ESCROW AGREEMENT
EXHIBIT
10.4
Citibank
Texas, N.A.
One
Lincoln Park
0000
Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx
000
Xxxxxx,
Xxxxx 00000
Attention:
Xx. Xxxxxxx XxXxx
Ladies
and Gentlemen:
BEHRINGER
HARVARD OPPORTUNITY REIT I, INC., a Maryland corporation (the “Company”), will
issue in a public offering (the “Offering”) shares of its common stock (the
“Stock”) pursuant to a Registration Statement on Form S-11 filed by the Company
with the Securities and Exchange Commission. Behringer Securities LP, a Texas
limited partnership (the “Dealer Manager”), will act as dealer manager for the
offering of the Stock. The Company is entering into this agreement to set forth
the terms on which Citibank Texas, N.A. (the
“Escrow Agent”), will, except as otherwise provided herein, hold and disburse
the proceeds from subscriptions for the purchase of the Stock in the Offering
until such time as: (i) in the case of subscriptions received from all
nonaffiliates of the Company, the Company has received and accepted
subscriptions for Stock resulting in a total of 200,000 shares of common stock
sold in the offering (the “Required Capital”); and (ii) in the case of
subscriptions received from residents of Pennsylvania (“Pennsylvania
Subscribers”), the Company has received subscriptions for Stock from
nonaffiliates of the Company resulting in total minimum capital raised of
$23,800,000 (the “Pennsylvania Required Capital”); and (iii) in the case of
subscriptions received from residents of New York (“New York Subscribers”), the
Company has received subscriptions for Stock from nonaffiliates of the Company
resulting in total minimum capital raised of $2,500,000 (the “New York Required
Capital”).
The
Company hereby appoints Citibank Texas, N.A. as Escrow
Agent for purposes of holding the proceeds from the subscriptions for the Stock,
on the terms and conditions hereinafter set forth:
1. Until
such time as the Company has received subscriptions for Stock resulting in total
minimum capital raised equal to the Required Capital and such funds are
disbursed from the Escrow Account, as hereinafter defined, in accordance with
paragraph 3(a) hereof, persons subscribing to purchase the Stock (the
“Subscribers”) will be instructed by the Dealer Manager or any soliciting
dealers to remit the purchase price in the form of checks, drafts, wires,
Automated Clearing House (ACH) or money orders (hereinafter
“instruments
of payment”) payable to the order of “Citibank Texas, N.A., Escrow Agent for
Behringer Harvard Opportunity REIT I, Inc.,” or a recognizable contraction or
abbreviation thereof including, but not limited to, “Citibank Texas, N.A.,
Escrow Agent for XX Xxx REIT.” After subscriptions are received resulting in
total minimum capital raised equal to the Required Capital and such funds are
disbursed from the Escrow Account in accordance with paragraph 3(a) hereof,
subscriptions shall continue to be so submitted unless otherwise instructed by
the Dealer Manager. Any checks, drafts or money orders received made payable to
a party other than the Escrow Agent (or after the Required Capital is received,
made payable to a party other than the party designated by the Dealer Manager)
shall be returned to the soliciting dealer who submitted the check, draft or
money order. The Dealer Manager and/or the Company will also provide or cause to
be provided to the Escrow Agent in connection with, and not later than five (5)
business days after the receipt by the Escrow Agent of, each
instrument
of payment the payee’s/Subscriber’s name, address, and social security number.
Furthermore, not later than ten (10) business days prior to any required
disbursement of interest by the Escrow Agent to any Subscriber pursuant to
paragraph 3(f) hereof or other applicable provision herein, the Dealer Manager
and/or the Company will provide or cause to be provided to the Escrow Agent, an
executed IRS Form W-9 (which may be a Substitute Form W-9 as contained in the
subscription agreement provided such Substitute Form is in conformity with all
applicable Internal Revenue Service rules, regulations and guidelines) (“Form
W-9”), the calculation of the number of shares purchased, and purchase price
remitted or other documentation containing such information sufficient to
identify the respective Subscriber. The Company hereby indemnifies and holds
harmless the Escrow Agent from and against any and all claims, liabilities,
losses, damages, costs and expenses, including reasonable attorneys’ fees,
incurred or sustained by the Escrow Agent in connection with or arising out of
the acceptance by the Escrow Agent of Form W-9. The Escrow Agent shall not be
obligated to use any efforts to obtain such information from the Subscriber,
Company or Dealer Manager. If such information regarding a Subscriber is not
provided to the Escrow Agent in a timely manner after the Escrow Agent’s receipt
of the purchase price from such Subscriber, the Company and/or the Dealer
Manager shall cooperate with the Escrow Agent to return such funds to the
soliciting dealer or other applicable party who submitted the funds, unless such
information for a Subscriber is provided prior to the actual return of such
funds by the Escrow Agent, and no interest otherwise payable shall be due or
payable with respect to such funds under paragraph 3(f) hereof. All instruments
of payment from each such Subscriber shall, except as otherwise specified
herein, be deposited into a single interest-bearing money market account
entitled “ESCROW ACCOUNT FOR THE BENEFIT OF SUBSCRIBERS FOR COMMON STOCK OF
BEHRINGER HARVARD OPPORTUNITY REIT I, INC.” or such similar designation as the
parties may agree (the “Escrow Account”), which deposit shall occur within one
(1) business day after the Escrow Agent’s or the Dealer Manager’s receipt of the
instrument of payment (after the Required Capital is received, a new account may
be established in the name of the Company). The Escrow Agent will notify the
Company and cooperate with the Company and the Company’s transfer agent when it
is in receipt of any subscription that is not, in the Escrow Agent’s reasonable
discretion, in good order. Instruments of payment received from Pennsylvania
Subscribers (as identified as such by the Company) shall be accounted for
separately in a subaccount or zero balance account entitled “ESCROW ACCOUNT FOR
THE BENEFIT OF PENNSYLVANIA SUBSCRIBERS” (the “Pennsylvania Escrow Account”),
until such Pennsylvania Escrow Account has closed pursuant to
paragraph 3(a) hereof. Instruments of payment received from New York
Subscribers (as identified as such by the Company) shall be accounted for
separately in a subaccount or zero balance account entitled “ESCROW ACCOUNT FOR
THE BENEFIT OF NEW YORK SUBSCRIBERS” (the “New York Escrow Account”), until such
New York Escrow Account has closed pursuant to paragraph 3(a) hereof. Each
of the Escrow Account, the Pennsylvania Escrow Account, and New York Escrow
Account will be established and maintained in such a way as to permit the
interest income calculations described in paragraph 7. The Company shall
cooperate with the Escrow Agent in separately accounting for New York and
Pennsylvania subscription proceeds in the New York Escrow Account and the
Pennsylvania Escrow Account, respectively, and the Escrow Agent shall be
entitled to rely upon, and shall be held harmless and indemnified by the Company
in respect, of any information provided by the Company in this regard. In that
regard and in order to validate the identity and subscription of any Subscriber,
the Company shall allow the Escrow Agent or its agents, at all reasonable times
and upon reasonable notice, to inspect any of the documents, instruments or
agreements executed or delivered by a Subscriber or a Dealer Manager on behalf
of a Subscriber in connection with the Offering.
2. The
Escrow Agent agrees to promptly process for collection the instruments of
payment upon deposit into the Escrow Account, Pennsylvania Escrow Account, or
New York Escrow Account, as applicable. Deposits shall be held in the Escrow
Account, the Pennsylvania Escrow Account, and the New York Escrow Account until
such funds are disbursed in accordance with paragraph 3(a) hereof. Prior to
disbursement of the funds deposited in the Escrow Account,
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the
Pennsylvania Escrow Account, or the New York Escrow Account, such funds shall
not be subject to claims by creditors of the Company or the Dealer Manager or
any of their affiliates. If any of the instruments of payment are returned to
the Escrow Agent for nonpayment prior to receipt of the Required Capital or, in
connection with subscriptions from Pennsylvania Subscribers, the Pennsylvania
Required Capital or, in connection with subscriptions from New York Subscribers,
the New York Required Capital, the Escrow Agent shall promptly notify the Dealer
Manager and the Company in writing via mail or facsimile of such nonpayment, and
is authorized to debit the Escrow Account, the Pennsylvania Escrow Account, or
the New York Escrow Account, as applicable, in the amount of such returned
payment as well as any interest earned on the amount of such payment.
3. (a) Subject
to the provisions of subparagraphs 3(b)-3(f) below:
(i) Once the
collected funds in the Escrow Account are an amount equal to or greater than the
Required Capital, the Escrow Agent shall promptly notify the Company and, upon
receiving written instructions and certification of approval by the Company that
the collected funds in the Escrow Account are an amount equal to or greater than
the Required Capital, (A) provide to the Company for delivery to the Director of
Banking and Finance of the State of Nebraska an affidavit in substantially the
form attached hereto as Exhibit A-1 (the “Escrow Agent Affidavit”) which states
that all of the conditions of this Agreement relating to the Escrow Account have
been met, (B) disburse to the Company, by check, ACH or wire transfer, the funds
in the Escrow Account representing the gross purchase price for the Stock,
provided however, that no funds in the Escrow Account from Subscribers who are
residents of Nebraska shall be disbursed to the Company until five days after
the Escrow Agent Affidavit and the Company Affidavit (as defined below) have
been provided to the Director of Banking and Finance of the State of Nebraska,
and (C) disburse to the Subscribers or the Company, as applicable, any interest
thereon pursuant to the provisions of subparagraph 3(f). Upon receipt by
the Company of notice from the Escrow Agent that the collected funds in the
Escrow Account are an amount equal to or greater than the Required Capital, the
Company shall (X) certify to the Escrow Agent that all of the conditions of this
Escrow Agreement have been met in substantially the form attached hereto as
Exhibit A-2 (the “Company Certificate”) and (Y) provide the Director of Banking
and Finance of the State of Nebraska (and provide a copy to the Escrow Agent) an
affidavit in substantially the form attached hereto as Exhibit B (the “Company
Affidavit”) which states that there have been no material omissions or changes
in the financial condition of the Company or other changes of circumstance, that
would render the Required Capital inadequate to finance the Company’s proposed
plan of operations or business, or render the representations in the Company’s
registration statement, as amended through such time, fraudulent, false or
misleading. The Company acknowledges and agrees that the Escrow Agent may rely
on the Company Certificate as a basis for issuing the Escrow Agent Affidavit to
the Director of Banking and Finance of the State of Nebraska as required herein
and shall be held harmless and indemnified by the Company in issuing the Escrow
Agent Affidavit in reliance therein. For purposes of this Agreement, the term
“collected funds” shall mean all funds received by the Escrow Agent that have
cleared normal banking channels and are in the form of cash or a cash
equivalent. After the satisfaction of the aforementioned provisions of this
paragraph 3(a)(i), in the event the Company receives subscriptions made payable
to the Escrow Agent (other than subscriptions that are to be deposited in the
Pennsylvania Escrow Account or the New York Escrow Account), subscription
proceeds may continue to be received in this account generally, but to the
extent such proceeds shall not be subject to escrow due to the satisfaction of
the aforementioned provisions of this paragraph 3(a)(i),
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such
proceeds are not subject to this Escrow Agreement and at the instruction of the
Company to the Escrow Agent shall be transferred from the Escrow Account or
deposited directly into, as the case may be, a commercial deposit account in the
name of the Company with the Escrow Agent (the “Deposit Account”) that has been
previously established by the Company, unless otherwise directed by the Company.
The Company hereby covenants and agrees that it shall do all things necessary in
order to establish the Commercial Account, which shall be subject to the Escrow
Agent’s usual account guidelines and regulations, prior to its use. No
provisions of this Escrow Agreement shall apply to the Deposit Account.
(ii) Regardless
of any closing of the Escrow Account, the Company and the Dealer Manager shall
continue to forward instruments of payment received from New York Subscribers
for deposit into the New York Escrow Account to the Escrow Agent until such time
as the Company notifies the Escrow Agent in writing that total subscription
proceeds (including the amount then in the New York Escrow Account, but
excluding the amount then in the Pennsylvania Escrow Account) equal or exceed
the New York Required Capital. Within five days after receipt by Escrow Agent of
such notice, the Escrow Agent shall (A) disburse to the Company, by check,
ACH or wire transfer, the funds then in the New York Escrow Account representing
the gross purchase price for the Stock, and (B) disburse to the New York
Subscribers or the Company, as applicable, any interest thereon pursuant to the
provisions of subparagraph 3(f). Following such disbursements, the Escrow
Agent shall close the New York Escrow Account, and thereafter any instruments of
payment made payable to the Escrow Agent received by the Escrow Agent from New
York Subscribers that are not subject to escrow due to the satisfaction of the
aforementioned provisions of this paragraph 3(a)(ii) shall not be subject to
this Escrow Agreement and at the instruction of the Company to the Escrow Agent
shall be transferred from the Escrow Account or deposited directly into, as the
case may be, the Deposit Account pursuant to the provisions of paragraph 3(a)(i)
herein.
(iii) Regardless
of any closing of the Escrow Account or the New York Escrow Account, the Company
and the Dealer Manager shall continue to forward instruments of payment received
from Pennsylvania Subscribers for deposit into the Pennsylvania Escrow Account
to the Escrow Agent until such time as the Company notifies the Escrow Agent in
writing that total subscription proceeds (including the amount then in the
Pennsylvania Escrow Account) equal or exceed the Pennsylvania Required Capital.
Within five days after receipt by Escrow Agent of such notice, the Escrow Agent
shall (A) disburse to the Company, by check, ACH or wire transfer, the funds
then in the Pennsylvania Escrow Account representing the gross purchase price
for the Stock, and (B) disburse to the Pennsylvania Subscribers or the Company,
as applicable, any interest thereon pursuant to the provisions of
subparagraph 3(f). Following such disbursements, the Escrow Agent shall
close the Pennsylvania Escrow Account, and thereafter any instruments of payment
made payable to the Escrow Agent received by the Escrow Agent from Pennsylvania
Subscribers that are not subject to escrow due to the satisfaction of the
aforementioned provisions of this paragraph 3(a)(iii) shall not be subject to
this Escrow Agreement and at the instruction of the Company to the Escrow Agent
shall be transferred from the Escrow Account or deposited directly into, as the
case may be, the Deposit Account pursuant to the provisions of paragraph 3(a)(i)
herein.
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(iv) In order
to induce the Escrow Agent to deposit into the Deposit Account any instruments
for payment payable to the Escrow Agent, the Company warrants and represents
that any subscription agreement or other disclosure provided to a subscriber of
Stock shall specify that notwithstanding such instruments for payment naming the
Escrow Agent as payee thereon, it shall not be maintained in an escrow account
with the Escrow Agent after the Required Capital, the New York Required Capital
or the Pennsylvania Required Capital has been achieved and the Company hereby
indemnifies and holds harmless the Escrow Agent from and against any and all
claims, liabilities, losses, damages, costs and expenses, including reasonable
attorneys’ fees, incurred or sustained by the Escrow Agent in connection with or
arising out of the deposit into the Deposit Account of instruments of payment
payable to the Escrow Agent.
(b) Within
four business days of the close of business on the date that is one year
following commencement of the Offering (the “Expiration Date”), (such
commencement date shall be promptly provided to the Escrow Agent by the Company
after the commencement of the Offering), the Escrow Agent shall promptly notify
the Company if it is not in receipt of deposits for the purchase of Stock
providing for total purchase proceeds that equal or exceed the Required Capital
(from all sources but exclusive of any funds received from subscriptions for
Stock from entities which the Company has notified the Escrow Agent are
affiliated with the Company). The Company agrees that it will provide, or cause
to be provided, to the Escrow Agent an executed Form W-9 for each
Subscriber by the end of the ninth (9th) day
following the date of such notice if interest will be payable to any such
Subscribers. On the tenth (10th) day
following the date of such notice, the Escrow Agent shall promptly return
directly to each Subscriber the collected funds deposited in the Escrow Account,
the Pennsylvania Escrow Account and the New York Escrow Account on behalf of
such Subscriber (unless earlier disbursed in accordance with paragraph 3(c)
below), or shall return the instruments of payment delivered, but not yet
processed for collection prior to such time, in each case, together with
interest in the amounts calculated pursuant to paragraph 7 for each Subscriber
at the address provided by the Dealer Manager or the Company. However, the
Escrow Agent shall not be required to remit any payments until funds represented
by such payments have been collected.
(c) Notwithstanding
subparagraphs 3(a) and 3(b) above, if the Escrow Agent is not in receipt of
evidence of subscriptions accepted on or before the close of business on such
date that is 120 days after commencement of the Offering (the Company will
notify the Escrow Agent of the commencement date of the Offering) (the “Initial
Escrow Period”), and instruments of payment dated not later than that date, for
the purchase of Stock providing for total purchase proceeds from all
nonaffiliated sources that equal or exceed the Pennsylvania Required Capital,
the Escrow Agent shall promptly notify the Company. Thereafter, the Company
shall send to each Pennsylvania Subscriber by certified mail within ten (10)
calendar days after the end of the Initial Escrow Period a notification in the
form of Exhibit C. If, pursuant to such notification, a Pennsylvania Subscriber
requests the return of his or her subscription funds within ten (10) calendar
days after receipt of the notification (the “Request Period”) and the Escrow
Agent is not in possession of an executed Form W-9 for such Subscriber, the
Company shall provide the Escrow Agent with an executed Form W-9 from each such
Pennsylvania Subscriber within ten (10) calendar days after receiving notice
from such Pennsylvania Subscriber. The Escrow Agent shall promptly thereafter
refund directly to each Pennsylvania Subscriber the collected funds deposited in
the Pennsylvania Escrow Account on behalf of such Pennsylvania Subscriber, or
shall return the instruments of payment delivered, but not yet processed for
collection prior to such time, to the address provided by the Dealer Manager or
the Company, together with interest income in the amounts calculated pursuant to
paragraph 7. However, the Escrow Agent shall not
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be
required to remit such payments until funds represented by such payments have
been collected by the Escrow Agent.
(d) The
subscription funds of Pennsylvania Subscribers who do not request the return of
their subscription funds within the Request Period shall remain in the
Pennsylvania Escrow Account for successive 120-day escrow periods (a “Successive
Escrow Period”), each commencing automatically upon the termination of the prior
Successive Escrow Period, and the Company and Escrow Agent shall follow the
notification and payment procedure set forth in subparagraph 3(c) above with
respect to the Initial Escrow Period for each Successive Escrow Period until the
occurrence of the earliest of (i) the Expiration Date, (ii) the receipt and
acceptance by the Company of subscriptions for the purchase of Stock with total
purchase proceeds that equal or exceed the Pennsylvania Required Capital and the
disbursement of the Pennsylvania Escrow Account on the terms specified herein,
or (iii) all funds held in the Pennsylvania Escrow Account having been returned
to the Pennsylvania Subscribers in accordance with the provisions hereof.
(e) If the
Company rejects any subscription for which the Escrow Agent has collected funds,
the Escrow Agent shall, upon the written request of the Company, promptly issue
a refund to the rejected Subscriber. If the Company rejects any subscription for
which the Escrow Agent has not yet collected funds but has submitted the
Subscriber’s check for collection, the Escrow Agent shall promptly return the
funds in the amount of the Subscriber’s check to the rejected Subscriber after
such funds have been collected. If the Escrow Agent has not yet submitted a
rejected Subscriber’s check for collection, the Escrow Agent shall promptly
remit the Subscriber’s check directly to the Subscriber.
(f) At any
time after funds are disbursed upon the Company’s acceptance of subscriptions
pursuant to subparagraph 3(a) above on the tenth (10th) day following the date
of such acceptance, but except as otherwise provided herein, the Escrow Agent
shall promptly provide directly to each Subscriber the amount of the interest
payable to the Subscriber, if any. If the Company determines that interest will
be payable to Subscribers, the Company agrees that it will inquire of the Escrow
Agent whether the Escrow Agent is in possession of all Subscribers’ executed
Form W-9 or such Subscriber’s federal tax identification number provided by the
Company, and agrees that it will not accept subscriptions of any Subscriber for
which the Escrow Agent is not in possession of an executed Form W-9 provided by
the Company, provided that the Escrow Agent has so informed the Company. The
Escrow Agent shall not be required to remit any payments until funds represented
by such payments have been collected by the Escrow Agent. The foregoing
notwithstanding, interest, if any, earned on subscription proceeds will be
payable to a Subscriber only if (i) the Subscriber’s funds have been held in
escrow by the Escrow Agent for at least 35 days, (ii) Escrow Agent has been in
receipt of a subscription agreement properly executed by the Subscriber for at
least 35 days and (iii) the Company has inputted such information as required by
the online CitiEscrow (“CitiEscrow”) product and has otherwise satisfied all the
terms and conditions thereof (the “1099 Requirements”) to enable the transfer of
the funds from the Escrow Account, the Pennsylvania Escrow Account or the New
York Escrow Account, as applicable into individual CitiEscrow subaccounts. Any
interest earned on accepted subscription proceeds that is not payable to the
Subscriber pursuant to the preceding sentence will be payable to the Company.
Provided the 1099 Requirements have been satisfied, the Escrow Agent shall issue
checks for interest earned on subscription proceeds and IRS Forms 1099 relating
thereto to Subscribers.
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In the
event that instruments of payment are returned for nonpayment, the Escrow Agent
is authorized to debit the Escrow Account, the Pennsylvania Escrow Account, or
the New York Escrow Account, as applicable, in accordance with paragraph 2
hereof.
4. The
Escrow Agent shall report to the Company up to daily but at least weekly as
instructed by the Company or the Dealer Manager on the account balances in each
of the Escrow Account, the Pennsylvania Escrow Account, and the New York Escrow
Account, and the activity in such accounts since the last report.
5. Prior to
the disbursement of funds deposited in the Escrow Account, the Pennsylvania
Escrow Account, or the New York Escrow Account in accordance with the provisions
of paragraph 3 hereof, the Escrow Agent shall invest all of the funds deposited
as well as earnings and interest derived therefrom in the Escrow Account, the
Pennsylvania Escrow Account, or the New York Escrow Account, as applicable, in
an interest-bearing money market account, unless the costs to the Company for
the making of such investment are reasonably expected to exceed the anticipated
interest earnings from such investment in which case the funds and interest
thereon shall remain in the respective escrow account until the balance in the
respective escrow account reaches the minimum amount necessary for the
anticipated interest earnings from such investment to exceed the costs to the
Company for the making of such investment, as determined by the Company based
upon applicable interest rates. The Escrow Agent shall not invest funds
deposited or any earnings or interest derived therefrom in any other investment
without the prior written direction or approval from the Company.
It is
hereby expressly agreed and stipulated by the parties hereto that the Escrow
Agent shall not be required to exercise any discretion hereunder and shall have
no investment or management responsibility and, accordingly, shall have no duty
to, or liability for its failure to, provide investment recommendations or
investment advice to the parties hereto. It is the intention of the parties
hereto that the Escrow Agent shall never be required to use, advance or risk its
own funds or otherwise incur financial liability in the performance of any of
its duties or the exercise of any of its rights and powers
hereunder.
6. The
Escrow Agent is entitled to rely upon written instructions received from the
Company or the Dealer Manager, unless the Escrow Agent has actual knowledge that
such instructions are not valid or genuine; provided that, if in the Escrow
Agent’s opinion, any instructions from the Company or Dealer Manager are
unclear, the Escrow Agent may request clarification from the Company or Dealer
Manager, as the case may be, prior to taking any action. However, the Escrow
Agent shall not be required to disburse any funds attributable to instruments of
payment that have not been processed for collection, until such funds are
collected and then shall disburse such funds in compliance with the disbursement
instructions from the Company or the Dealer Manager.
7. If the
Offering terminates prior to receipt of the Required Capital, or one or more
Pennsylvania Subscribers elects to have his or her subscription returned in
accordance with paragraph 3, interest income earned on subscription proceeds
deposited in the Escrow Account (the “Escrow Income”), the Pennsylvania Escrow
Account (the “Pennsylvania Escrow Income”), and the New York Escrow Account (the
“New York Escrow Income”), as applicable, shall be remitted to Subscribers, or
to the Company if the applicable Subscriber’s funds have been held in escrow by
the Escrow Agent for less than 35 days, in accordance with paragraph 3 and
without any deductions for escrow expenses. The Company shall reimburse the
Escrow Agent for all escrow expenses. The Escrow Agent shall remit all such
Escrow Income, Pennsylvania Escrow Income, and New York Escrow Income in
accordance with paragraph 3. If the Company chooses to leave the Escrow Account
open after receiving the Required Capital, then it shall make regular
acceptances of subscriptions therein, but no less frequently than monthly, and
the Escrow
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Income
from the last such acceptance shall be calculated and remitted to the
Subscribers or the Company, as applicable, pursuant to the provisions of
paragraph 3(f).
8. The
Escrow Agent shall receive compensation from the Company as set forth in
Exhibit D attached hereto.
9. The
duties, responsibilities and obligations of Escrow Agent shall be limited to
those expressly set forth herein and no duties, responsibilities or obligations
shall be inferred or implied. Escrow Agent shall not be subject to, nor required
to comply with, any other agreement between or among the Company or to which the
Company is a party, even though reference thereto may be made herein, or to
comply with any direction or instruction (other than those contained herein or
delivered in accordance with this Escrow Agreement) from the Company or the
Dealer Manager. Escrow Agent shall not be required to, and shall not, expend or
risk any of its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder
10. If at any
time Escrow Agent is served with any judicial or administrative order, judgment,
decree, writ or other form of judicial or administrative process which in any
way affects the property held in escrow hereunder (the “Escrow Property”)
(including but not limited to orders of attachment or garnishment or other forms
of levies or injunctions or stays relating to the transfer of Escrow Property),
Escrow Agent is authorized to comply therewith in any manner as it or its legal
counsel of its own choosing deems appropriate; and if Escrow Agent complies with
any such judicial or administrative order, judgment, decree, writ or other form
of judicial or administrative process, Escrow Agent shall not be liable to any
of the parties hereto or to any other person or entity even though such order,
judgment, decree, writ or process may be subsequently modified or vacated or
otherwise determined to have been without legal force or effect.
11. (a) Escrow
Agent shall not be liable for any action taken or omitted or for any loss or
injury resulting from its actions or its performance or lack of performance of
its duties hereunder in the absence of gross negligence or willful misconduct on
its part. In no event shall Escrow Agent be liable (i) for acting in accordance
with or relying upon any instruction, notice, demand, certificate or document
from the Company, (ii) for any consequential, punitive or special damages, (iii)
for the acts or omissions of its nominees, correspondents, designees, subagents
or subcustodians, or (iv) for an amount in excess of the value of the collected
funds in the Escrow Account, the New York Escrow Account, and the Pennsylvania
Escrow Account, valued as of the date of deposit.
(b) If any
fees, expenses or costs incurred by, or any obligations owed to, Escrow Agent
hereunder are not promptly paid when due, Escrow Agent may reimburse itself
therefor from the collected funds in the Escrow Account, the New York Escrow
Account, and the Pennsylvania Escrow Account and may sell, convey or otherwise
dispose of any collected funds in the Escrow Account, the New York Escrow
Account, and the Pennsylvania Escrow Account for such purpose.
(c) As
security for the due and punctual performance of any and all of the Company’s
obligations to Escrow Agent hereunder, now or hereafter arising, the Company
hereby pledges, assigns and grants to Escrow Agent a continuing security
interest in, and a lien on, the Company’s interest in the collected funds in the
Escrow Account, the New York Escrow Account, and the Pennsylvania Escrow Account
and all distributions thereon or additions thereto (whether such additions are
the result of deposits by Subscribers or the Company or the investment of
collected funds). The security interest of Escrow Agent shall at all times be
valid,
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perfected
and enforceable by Escrow Agent against the Company and all third parties in
accordance with the terms of this Escrow Agreement.
(d) Escrow
Agent may consult with legal counsel at the expense of the Company as to any
matter relating to this Escrow Agreement, and Escrow Agent shall not incur any
liability in acting in good faith in accordance with any advice from such
counsel.
(e) Escrow
Agent shall not incur any liability for not performing any act or fulfilling any
duty, obligation or responsibility hereunder by reason of any occurrence beyond
the control of Escrow Agent (including but not limited to any act or provision
of any present or future law or regulation or governmental authority, any act of
God or war, or the unavailability of the Federal Reserve Bank wire or telex or
other wire or communication facility).
12. Unless
otherwise specifically set forth herein, Escrow Agent shall proceed as soon as
practicable to collect any checks or other collection items at any time
deposited hereunder. All such collections shall be subject to Escrow Agent’s
usual collection practices or terms regarding items received by Escrow Agent for
deposit or collection. Escrow Agent shall not be required, or have any duty, to
notify anyone of any payment or maturity under the terms of any instrument
deposited hereunder, nor to take any legal action to enforce payment of any
check, note or security deposited hereunder or to exercise any right or
privilege which may be afforded to the holder of any such security.
13. Escrow
Agent shall not be responsible in any respect for the form, execution, validity,
value or genuineness of documents or securities deposited hereunder, or for any
description therein, or for the identity, authority or rights of persons
executing or delivering or purporting to execute or deliver any such document,
security or endorsement.
14. The
Company shall be liable for and shall reimburse and indemnify Escrow Agent and
hold Escrow Agent harmless from and against any and all claims, losses,
liabilities, costs, damages or expenses (including reasonable attorneys’ fees
and expenses) (collectively, “Losses”) arising from or in connection with or
related to this Escrow Agreement or being Escrow Agent hereunder (including but
not limited to Losses incurred by Escrow Agent in connection with the submission
of the Escrow Agent Affidavit to the Director of Banking and Finance of the
State of Nebraska, its reliance on the Company Certificate in connection
therewith, and any Losses incurred by Escrow Agent in connection with its
successful defense, in whole or in part, of any claim of gross negligence or
willful misconduct on its part), provided, however, that nothing contained
herein shall require Escrow Agent to be indemnified for Losses caused by its
gross negligence or willful misconduct.
15. (a) In the
event of any ambiguity or uncertainty hereunder or in any notice, instruction or
other communication received by Escrow Agent hereunder, Escrow Agent may, in its
sole discretion, refrain from taking any action other than retain possession of
the collected funds in the Escrow Account, the New York Escrow Account, and the
Pennsylvania Escrow Account, unless Escrow Agent receives written instructions,
signed by the Company, which eliminates such ambiguity or
uncertainty.
(b) In the
event of any dispute between or conflicting claims by or among the Company
and/or any other person or entity with respect to any of the collected funds in
the Escrow Account, the New York Escrow Account, or the Pennsylvania Escrow
Account, Escrow Agent shall be entitled, in its sole discretion, to refuse to
comply with any and all claims, demands or instructions with respect to such
collected funds so long as such dispute or conflict shall continue, and Escrow
Agent shall not be or become liable in any way to the Company for failure or
refusal to comply with such conflicting claims, demands or instructions. Escrow
Agent
-9-
shall be
entitled to refuse to act until, in its sole discretion, either (i) such
conflicting or adverse claims or demands shall have been determined by a final
order, judgment or decree of a court of competent jurisdiction, which order,
judgment or decree is not subject to appeal, or settled by agreement between the
conflicting parties as evidenced in a writing satisfactory to Escrow Agent or
(ii) Escrow Agent shall have received security or an indemnity satisfactory to
it sufficient to hold it harmless from and against any and all Losses which it
may incur by reason of so acting. Escrow Agent may, in addition, elect, in its
sole discretion, to commence an interpleader action or seek other judicial
relief or orders as it may deem, in its sole discretion, necessary. The costs
and expenses (including reasonable attorneys’ fees and expenses) incurred in
connection with such proceeding shall be paid by, and shall be deemed an
obligation of, the Company.
16. All
communications and notices required or permitted by this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or by
messenger or by overnight delivery service or by facsimile evidenced by a
confirmation of successful transmission, in all cases addressed to the person
for whom it is intended at such person’s address set forth below or to such
other address as a party shall have designated by notice in writing to the other
party in the manner provided by this paragraph:
(a) if to the
Company:
00000
Xxxxxx Xxxxxxx, Xxxxx. 000
Xxxxxxx,
Xxxxx 00000
Fax:
(000) 000-0000
Attention:
President and Chief Executive Officer
(b) if to the
Dealer Manager:
Behringer
Securities LP
00000
Xxxxxx Xxxxxxx, Xxx. 000
Xxxxxxx,
Xxxxx 00000
Fax:
(000) 000-0000
Attention:
Chief Operating Officer of Harvard Property Trust, LLC, General
Partner
(c) if to the
Escrow Agent:
Citibank
Texas, N.A.
One
Lincoln Park
0000
Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx
000
Xxxxxx,
Xxxxx 00000
Fax:
(000) 000-0000
Attention:
Xx. Xxxxxxx XxXxx
Each
party hereto may, from time to time, change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance herewith to the
other parties. Escrow Agent is authorized to comply with and rely upon any
notices, instructions or other communications believed by it to have been sent
or given by the Company or the Dealer Manager or by a person or persons
authorized by such party. Whenever under the terms hereof the time for giving a
notice or performing an act falls upon a Saturday, Sunday, or banking holiday,
such time shall be extended to the next day on which Escrow Agent is open for
business.
-10-
17. This
Agreement shall be interpreted, construed, enforced and administered in
accordance with the internal substantive laws (and not the choice of law rules)
of the State of Texas. The parties hereto hereby submit to the personal
jurisdiction of and agree that all proceedings relating hereto shall be brought
in courts located within the City and State of Texas. The parties hereto hereby
waive the right to trial by jury and to assert counterclaims in any such
proceedings. To the extent that in such jurisdiction the parties may be entitled
to claim, for itself or its assets, immunity from suit, execution, attachment
(whether before or after judgment) or other legal process, the parties hereby
irrevocably agree not to claim, and hereby waive, such immunity. The parties
hereto hereby waive personal service of process and consents to service of
process by certified or registered mail, return receipt requested, directed to
it at the address last specified for notices hereunder, and such service shall
be deemed completed ten (10) calendar days after the same is so
mailed.
18. This
Agreement is for the exclusive benefit of the parties hereto and their
respective legal representatives, successors and assigns hereunder, and shall
not be deemed to give, either express or implied, any legal or equitable right,
remedy, or claim to any other entity or person whatsoever.
19. This
Escrow Agreement and any amendment hereto may be executed by each of the parties
hereto in any number of counterparts, each of which counterpart, when so
executed and delivered, shall be deemed to be an original and all such
counterparts shall together constitute one and the same agreement.
20. The
provisions set forth in paragraphs 8 through 32 of this Agreement shall survive
the termination of this Agreement and/or the resignation or removal of the
Escrow Agent.
21. The
invalidity, illegality or unenforceability of any provision of this Agreement
shall in no way affect the validity, legality or enforceability of any other
provision; and if any provision is held to be enforceable as a matter of law,
the other provisions shall not be affected thereby and shall remain in full
force and effect.
22. Unless
otherwise provided in this Agreement, final termination of this Escrow Agreement
shall occur on the date that all funds held in the Escrow Account, the
Pennsylvania Escrow Account and the New York Escrow Account are distributed
either (a) to the Company or to Subscribers and the Company has informed the
Escrow Agent in writing to close the Escrow Account, the Pennsylvania Escrow
Account and the New York Escrow Account pursuant to paragraph 3 hereof or (b) to
a successor escrow agent upon written instructions from the Company.
23. The
Escrow Agent has no responsibility for accepting, rejecting, or approving
subscriptions.
24. The
Escrow Agent will reasonably cooperate with the Company in fulfilling any of the
Company’s obligations under the Xxxxxxxx-Xxxxx Act of 2002, as such obligations
relate to the provision of services under this Agreement, including assistance
as to the documentation and auditing of Escrow Agent’s procedures.
25. (a) The
Company may remove Escrow Agent at any time by giving to Escrow Agent sixty (60)
calendar days’ prior notice in writing signed by the Company. Escrow Agent may
resign at any time by giving to the Company sixty (60) calendar days’ prior
written notice thereof.
(b) Within
forty-five (45) calendar days after giving the foregoing notice of removal to
Escrow Agent or receiving the foregoing notice of resignation from Escrow Agent,
the
-11-
Company
shall appoint a successor Escrow Agent. If a successor Escrow Agent has not
accepted such appointment by the end of such 45-day period, Escrow Agent may, in
its sole discretion, deliver the collected funds in the Escrow Account, the New
York Escrow Account, and the Pennsylvania Escrow Account to the Company at the
address provided herein or may apply to a court of competent jurisdiction for
the appointment of a successor Escrow Agent or for other appropriate relief. The
costs and expenses (including reasonable attorneys’ fees and expenses) incurred
by Escrow Agent in connection with such proceeding shall be paid by, and be
deemed an obligation of, the Company.
(c) Upon
receipt of the identity of the successor Escrow Agent, Escrow Agent shall either
deliver the collected funds in the Escrow Account, the New York Escrow Account,
and the Pennsylvania Escrow Account then held hereunder to the successor Escrow
Agent, less Escrow Agent’s fees, costs and expenses or other obligations owed to
Escrow Agent, or hold such collected funds (or any portion thereof), pending
distribution, until all such fees, costs and expenses or other obligations are
paid.
(d) Upon
delivery of the collected funds to successor Escrow Agent, Escrow Agent shall
have no further duties, responsibilities or obligations, other than as provided
hereunder.
26. Except as
otherwise permitted herein, this Escrow Agreement may be modified only by a
written amendment signed by all the parties hereto, and no waiver of any
provision hereof shall be effective unless expressed in a writing signed by the
party to be charged.
27. The
rights and remedies conferred upon the parties hereto shall be cumulative, and
the exercise or waiver of any such right or remedy shall not preclude or inhibit
the exercise of any additional rights or remedies. The waiver of any right or
remedy hereunder shall not preclude the subsequent exercise of such right or
remedy.
28. Each
party hereto hereby represents and warrants (a) that this Escrow Agreement has
been duly authorized, executed and delivered on its behalf and constitutes its
legal, valid and binding obligation and (b) that the execution, delivery and
performance of this Escrow Agreement by it does not and will not violate any
applicable law or regulation.
29. This
Agreement shall constitute the entire agreement of the parties with respect to
the subject matter and supersedes all prior oral or written agreements in regard
thereto.
30. No
printed or other material in any language which mentions “Citibank Texas, N.A.”
by name or the rights, powers, or duties of the Escrow Agent under this
Agreement shall be issued by any other parties hereto, or on such party's
behalf, without the prior written consent of Escrow Agent, except that it shall
be mentioned in applicable prospectuses, subscription agreements and other
related documentation in order to accomplish the purposes of this
Agreement.
31. The
headings contained in this Agreement are for convenience of reference only and
shall have no effect on the interpretation or operation hereof.
32. The
Escrow Agent does not have any interest in the collected funds in the Escrow
Account, the New York Escrow Account, and the Pennsylvania Escrow Account but is
serving as escrow holder only and having only possession thereof. The Company
shall pay or reimburse the Escrow Agent upon request for any transfer taxes or
other taxes relating to the Escrow Property incurred in connection herewith and
shall indemnify and hold harmless the Escrow Agent for any amounts that it is
obligated to pay in the way of such taxes. Any payments of income from this
Escrow Account, the New York Escrow
-12-
Account,
and the Pennsylvania Escrow Account shall be subject to withholding regulations
then in force with respect to United States taxes. The Company and/or the Dealer
Manager will provide the Escrow Agent with appropriate Forms W-9 for tax I.D.,
number certifications, or W-8 forms for non-resident alien certifications. All
Subscribers shall have a United States tax identification number, and no
subscriptions from Subscribers who do not have a United States tax
identification number shall be accepted by the Company, Dealer Manager or the
Escrow Agent without the written consent of the Escrow Agent. It is understood
that the Escrow Agent shall be responsible for income reporting only with
respect to income earned on investment of funds which are a part of the
collected funds and is not responsible for any other reporting.
[Signature
page follows]
-13-
Agreed to
as of the 2nd
day of September, 2005.
BEHRINGER HARVARD OPPORTUNITY REIT I, INC. | ||
|
|
|
By: | /s/ Xxxxxx X. Xxxxxxx, III | |
Xxxxxx X. Xxxxxxx, III | ||
Executive Vice President |
BEHRINGER SECURITIES LP | ||
|
By: |
Harvard Property Trust, LLC, Its General Partner |
By: | /s/ Xxxxxx X. Xxxxxxx, III | |
Xxxxxx X. Xxxxxxx, III | ||
Executive Vice President |
The terms
and conditions contained above are hereby accepted and agreed to by:
CITIBANK TEXAS, N.A., AS ESCROW AGENT | ||
|
|
|
By: | /s/ Xxxxx Xxxxxxx XxXxx | |
Xxxxx Xxxxxxx XxXxx, Vice President | ||
-14-
EXHIBIT
A-1
FORM
OF ESCROW AGENT AFFIDAVIT FOR NEBRASKA
STATE
OF ____________________
COUNTY
OF ____________________
ESCROW
AGENT AFFIDAVIT
____________________
(the “Affiant”), being duly sworn, deposes and says:
That the
Affiant is a duly appointed and authorized representative of ____________ (the
“Escrow Agent”);
That the
Escrow Agent is the duly appointed and authorized escrow agent for the public
offering of the securities (the “Offering”) of Behringer Harvard Opportunity
REIT I, Inc. (the “Company”);
That all
of the conditions of that certain Escrow Agreement entered into by and among the
Escrow Agent, the Company, and Behringer Securities LP in connection with the
Offering and effective as of the ____ day of August, 2005 (the “Agreement”) have
been met.
Affiant
makes this Affidavit to the State of Nebraska Department of Banking and Finance
pursuant to Nebraska regulations Chapter 25, Section 003.01C1 promulgated under
§8-1120(3) of the Securities Act of Nebraska.
IN
WITNESS WHEREOF, the
undersigned has duly executed this document this ____ day of _____________,
20__.
By: | ___________________________________________ | |
Name: | ___________________________________________ | |
Sworn to
and subscribed before me
this ____
day of ___________, 20__.
______________________________
Notary
Public
My
commission expires:____________
(NOTARIAL
SEAL)
EXHIBIT
A-2
FORM
OF COMPANY CERTIFICATE FOR ESCROW AGENT AFFIDAVIT FOR
NEBRASKA
COMPANY
CERTIFICATE FOR ESCROW AGENT AFFIDAVIT
The
undersigned, the duly authorized officer as indicated of Behringer Harvard
Opportunity REIT I, Inc., a Maryland corporation (the “Company”), hereby
certifies to Citibank Texas, N.A. (the “Escrow Agent”) under the Escrow
Agreement (as defined below) on behalf of the Company by the Company that all of
the conditions of that certain Escrow Agreement entered into by and among the
Escrow Agent, the Company, and Behringer Securities LP in connection with the
public offering of securities by the Company (the “Offering”) and effective as
of the ___ day of August, 2005 (the “Escrow Agreement”) have been
met.
The
Escrow Agent shall be entitled to rely on this Certificate in making its
Affidavit to the State of Nebraska Department of Banking and Finance pursuant to
Nebraska regulations Chapter 25, Section 003.01C1 promulgated under
§8-1120(3) of the Securities Act of Nebraska in connection with the Offering and
shall be held harmless and indemnified in respect thereof, as provided in the
Escrow Agreement.
IN
WITNESS WHEREOF, the
undersigned has duly executed this document this ____ day of _____________,
20__.
By: | ___________________________________________ | |
Name: | ___________________________________________ | |
EXHIBIT
B
FORM
OF COMPANY AFFIDAVIT
STATE
OF ____________________
COUNTY
OF ____________________
COMPANY
AFFIDAVIT
____________________
(the "Affiant"), being duly sworn, deposes and says:
That the
Affiant is a duly appointed and authorized officer of Behringer Harvard
Opportunity REIT I, Inc. (the “Company”);
That the
State of Nebraska Department of Banking and Finance declared effective the
public offering of the Company’s securities to residents of the state of
Nebraska (the “Offering”) as of the ____ day of _______________, 20__ (the
“Effective Date”);
That
since the Effective Date, there have been no material omissions or changes in
the financial condition of the Company, or other changes of circumstances, that
would render the amount of proceeds inadequate to finance the Company’s proposed
plan of operations, business, or enterprise;
That
since the Effective Date, there have been no material omissions or changes that
would render the representations in the Company’s registration statement
fraudulent, false, or misleading.
Affiant
makes this Affidavit to the State of Nebraska Department of Banking and Finance
pursuant to Nebraska regulations Chapter 25, Section 003.01C2 promulgated under
§8-1120(3) of the Securities Act of Nebraska.
IN
WITNESS WHEREOF, the
undersigned has duly executed this document this ____ day of _____________,
20__.
By: | ___________________________________________ | |
Name: | ___________________________________________ | |
Sworn to
and subscribed before me
this ____
day of ___________, 20__.
______________________________
Notary
Public
My
commission expires:____________
(NOTARIAL
SEAL)
EXHIBIT
C
FORM
OF NOTICE TO PENNSYLVANIA SUBSCRIBERS
You have
tendered a subscription to purchase shares of common stock of Behringer Harvard
Opportunity REIT I, Inc. (the “Company”). Your subscription is currently being
held in escrow. The guidelines of the Pennsylvania Securities Commission do not
permit the Company to accept subscriptions from Pennsylvania residents until an
aggregate of $23,800,000 of gross offering proceeds have been received by the
Company. The Pennsylvania guidelines provide that until this minimum amount of
offering proceeds is received by the Company, every 120 days during the offering
period Pennsylvania Subscribers may request that their subscription be returned.
If you
wish to continue your subscription in escrow until the Pennsylvania minimum
subscription amount is received, nothing further is required.
If you
wish to terminate your subscription for the Company’s common stock and have your
subscription returned please so indicate below, sign, date, and return to the
Escrow Agent at Citibank Texas, N.A., _______________________, Attn:
_______________.
I hereby
terminate my prior subscription to purchase shares of common stock of Behringer
Harvard Opportunity REIT I, Inc. and request the return of my subscription
funds. I certify to Behringer Harvard Opportunity REIT I, Inc. that I am a
resident of Pennsylvania.
Signature: | ____________________________________________ | |
Name: |
____________________________________________
(please print) | |
Date: |
____________________________________________ | |
Please
send the subscription refund to:
______________________________
______________________________
______________________________
______________________________
EXHIBIT
D
ESCROW
AGENT COMPENSATION
Acceptance
Fee: $1,000.00
For
initial services including examination of the Escrow Agreement and all
supporting documents as well as database development. This is a one-time fee
payable upon the execution of the Escrow Agreement.
Annual
Administration Fee: $3,000.00
This
annual administration fee covers standard services required under the documents.
Also includes periodic disbursements to company. An additional charge of $500
per subaccount will be billed for accounts opened in connection with certain
state regulations (estimate of 2-3). Transaction charges noted below apply for
certain responsibilities including payments to subscribers. This fee is payable
upon the execution of the Escrow Agreement and annually thereafter for any
12-month period or portion thereof. This fee shall be reviewed at the end of the
first year and may be renegotiated in accordance with new volume
estimates.
Transaction
Fees:
Wire
transfer of funds to investors |
$15.00
per item |
Check
transfer of funds to investors |
$15.00
per item |
Receipt
and posting of incoming wires |
No
charge |
Receipt
and posting of incoming check |
No
charge |
Asset
transactions (purchases/sales/calls/deposit/withdrawals,
etc.) |
$25.00
per transaction |
1099
INT Tax reporting |
$25.00
per form |
ACH
transfer of funds |
No
charge |
Electronic
predetermined reports |
No
charge |
Interest
calculations |
No
charge |
Extraordinary
Services:
Additional
reasonable compensation will be charged for extraordinary services based on the
then current standard hourly charge. Extraordinary services include, but are not
limited to, attending escrow closings, processing assignments of escrow
interest, specialized reports (e.g., tax reporting other than 1099s), unusual
certifications, reviewing and accepting modifications or amendments to the
escrow agreement, and letter of credit draws, etc. You will be informed in
advance of Citibank Texas, N.A.’s performance
of services that are considered extraordinary.
Any
overdrafts caused by failed or incomplete wires of funds or failed or incomplete
securities deliveries will be reimbursable to Citibank Texas, N.A. at prime
plus two percent (2%).
All
out-of-pocket expenses incurred in the administration of the account, including,
but not limited to, postage, telephone charges, insurance, photocopies,
supplies, and legal fees with the exception of legal fees incurred at the
inception of the account, will be billed to the customer at cost.
Xxxxxxxx
over 30 days past due are subject to a 1.5% per month late payment penalty of
the balance due.