EXHIBIT 1
▇▇▇▇▇ REAL ESTATE FUND XII, L.P.
Up To
$70,000,000
Units of Limited Partnership Interest
(7,000,000 Units)
Dealer Manager Distribution Agreement
_____________, 1999
▇▇▇▇▇ Investment Securities, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇ Partners, L.P. ("▇▇▇▇▇ Partners") and ▇▇▇ ▇. ▇▇▇▇▇, III ("▇▇▇▇▇"), as
the general partners (the "General Partners") of ▇▇▇▇▇ Real Estate Fund XII,
L.P., a Georgia limited partnership (the "Partnership"), propose that the
Partnership issue and sell up to $70,000,000 aggregate principal amount of units
of limited partnership interest ("Units") in the Partnership. Such Units are to
be sold for cash for $10.00 each; the minimum purchase by any one person shall
be 100 Units (except as otherwise indicated in the Prospectus or in any letter
or memorandum from the Partnership to you (the "Dealer Manager")). Terms not
defined herein shall have the same meaning as in the Prospectus. In connection
therewith, the Partnership and the General Partners hereby agree with 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.
Said Registration Statement, which includes a preliminary prospectus, was filed
with the SEC on November 2, 1998. 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 Revised Uniform Limited Partnership Act of the
State of Georgia 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 or its General
Partners, 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, by-law, 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.
1.10 The respective financial statements contained in the Registration
Statement and the Prospectus fairly present the financial condition of the
Partnership and ▇▇▇▇▇ Partners and the results of their respective operations as
of the dates and for the periods therein specified; and such financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved; and the
accountants who have certified certain of such financial statements are
independent public accountants as required by the Securities Act and the Rules
and Regulations.
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
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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 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
7,000,000 Units through Dealers, all of whom shall be members of the National
Association of Securities Dealers, Inc. ("NASD"). The Dealer Manager may also
sell Units for cash directly to its own clients and customers at the public
offering price and subject to the terms and conditions stated in the Prospectus.
The Dealer Manager hereby accepts such agency and distributorship and agrees to
use its best efforts to sell the Units on said terms and conditions. The Dealer
Manager represents to the Partnership that it is a member of the NASD and that
it and its employees and representatives have all required licenses and
registrations to act under this Agreement.
The Dealer Manager agrees to be bound by the terms of the Escrow
Agreement executed as of February 15, 1999 by NationsBank, N.A., as escrow
agent, the Dealer Manager and the Partnership, a copy of which is enclosed.
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.
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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
125,000 Units have been sold by the Dealer Manager and its Dealers (the "Minimum
Offering"), or in connection with commissions payable with respect to sales made
to residents of the States of New York and Pennsylvania, until 250,000 Units
(from all sources), have been sold. Until the Minimum Offering is obtained,
investments will be held in escrow and, if the Minimum Offering is not obtained,
will be returned to the investors in accordance with the Prospectus. The
Partnership will not be liable or responsible to any Dealer for direct payment
of commissions to such Dealer, it being the sole and exclusive responsibility of
the Dealer Manager for payment of commissions to Dealers. Notwithstanding the
above, at the discretion of the General Partners, the Partnership may act as
agent of the Dealer Manager by making direct payment of commissions to such
Dealers without incurring any liability therefor.
3.4 The Dealer Manager represents and warrants to the Partnership, its
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 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 they use the name of said escrow agent in any
manner whatsoever in connection with the offer or sale of the Units other than
by acknowledgment that it has agreed to serve as escrow agent.
4. Indemnification
---------------
4.1 The General Partners will indemnify and hold harmless the Dealers
and the Dealer Manager, their officers and directors and each person, if any,
who controls such Dealer or Dealer Manager within the meaning of Section 15 of
the Securities Act from and against any losses, claims, damages or liabilities,
joint or several, to which such Dealers or the Dealer Manager, their officers
and directors, or such controlling person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (a)
any untrue statement or alleged untrue statement of a material fact contained
(i) in any Registration Statement (including the Prospectus as a part thereof)
or any post-effective amendment thereto or in the Prospectus or any amendment or
supplement to the Prospectus or (ii) in any blue sky application or other
document executed by the Partnership or on its behalf specifically for the
purpose of qualifying any or all of the Units for sale under the securities laws
of any jurisdiction or based upon written information furnished by the
Partnership under the securities laws thereof (any such application, document or
information being hereinafter called a "Blue Sky Application"), or (b) the
omission or alleged omission to state in the Registration Statement (including
the Prospectus as a part thereof) or any post-effective amendment thereof or in
any Blue Sky Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (c) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, if used prior to the effective date of the Registration
Statement, or in the Prospectus or any amendment or supplement to the Prospectus
or the omission or alleged omission to state therein a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, and will
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reimburse each Dealer or Dealer Manager, its officers and directors 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 Partnership or 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.
4.2 The Dealer Manager will indemnify and hold harmless the
Partnership, the General Partners, the partners of ▇▇▇▇▇ Partners, each person
or firm which has signed the Registration Statement and each person, if any, who
controls the Partnership within the meaning of Section 15 of the Securities Act,
from and against any losses, claims, damages or liabilities to which any of the
aforesaid parties may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (a) any untrue statement of a material
fact contained (i) in the Registration Statement (including the Prospectus as a
part thereof) or any post-effective amendment thereof or (ii) any Blue Sky
Application, or (b) the omission to state in the Registration Statement
(including the Prospectus as a part thereof) or any post-effective amendment
thereof or in any Blue Sky Application a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (c) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, if used prior to the effective date of the Registration
Statement, or in the Prospectus, or in any amendment or supplement to the
Prospectus or the omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein in the light
of the circumstances under which they were made not misleading in each case to
the extent, but only to the extent, that such untrue statement or omission was
made in reliance upon and in conformity with written information furnished to
the Partnership by or on behalf of the Dealer Manager specifically for use with
reference to the Dealer Manager in the preparation of the Registration Statement
or any such post-effective amendments thereof or any such Blue Sky Application
or any such preliminary prospectus or the Prospectus or any such amendment
thereof or supplement thereto, or (d) any unauthorized use of sales materials or
use of unauthorized verbal representations concerning the Units by the Dealer
Manager and will reimburse the aforesaid parties, in connection with
investigation or defending such loss, claim, damage, liability or action. This
indemnity agreement will be in addition to any liability which the Dealer
Manager may otherwise have.
4.3 Each Dealer severally will indemnify and hold harmless the
Partnership, the Dealer Manager, the General Partners and each of their partners
and such partners' directors (including any persons named in any of the
Registration Statements with his consent, as about to become a director), each
of their officers who has signed any of the Registration Statements and each
person, if any, who controls the Partnership, the Dealer Manager and 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
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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 and will
reimburse the Partnership, the Dealer Manager, the General Partners, 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 as to notify the indemnifying party will relieve it from any
liability under this Section 4 as to the particular item for which
indemnification is then being sought, but not from any other liability which it
may have to any indemnified party. In case any such action is brought against
any indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled, to the extent it may wish,
jointly with any other indemnifying party similarly notified, to participate in
the defense thereof, with separate counsel. Such participation shall not relieve
such indemnifying party of the obligation to reimburse the indemnified party for
reasonable legal and other expenses (subject to Section 4.5) incurred by such
indemnified party in defending itself, except for such expenses incurred after
the indemnifying party has deposited funds sufficient to effect the settlement,
with prejudice, of the claim in respect of which indemnity is sought. Any such
indemnifying party shall not be liable to any such indemnified party on account
of any settlement of any claim or action effected without the consent of such
indemnifying party.
4.5 The indemnifying party shall pay all legal fees and expenses of
the indemnified party in the defense of such claims or actions; provided,
however, that the indemnifying party shall not be obliged 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
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officer or director thereof, or by or on behalf of the Partnership, the Dealer
Manager or the General Partners, (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
--------------
This Agreement was executed and delivered in, and its validity,
interpretation and construction shall be governed by the laws of, the State of
Georgia.
7. Counterparts
------------
This Agreement may be executed in any number of counterparts. Each
counterpart, when executed and delivered, shall be an original contract, but all
counterparts, when taken together, shall constitute one and the same Agreement.
8. Successors and Amendment
------------------------
8.1 This Agreement shall inure to the benefit of and be binding upon
the Dealer Manager, the General Partners, the Partnership and their respective
successors. Nothing in this Agreement is intended or shall be construed to give
to any other person any right, remedy or claim, except as otherwise specifically
provided herein. This Agreement shall inure to the benefit of the Dealers to the
extent set forth in Sections 1 and 4 hereof.
8.2 This Agreement may be amended by the written agreement of the
Dealer Manager and the Partnership, and, as to Sections 3.3 and 10, the General
Partners.
9. Term
----
Any party to this Agreement shall have the right to terminate this
Agreement on 60 days' written notice.
10. Confirmation
------------
The General Partners hereby agree and assume the duty to confirm on behalf
of themselves and on behalf of dealers or brokers who sell the Units all orders
for purchase of Units accepted by the General Partners. 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.
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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 Appendix "F"
of the Rules of Fair Practice set forth in the NASD Manual, attached hereto as
Attachment No. 1, as well as all other applicable rules and regulations relating
to suitability of investors, including without limitation, the provisions of
Article III.C. of the Statement of Policy Regarding Real Estate Programs of the
North American Securities Administrators Association, Inc.
12. Submission of Orders
--------------------
12.1 Those persons who purchase Units will be instructed by the
Dealer Manager or the Dealer to make their checks payable to an escrow agent for
the Partnership, whenever appropriate, or to the Partnership after the Minimum
Offering has been achieved. 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.
12.2 Where, pursuant to a Dealer's internal supervisory procedures,
internal supervisory review is conducted at the same location at which
subscription documents and checks are received from subscribers, checks will be
transmitted in care of the Dealer Manager by the end of the next business day
following receipt by the Dealer for deposit to an escrow agent, where
appropriate, or to the Partnership after the Minimum Offering has been achieved.
12.3 Where, pursuant to a Dealer's internal supervisory procedures,
final internal supervisory review is conducted at a different location, checks
will be transmitted by the end of the next business day following receipt by the
Dealer to the office of the Dealer conducting such final internal supervisory
review (the "Final Review Office"). The Final Review Office will in turn by the
end of the next business day following receipt by the Final Review Office,
transmit such checks in care of the Dealer Manager for deposit to an escrow
agent, where appropriate, or to the Partnership after the Minimum Offering has
been achieved.
12.4 Where the Dealer Manager is involved in the distribution
process, checks will be transmitted by the Dealer Manager for deposit to the
escrow agent, where applicable, or to the Partnership after the Minimum Offering
has been achieved, as soon as practicable, but in any event by the end of the
second business day following receipt by the Dealer Manager. Checks of rejected
subscribers will be promptly returned to such subscribers.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us
as of the date first above written.
Very truly yours,
▇▇▇▇▇ REAL ESTATE FUND XII, L.P.
By:_______________________________________
▇▇▇ ▇. ▇▇▇▇▇, III
General Partner
By: ▇▇▇▇▇ PARTNERS, L.P.
A Georgia Limited Partnership
General Partner
By: ▇▇▇▇▇ CAPITAL, INC.
A Georgia Corporation
General Partner
By:_______________________________________
▇▇▇ ▇. ▇▇▇▇▇, III
President
Attest:___________________________________
Name:_____________________________________
Title:____________________________________
Accepted and agreed as of the
date first above written.
▇▇▇▇▇ INVESTMENT SECURITIES, INC.
By:_____________________________
▇▇▇ ▇. ▇▇▇▇▇, III
President
Attest:__________________________
Name:____________________________
Title:___________________________
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EXHIBIT "A"
▇▇▇▇▇ REAL ESTATE FUND XII, L.P.
Up To
$70,000,000
7,000,000 Units of Limited Partnership Interest
at $10.00 each
SELECTED DEALER AGREEMENT
Ladies and Gentlemen:
▇▇▇▇▇ Investment Securities, Inc., as the dealer manager ("Dealer
Manager") for ▇▇▇▇▇ Real Estate Fund XII, L.P. (the "Partnership"), a Georgia
limited partnership of which ▇▇▇▇▇ Partners, L.P. and ▇▇▇ ▇. ▇▇▇▇▇, III serve as
the general partners (the "General Partners"), invite 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
______________, 1999, in the form attached hereto as Exhibit "A." By your
acceptance of this Agreement, you will become one of the Dealers referred to in
such Agreement between the Partnership, the General Partners and the Dealer
Manager and will be entitled and subject to the indemnification provisions
contained in such Agreement, including the provisions of such Agreement (Section
4) wherein the Dealers severally agree to indemnify and hold harmless the
Partnership, the Dealer Manager, the General Partners and each officer and
director thereof, and each person, if any, who controls the Partnership, the
Dealer Manager and the General Partners within the meaning of the Securities Act
of 1933. Except as otherwise specifically stated herein, all terms used in this
Agreement have the meanings provided in the Dealer Manager Distribution
Agreement. The Units are offered solely through broker-dealers who are members
of the National Association of Securities Dealers, Inc. ("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 "NationsBank, N.A., as Escrow Agent for ▇▇▇▇▇ Real
Estate Fund XII, L.P." where appropriate, or to the Partnership after the
Minimum Offering has been achieved. Dealer hereby agrees to be bound by the
terms of the Escrow Agreement executed as of February 15, 1999 by NationsBank,
N.A., as escrow agent, the Dealer Manager and the Partnership, a copy of which
is enclosed. 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
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shall be transmitted for deposit pursuant to one of the methods in this Article
II. Transmittal of received investor funds will be made in accordance with the
following procedures:
Where, pursuant to the Dealer's internal supervisory procedures, internal
supervisory review is conducted at the same location at which subscription
documents and checks are received from subscribers, checks will be
transmitted in care of the Dealer Manager by the end of the next business
day following receipt by the Dealer for deposit to an escrow agent, where
appropriate, or to the Partnership after the Minimum Offering has been
achieved.
Where, pursuant to the Dealer's internal supervisory procedures, final and
internal supervisory review is conducted at a different location, checks
will be transmitted by the end of the next business day following receipt
by the Dealer to the office of the Dealer conducting such final internal
supervisory review (the "Final Review Office"). The Final Review Office
will in turn by the end of the next business day following receipt by the
Final Review Office, transmit such checks for deposit to an escrow agent,
where appropriate, or to the Partnership after the Minimum Offering has
been achieved.
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 further sums to the capital
of the Partnership. 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 specified in the
Prospectus, the Dealer Manager may reallow out of its dealer manager fee a
marketing fee 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.
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 Distribution Agreement, that the
Partnership is not liable or responsible for the direct payment of such
commission to the Dealer.
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V. Payment
Payments of selling commissions will be made by the Dealer Manager (or by
the Partnership as provided in the Dealer Manager Distribution 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; the
Partnership and the General Partners reserve the right to reject any order.
Orders not accompanied by a Subscription Agreement and Signature Page and the
required check in payment for the Units may be rejected. Issuance and delivery
of the Units will be made only after actual receipt of payment therefor. If any
check is not paid upon presentment, or if the Partnership is not in actual
receipt of clearinghouse funds or cash, certified or cashier's check or the
equivalent in payment for the Units within 15 days of sale, the Partnership
reserves the right to cancel the sale without notice. In the event an order is
rejected, canceled or rescinded for any reason, the Dealer agrees to return to
the Dealer Manager any commission theretofore paid with respect to such order.
VII. Prospectus and Supplemental Information
Dealer is not authorized or permitted to give and will not give, any
information or make any representation concerning the Units except as set forth
in the Prospectus and supplemental information. The Dealer Manager will supply
Dealer with reasonable quantities of the Prospectus, any supplements thereto and
any amended Prospectus, as well as any supplemental information, for delivery to
investors, and Dealer will deliver a copy of the Prospectus and all supplements
thereto and any amended Prospectus to each investor to whom an offer is made
prior to or simultaneously with the first solicitation of an offer to sell the
Units to an investor. The Dealer agrees that it will not send or give any
supplements thereto and any amended Prospectus to that investor unless it has
previously sent or given a Prospectus and all supplements thereto and any
amended Prospectus to that investor or has simultaneously sent or given a
Prospectus and all supplements thereto and any amended Prospectus with such
supplemental information. Dealer agrees that it will not show or give to any
investor or prospective investor or reproduce any material or writing which is
supplied to it by the Dealer Manager and marked "dealer only" or otherwise
bearing a legend denoting that it is not to be used in connection with the sale
of Units to members of the public. Dealer agrees that it will not use in
connection with the offer or sale of Units any material or writing which relates
to another partnership supplied to it by the Partnership or the Dealer Manager
bearing a legend which states that such material may not be used in connection
with the offer or sale of any securities other than the partnership to which it
relates. Dealer further agrees that it will not use in connection with the
offer or sale of Units any materials or writings which have not been previously
approved by the Dealer Manager. Each Dealer agrees, if the Dealer Manager so
requests, to furnish a copy of any revised preliminary Prospectus to each person
to whom it has furnished a copy of any previous preliminary Prospectus, and
further agrees that it will itself mail or otherwise deliver all preliminary and
final Prospectuses required for compliance with the provisions of Rule 15c2-8
under the Securities Exchange Act of 1934. 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 Securities Exchange Act of 1934.
On becoming a Dealer, and in offering and selling Units, Dealer agrees to comply
with all the applicable requirements under the Securities Act of 1933, and the
Securities Exchange Act of 1934, including, without limitation, the provisions
of Rule 10b-6 and Rule 10b-7 and Rule 15c2-4 of the Securities and Exchange
Commission. 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
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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 Rules of Fair Practice of the
NASD.
IX. 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 Appendix F of the
Rules of Fair Practice set forth in the NASD Manual, attached hereto as
Attachment No. 1, 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. Dealer will also
undertake to comply with Sections 8, 24, 25 and 36 of Article III of the Rules
of Fair Practice set forth in the NASD Manual.
X. Termination
Dealer will suspend or terminate its offer and sale of Units upon the
request of the Partnership or the Dealer Manager at any time and will resume its
offer and sale of Units hereunder upon subsequent request of the Partnership or
the Dealer Manager. Any party may terminate this Agreement by written notice.
Such termination shall be effective 48 hours after the mailing of such notice.
This Agreement is the entire agreement of the parties and supersedes all prior
agreements, if any, between the parties hereto.
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.
XI. Notice
All notices will be in writing and will be duly given to the Dealer Manager
when mailed to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and to Dealer
when mailed to the address specified by Dealer herein.
XII. Attorney's Fees and Applicable Law
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
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the laws of the State of Georgia and shall take effect when signed by Dealer and
countersigned by the Dealer Manager.
THE DEALER MANAGER:
▇▇▇▇▇ INVESTMENT SECURITIES, INC.
Attest:
By:_________________________ By:_________________________
Name:_______________________ ▇▇▇ ▇. ▇▇▇▇▇, III
Title:______________________ President
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We have read the foregoing Agreement and we hereby accept and agree to the
terms and conditions therein set forth. We hereby represent that the list below
of jurisdictions in which we are registered or licensed as a broker or dealer
and are fully authorized to sell securities is true and correct, and we agree to
advise you of any change in such list during the term of this Agreement.
1. Identity of Dealer:
Name:___________________________________________________________________________
Type of
entity:_________________________________________________________________________
(to be completed by Dealer) (corporation, partnership or proprietorship)
Organized in the State of:______________________________________________________
(to be completed by Dealer) (State)
Licensed as broker-dealer in the following
states:_________________________________________________________________________
(to be completed by Dealer)
Tax I.D. #______________________________________________________________________
2. Person to receive notice pursuant to Section XI.
Name:___________________________________________________________________________
Company:________________________________________________________________________
Address:________________________________________________________________________
City, State and Zip Code:_______________________________________________________
Telephone No.:(_____)___________________________________________________________
Telefax No.:(_____)_____________________________________________________________
AGREED TO AND ACCEPTED BY THE DEALER:
___________________________________________
(Dealer's Firm Name)
By:________________________________________
Signature
Title:_______________________________________
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ATTACHMENT NO. 1
APPENDIX "F"
------------
Sec. 3
Suitability
(a) A member or person associated with a member shall not underwrite or
participate in a public offering of a direct participation program unless
standards of suitability have been established by the program for participants
therein and such standards are fully disclosed in the prospectus and are
consistent with the provisions of subsection (b) of this section.
(b) In recommending to a participant the purchase, sale or exchange of an
interest in a direct participation program, a member or person associated with a
member shall:
(1) have reasonable grounds to believe, on the basis of information
obtained from the participant concerning his investment objectives, other
investments, financial situation and needs, and any other information known by
the member or associated person, that:
(i) the participant is or will be in a financial position
appropriate to enable him to realize to a significant extent the benefits
described in the prospectus, including the tax benefits where they are a
significant aspect of the program;
(ii) the participant has a fair market net worth sufficient to
sustain the risks inherent in the program, including loss of investment and lack
of liquidity; and
(iii) the program is otherwise suitable for the participant; and
(2) maintain in the files of the member documents disclosing the
basis upon which the determination of suitability was reached as to each
participant.
(c) Subsections 3(a) and 3(b) shall not apply to:
(1) a secondary public offering of or a secondary market transaction
in a unit, depositary receipt, or other interest in a direct participation
program for which quotations are displayed on the NASDAQ System or which is
listed on a registered national securities exchange, or
(2) an initial public offering of a unit, depositary receipt or other
interest in a direct participation program for which an application for
inclusion on the NASDAQ System or listing on a registered national securities
exchange has been approved by NASDAQ or such exchange and the applicant makes a
good faith representation that it believes such inclusion on NASDAQ or listing
on an exchange will occur within a reasonable period of time following the
formation of the program.
(d) Notwithstanding the provisions of subsections (a) and (b) hereof, no
member shall execute any transaction in a direct participation program in a
discretionary account without prior written approval of the transaction by the
customer.
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Sec. 4
Disclosure
(a) Prior to participating in a public offering of a direct participation
program, a member or person associated with a member shall have reasonable
grounds to believe, based on information made available to him by the sponsor
through a prospectus or other materials, that all material facts are adequately
and accurately disclosed and provide a basis for evaluating the program.
(b) In determining the adequacy of disclosed facts pursuant to subsection
(a) hereof, a member or person associated with a member shall obtain information
on material facts relating at a minimum to the following, if relevant in view of
the nature of the program:
(1) items of compensation;
(2) physical properties;
(3) tax aspects;
(4) financial stability and experience of the sponsor;
(5) the program's conflicts and risk factors; and
(6) appraisals and other pertinent reports.
(c) For purposes of subsections (a) or (b) hereof, a member or person
associated with a member may rely upon the results of an inquiry conducted by
another member or members, provided that:
(1) the member or person associated with a member has reasonable
grounds to believe that such inquiry was conducted with due care;
(2) the results of the inquiry were provided to the member or person
associated with a member with the consent of the member or members conducting or
directing the inquiry; and
(3) no member that participated in the inquiry is a sponsor of the
program or an affiliate of such sponsor.
(d) Prior to executing a purchase transaction in a direct participation
program, a member or person associated with a member shall inform the
prospective participant of all pertinent facts relating to the liquidity and
marketability of the program during the term of the investment; provided,
however, that this subsection shall not apply to an initial or secondary public
offering of or a secondary market transaction in a unit, depositary receipt or
other interest in a direct participation program which complies with subsection
3(c).
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