WHEREAS, the Partnership desires to give the clients of the Investment Advisor
the opportunity to purchase the Units, and the Investment Advisor is willing and
desires to provide its clients with information concerning the Units and the
procedures for subscribing for the Units upon the following terms and
conditions;
NOW, THEREFORE, in consideration of the premises and terms and conditions
thereof, it is agreed between the Partnership and the Investment Advisor as
follows.
1. Purchase of Units.
1.1 Subject to the terms and conditions herein set forth, the Partnership hereby
makes available for purchase by the clients of the Investment Advisor a portion
of the Units described in the Registration Statement. The Investment Advisor
hereby covenants, warrants and agrees that, in regard to any purchase of the
Units by its clients, it will comply with all of the terms and conditions of the
Registration Statement and the Prospectus, all applicable state and federal
laws, including the Securities Act of 1933, as amended, the Investment Advisers
Act of 1940, as amended, and any and all regulations and rules pertaining
thereto, heretofore or hereafter issued by the SEC. Neither the Investment
Advisor nor any other person shall have any authority to give any information or
make any representations in connection with the Units other than as contained in
the Registration Statement and Prospectus, as amended and supplemented, and as
is otherwise expressly authorized in writing by the Partnership.
1.2 Clients of the Investment Advisor may, following receipt of written notice
by the Investment Advisor from the Partnership of the effective date of the
Registration Statement, purchase the Units according to all such terms as are
contained in the Registration Statement and the Prospectus. The Investment
Advisor shall comply with all requirements set forth in the Registration
Statement and the Prospectus. The Investment Advisor shall use and distribute,
in connection with the Units, only the Prospectus and, if necessary, any
separate prospectus relating solely to the DRIP, and such sales literature and
advertising materials that shall conform in all respects to any restrictions of
local law and the applicable requirements of the Securities Act of 1933, as
amended, and that has been approved in writing by the Partnership. The
Partnership reserves the right to establish such additional procedures as it may
deem necessary to ensure compliance with the requirements of the Registration
Statement, and the Investment Advisor shall comply with all such additional
procedures to the extent that it has received written notice thereof.
1.3 All monies received for purchase of any of the Units shall be forwarded by
the Investment Advisor to Behringer Securities LP for delivery to Xxxxx Fargo
Bank Iowa, N.A. (the "Escrow Agent"), where such monies will be deposited in an
escrow account established by the Partnership solely for such subscriptions. The
Investment Advisor shall return any check not made payable "Xxxxx Fargo Bank
Iowa, Behringer Harvard Mid-Term Value Enhancement Fund I LP" directly to the
subscriber who submitted the check. Subscriptions will be executed as described
in the Registration Statement or as directed by the Partnership. Each Investment
Advisor receiving a subscriber's check will deliver such check to Behringer
Securities LP no later than the close of business of the first business day
after receipt of the subscription documents by the Investment Advisor.
1.4 During the term of this Agreement, the Partnership shall have full authority
to take such action as it may deem advisable in respect to all matters
pertaining to the performance of the Investment Advisor under this Agreement.
1.5 The Units may be purchased by clients of the Investment Advisor only where
the Units may be legally offered and sold, only by such persons in such states
who shall be legally qualified to purchase the Units, and only by such persons
in such states in which the Investment Advisor is registered as an investment
advisor or exempt from any applicable registration requirements.
1.6 The Investment Advisor shall have no obligation under this Agreement to
advise its clients to purchase any of the Units.
1.7 The Investment Advisor will use every reasonable effort to assure that Units
are purchased only by investors who:
(a) meet the investor suitability standards, including the minimum
income and net worth standards established by the Partnership and
set forth in the Prospectus, and minimum purchase requirements set
forth in the Registration Statement;
(b) can reasonably benefit from an investment in the Partnership based
on each prospective investor's overall investment objectives and
portfolio structure;
(c) are able to bear the economic risk of the investment based on each
prospective investor's overall financial situation; and
(d) have apparent understanding of: (i) the fundamental risks of the
investment; (ii) the risk that the prospective investor may lose the
entire investment; (iii) the lack of liquidity of the Units; (iv)
the restrictions on transferability of the Units; (v) the background
and qualifications of the employees and agents of Behringer Advisors
LP, the advisor to the Partnership; and (vi) the tax consequences of
an investment in the Units.
2
1.8 The Investment Advisor will make the determinations required to be made by
it pursuant to Section 1.7 hereof based on information it has obtained from each
prospective investor, including, at a minimum, but not limited to, the
prospective investor's age, investment objectives, investment experience,
income, net worth, financial situation and other investments of the prospective
investor, as well as any other pertinent factors deemed by the Investment
Advisor to be relevant.
1.9 In addition to complying with the provisions of Section 1.8 above, and not
in limitation of any other obligations of the Investment Advisor to determine
suitability imposed by state or federal law, the Investment Advisor agrees that
it will comply fully with the following provisions:
(a) The Investment Advisor shall have reasonable grounds to believe,
based upon information provided by the investor concerning his or
her investment objectives, other investments, financial situation
and needs, and upon any other information known by the Investment
Advisor, that (i) each client of the Investment Advisor that
purchases Units is or will be in a financial position appropriate to
enable him or her to realize to a significant extent the benefits
(including tax benefits) of an investment in the Units, (ii) each
client of the Investment Advisor that purchases Units has a fair
market net worth sufficient to sustain the risks inherent in an
investment in the Units (including potential loss and lack of
liquidity), and (iii) the Units otherwise are or will be a suitable
investment for each client of the Investment Advisor that purchases
Units, and the Investment Advisor shall maintain files disclosing
the basis upon which the determination of suitability was made;
(b) The Investment Advisor shall not execute any transaction involving
the purchase of Units in a discretionary account without prior
written approval of the transactions by the investor;
(c) The Investment Advisor shall have reasonable grounds to believe,
based upon the information made available to it, that all material
facts are adequately and accurately disclosed in the Registration
Statement and provide a basis for evaluating the Units;
(d) In making the determination set forth in subparagraph (a) above, the
Investment Advisor shall evaluate items of compensation, physical
properties, tax aspects, financial stability and experience of the
Partnership's sponsor, conflicts of interest and risk factors,
appraisals, as well as any other information deemed pertinent by it;
(e) The Investment Advisor shall inform each prospective investor of all
pertinent facts relating to the liquidity and marketability of the
Units.
1.10 The Investment Advisor agrees to retain in its files, for a period of at
least six years, information that will establish that each purchaser of Units
falls within the permitted class of investors.
1.11 The Investment Advisor either (i) shall not purchase Units for its own
account or (ii) shall hold for investment any Units purchased for its own
account.
1.12 The Investment Advisor hereby confirms that it is familiar with Securities
Act Release No. 4968 and Rule 15c2-8 under the Securities Exchange Act of 1934,
as amended, relating to the distribution of preliminary and final prospectuses,
and confirms that it has complied and will comply therewith.
1.13 The Investment Advisor shall deliver a copy of Section 260.141.11 of the
California Corporate Securities Law of 1968 to each client of the Investment
Advisor that purchases Units and resides in California.
3
1.14 A sale of Units shall be deemed to be completed only after the Partnership
receives a properly completed subscription agreement for Units from the
Investment Advisor evidencing the fact that the investor had received a final
Prospectus at least five full business days prior to the completion date,
together with payment of the full purchase price of each purchased Unit from a
buyer who satisfies each of the terms and conditions of the Registration
Statement and Prospectus, and only after such subscription agreement has been
accepted in writing by the Partnership.
1.15 Clients of an Investment Advisor who have been advised by such Investment
Advisor on an ongoing basis regarding investments other than in the Partnership,
and who are not being charged by such Investment Advisor, through the payment of
commissions or otherwise, direct transaction based fees in connection with the
purchase of the Units, may reduce the amount of selling commissions payable with
respect to the purchase of their units of limited partnership down to zero.
1.16 If requested by the Partnership, the Investment Advisor shall obtain from
subscribers for the Units, other documentation reasonably deemed by the
Partnership to be required under applicable law or as may be necessary to
reflect the policies of the Partnership. Such documentation may include, without
limitation, subscribers' written acknowledgement and agreement to the privacy
policies of the Partnership.
2. Compensation to Investment Advisor.
The Partnership shall pay no fees, commissions or other compensation to the
Investment Advisor.
3. Association of the Partnership with Other Advisors and Dealers.
It is expressly understood between the Partnership and the Investment Advisor
that the Partnership may cooperate with broker-dealers who are registered as
broker-dealers with the National Association of Securities Dealers, Inc. (the
"NASD") or with other investment advisors registered under the Investment
Advisers Act of 1940, as amended. Such broker-dealers and investment advisors
may enter into agreements with the Partnership on terms and conditions identical
or similar to this Agreement and shall receive such rates of commission or other
fees as are agreed to between the Partnership and the respective broker-dealers
and investment advisors and as are in accordance with the terms of the
Registration Statement.
4. Conditions of the Investment Advisor's Obligations.
The Investment Advisor's obligations hereunder are subject, during the full term
of this Agreement and the Offering, to (a) the performance by the Partnership of
its obligations hereunder and compliance by the Partnership with the covenants
set forth in Section 7 hereof; and (b) the conditions that: (i) the Registration
Statement shall become and remain effective; and (ii) no stop order shall have
been issued suspending the effectiveness of the Offering.
5. Conditions to the Partnership's Obligations.
The obligations of the Partnership hereunder are subject, during the full term
of this Agreement and the Offering, to the conditions that: (a) at the effective
date of the Registration Statement and thereafter during the term of this
Agreement while any Units remain unsold, the Registration Statement shall remain
in full force and effect authorizing the offer and sale of the Units; (b) no
stop order suspending the effectiveness of the Offering or other order
restraining the offer or sale of the Units shall have been issued nor
proceedings therefor initiated or threatened by any state regulatory agency or
the SEC; and (c) the Investment Advisor shall have satisfactorily performed all
of its obligations hereunder and complied with the covenants set forth in
Section 6 hereof.
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6. Covenants of the Investment Advisor.
The Investment Advisor covenants, warrants and represents, during the full term
of this Agreement, that:
6.1 The Investment Advisor is, and shall remain, registered as an investment
advisor under the Investment Advisers Act of 1940, as amended, and registered or
licensed as an investment advisor by the appropriate regulatory agency of each
state in which the advisor has clients, or is exempt from such registration
requirements.
6.2 Neither the Investment Advisor nor any person associated with the Investment
Advisor is registered, or is required to be registered, as a broker-dealer or
registered representative with the SEC, NASD self-regulatory organization, or
state securities commission.
6.3 The Investment Advisor shall comply with all applicable federal and state
securities laws, including, without limitation, the disclosure and compensation
requirements of the Investment Advisers Act of 1940, as amended, and the
provisions thereof requiring disclosure of the existence of this Agreement and
the compensation to be paid to the Investment Advisor hereunder.
6.4 The Investment Advisor shall maintain the records required by Section 204 of
the Investment Advisers Act of 1940, as amended, and Rule 204-2 thereunder in
the form and for the periods required thereby.
6.5 Investment Advisor represents to the Partnership that Investment Advisor has
established and implemented anti-money laundering compliance programs in
accordance with applicable law, including applicable SEC rules and the USA
PATRIOT Act of 2001, reasonably expected to detect and cause the reporting of
suspicious transactions in connection with the sale of Units of the Partnership.
7. Covenants of the Partnership.
The Partnership covenants, warrants and represents, during the full term of this
Agreement, that:
7.1 It shall use its best efforts to maintain the effectiveness of the
Registration Statement and to file such applications or amendments to the
Registration Statement as may be reasonably necessary for that purpose.
7.2 It shall inform the Investment Advisor whenever and as soon as it receives
or learns of any order issued by the SEC, any state regulatory agency or any
other regulatory agency which suspends the effectiveness of the Registration
Statement or prevents the use of the Prospectus or which otherwise prevents or
suspends the offering or sale of the Units, or receives notice of any
proceedings regarding any such order.
7.3 It shall use its best efforts to prevent the issuance of any order described
herein at Section 7.2 hereof and to obtain the lifting of any such order if
issued.
7.4 It shall give the Investment Advisor written notice when the Registration
Statement becomes effective and shall deliver to the Investment Advisor such
number of copies of the Prospectus, and any supplements and amendments thereto,
which are finally approved by the SEC, as the Investment Advisor may reasonably
request for sale of the Units.
7.5 It shall promptly notify the Investment Advisor of any post-effective
amendments or supplements to the Registration Statement or Prospectus, and shall
furnish the Investment Advisor with copies of any revised Prospectus and/or
supplements and amendments to the Prospectus and/or any prospectus relating
solely to the DRIP.
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7.6 It shall keep the Investment Advisor fully informed of any material
development to which the Partnership is a party or which concerns the business
and condition of the Partnership.
7.7 It shall use its best efforts to cause, at or prior to the time the
Registration Statement becomes effective, the qualification of the Units for
offering and sale under the securities laws of such states as the Partnership
shall elect.
8. Privacy Laws.
The Partnership and the Investment Advisor (each referred to individually in
this section as "party") agree as follows:
8.1 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;
8.2 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
8.3 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.
9. Payment of Costs and Expenses.
The Investment Advisor shall pay all costs and expenses incident to the
performance of its obligations under this Agreement.
10. Indemnification.
10.1 The Investment Advisor agrees to indemnify, defend and hold harmless the
Partnership, its affiliates and their or its officers, directors, trustees,
employees and agents, against all losses, claims, demands, liabilities and
expenses, joint or several, including reasonable legal and other expenses
incurred in defending such claims or liabilities, whether or not resulting in
any liability to the Partnership, its affiliates and their or its officers,
directors, trustees, employees or agents, which they or any of them may incur
arising out of (i) the offer or sale (as such term is defined in the Securities
Act of 1933, as amended) by the Investment Advisor, or any person acting on its
behalf, of any Units pursuant to this Agreement, if such loss, claim, demand,
liability, or expense arises out of or is based upon an untrue statement or
alleged untrue statement of a material fact, or any omission or alleged omission
of a material fact, other than a statement, omission, or alleged omission by the
Investment Advisor which is also, as the case may be, contained in or omitted
from the Prospectus or the Registration Statement and which statement or
omission was not based on information supplied to the Partnership by such
Investment Advisor; (ii) the breach by the Investment Advisor, or any person
acting on its behalf, of any of the terms and conditions of this Agreement; or
(iii) the negligence, malpractice or malfeasance of the Investment Advisor. This
indemnity provision shall survive the termination of this Agreement.
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10.2 The Partnership agrees to indemnify, defend and hold harmless the
Investment Advisor, its officers, directors, employees and agents, against all
losses, claims, demands, liabilities and expenses, including reasonable legal
and other expenses incurred in defending such claims or liabilities, which they
or any of them may incur, including, but not limited to, alleged violations of
the Securities Act of 1933, as amended, but only to the extent that such losses,
claims, demands, liabilities and expenses shall arise out of or be based upon
(i) any untrue statement of a material fact contained in the Prospectus or the
Registration Statement, as filed and in effect with the SEC, or in any amendment
or supplement thereto, or in any application prepared or approved in writing by
counsel to the Partnership and filed with any state regulatory agency in order
to register or qualify the Units under the securities laws thereof (the "Blue
Sky applications"), or (ii) any omission or alleged omission to state therein a
material fact required to be stated in the Prospectus or the Registration
Statement or the Blue Sky applications, or necessary to make such statements,
and any part thereof, not misleading; provided, that any such untrue statement,
omission or alleged omission is not based on information included in any such
document which was supplied to the Partnership, or any officer of the
Partnership by such Investment Advisor; provided, further, in each case that
such claims or liabilities did not arise from Investment Advisor's own
negligence, malpractice or malfeasance. This indemnity provision shall survive
the termination of this Agreement.
10.3 No indemnifying party shall be liable under the indemnity provisions
contained in Sections 10.1 and 10.2 above unless the party to be indemnified
shall have notified such indemnifying party in writing promptly after the
summons or other first legal process giving information of the nature of the
claim served upon the party to be indemnified, but failure to notify an
indemnifying party of any such claim shall not relieve it from any liabilities
that it may have to the indemnified party against whom action is brought other
than on account of its indemnity agreement contained in Sections 10.1 and 10.2
above. In the case of any such claim, if the party to be indemnified notified
the indemnifying party of the commencement thereof as aforesaid, the
indemnifying party shall be entitled to participate at its own expense in the
defense of such claim. If it so elects, in accordance with arrangements
satisfactory to any other indemnifying party or parties similarly notified, the
indemnifying party has the option to assume the entire defense of the claim,
with counsel who shall be satisfactory to such indemnified party and all other
indemnified parties who are defendants in such action; and after notice from the
indemnifying party of its election so to assume the defense thereof and the
retaining of such counsel by the indemnifying party, the indemnifying party
shall not be liable to such indemnified party under Sections 10.1 and 10.2 above
for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof, other than for the reasonable costs of
investigation.
11. Term of Agreement.
This Agreement shall become effective on the date on which this Agreement is
executed by the Partnership and the Investment Advisor. The Investment Advisor
and the Partnership may each prevent this Agreement from becoming effective,
without liability to the other, by written notice before the time this Agreement
otherwise would become effective. After this Agreement becomes effective, either
party may terminate it at any time for any reason by giving thirty (30) days'
written notice to the other party; provided, however, that this Agreement shall
in any event automatically terminate at the first occurrence of any of the
following events: (a) the Registration Statement for offer and sale of the Units
shall cease to be effective; (b) the Offering shall be terminated; or (c) the
Investment Advisor's license or registration to act as an investment advisor
shall be revoked or suspended by any federal, self-regulatory or state agency
and such revocation or suspension is not cured within ten (10) days from the
date of such occurrence. In any event, this Agreement shall be deemed suspended
during any period for which such license is revoked or suspended.
12. Survival of Provisions.
The respective representations and warranties of the Partnership and the
Investment Advisor set forth in this Agreement and the covenants set forth in
Section 10 hereof shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of the
Investment Advisor or any
7
authorized representative of or person controlling the Investment Advisor, and
(c) the acceptance of any payment for the Units.
13. Notices.
All notices and communications hereunder shall be in writing and shall be deemed
to have been given and delivered when deposited in the United States mail,
postage prepaid, registered or certified mail, to the applicable address set
forth below.
If sent to the Partnership:
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chief Operating Officer
If sent to the Investment Advisor: to the person whose name and address are
identified in Exhibit A hereto.
14. Successors.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and shall not be assigned or transferred by the Investment Advisor by
operation of law or otherwise.
15. Miscellaneous.
15.1 This Agreement shall be construed in accordance with the applicable laws of
the State of Texas. Venue for any action (including arbitration) brought
hereunder shall lie exclusively in Dallas, Texas.
15.2 Nothing in this Agreement shall constitute the Investment Advisor as in
association with or in partnership with the Partnership.
15.3 This Agreement, including Exhibit A hereto, embodies the entire
understanding, between the parties to the Agreement, and no variation,
modification or amendment to this Agreement shall be deemed valid or effective
unless it is in writing and signed by both parties hereto.
15.4 If any provision of this Agreement shall be deemed void, invalid or
ineffective for any reason, the remainder of the Agreement shall remain in full
force and effect.
15.5 This Agreement may be executed in counterpart copies, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument comprising this Agreement.
[SIGNATURES ON FOLLOWING PAGES]
8
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year indicated on Exhibit A hereto.
SELECTED INVESTMENT ADVISOR: PARTNERSHIP:
-------------------------------------
(Name of Investment Advisor) BEHRINGER HARVARD MID-TERM VALUE
ENHANCEMENT FUND I LP
By:
---------------------------------- By:
------------------------------------
Print Name: Xxxxxx X. Xxxxxxxxx, General Partner
----------------------
Title:
---------------------------
By: Behringer Harvard Advisors I LP,
Its General Partner
------------------------------------- By: Harvard Property Trust, LLC
Witness Its General Partner
By:
--------------------------
Xxxxxx X. Xxxxxxxxx,
President
----------------------------------------
Witness
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EXHIBIT A
TO
SELECTED INVESTMENT ADVISOR AGREEMENT
OF
BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP
This Exhibit A is attached to and made a part of that certain Selected
Investment Advisor Agreement, dated as of the ___ day of ____________________,
200_, by and between Behringer Harvard Mid-Term Value Enhancement Fund I LP,
(the "Partnership") and ____________________________ (the "Advisor").
1. Date of Agreement: ____________________, 200__
2. Identity of Advisor:
Name: _________________________________________________________________
Type of Entity: _______________________________________________________
State Organized in: ___________________________________________________
Qualified to Do Business and in Good Standing in: _____________________
Registered as an Investment Advisor in the Following States:___________
3. Name and Address for Notice Purposes:
Name: _________________________________________________________________
Title: ________________________________________________________________
Company: ______________________________________________________________
Address: ______________________________________________________________
City, State and Zip Code: _____________________________________________
Telephone Number (including area code): _______________________________
4. Please complete the following for our records:
(a) How many registered investment advisors are with your firm? _______
(Please enclose a current list.)
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(b) Does your firm publish a newsletter? [ ] Yes [ ] No
What is/are the frequency of the publication(s)?
[ ] Weekly [ ] Monthly [ ] Quarterly
[ ] Bi-weekly [ ] Bi-monthly [ ] Other _____________________
(please specify)
PLEASE PLACE BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP ON YOUR
MAILING LIST AND PROVIDE A SAMPLE OF THE PUBLICATION IF AVAILABLE.
(c) Does your firm have regular internal mailings, or bulk package
mailings to its registered investment advisors? [ ] Yes [ ] No
PLEASE PLACE BEHRINGER HARVARD MID-TERM VALUE ENHANCEMENT FUND I LP ON YOUR
MAILING LIST AND PROVIDE A SAMPLE OF THE PUBLICATION IF AVAILABLE.
(d) Does your firm have a computerized electronic mail (E-Mail)
system for your registered investment advisors? [ ] Yes [ ] No
If so, please provide e-mail address: ____________________________
(e) Website address: _________________________________________________
Person responsible: ______________________________________________
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