BEHRINGER HARVARD OPPORTUNITY REIT I, INC. Up to 48,000,000 Shares of Common Stock/$476,000,000 FORM OF DEALER MANAGER AGREEMENT
EXHIBIT
1.1
Up to
48,000,000 Shares of Common Stock/$476,000,000
FORM
OF
DEALER
MANAGER AGREEMENT
______________,
2005
Behringer
Securities LP
00000
Xxxxxx Xxxxxxx
Xxxxx
000
Xxxxxxx,
Xxxxx 00000
Ladies
and Gentlemen:
Behringer
Harvard Opportunity REIT I, Inc., a Maryland corporation (the “Company”), is
registering for public sale a maximum of 48,000,000 shares of its common stock,
$0.0001 par value per share, (the “Shares” or the “Stock”) to be issued and sold
for an aggregate purchase price of $476,000,000 (40,000,000 Shares to be offered
to the public for $10.00 per share and 8,000,000 Shares to be offered pursuant
to the Company’s distribution reinvestment plan for a maximum of $9.50 per
share). There shall be a minimum purchase by any one person of 200 Shares
(except as otherwise indicated in the Prospectus (defined below) or in any
letter or memorandum from the Company to Behringer Securities LP (the “Dealer
Manager”)). Terms not defined herein shall have the same meaning as in the
Prospectus. In connection therewith, the Company hereby agrees with you, the
Dealer Manager, as follows:
1. Representations
and Warranties of the Company
The
Company 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 Company has been prepared by the
Company 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 Shares. Such
registration statement, which includes a preliminary prospectus, was initially
filed with the SEC on or about November ___, 2004. 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 Company 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
Company has been duly and validly organized and formed as a corporation under
the laws of the state of Maryland, 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
Company specifically for inclusion therein.
1.4 The
Company intends to use the funds received from the sale of the Shares 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 Company of this
Agreement or the issuance and sale by the Company of the Shares, 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 Company,
threatened against the Company 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 Company.
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
Company will not conflict with or constitute a default under any charter, bylaw,
indenture, mortgage, deed of trust, lease, rule, regulation, writ, injunction or
decree of any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Company, 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
Company 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 Shares, the Shares 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.
2. Covenants
of the Company
The
Company 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,
supplements and exhibits thereto, as the Dealer Manager may reasonably request.
It will similarly furnish to the Dealer Manager and others designated by the
Dealer Manager as many copies as the Dealer Manager may reasonably request in
connection with the offering of the Shares 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 Company 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 Company to qualify the Shares for offer and sale under the
securities laws of such jurisdictions as the Dealer Manager may reasonably
designate and will file and make in each year such
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statements and reports as may be required. The Company will furnish to
the Dealer Manager a copy of such papers filed by the Company 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 Company 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 Company 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 Company 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
Company hereby appoints the Dealer Manager as its agent and principal
distributor for the purpose of selling for cash up to a maximum of 44,000,000
Shares through Dealers, all of whom shall be members of the National Association
of Securities Dealers, Inc. (NASD). The Dealer Manager may also sell Shares 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 Shares on said terms and conditions. The Dealer Manager
represents to the Company that (i) it is a member of the NASD; (ii) it and its
employees and representatives have all required licenses and registrations to
act under this Agreement; and (iii) it has established and implemented
anti-money laundering compliance programs in accordance with applicable law,
including applicable NASD rules, SEC rules and the USA PATRIOT Act of 2001 or
will require that its Dealers establish such programs, reasonably expected to
detect and cause the reporting of suspicious transactions in connection with the
sale of Shares of the Company. The Dealer Manager agrees to be bound by the
terms of the Escrow Agreement executed as of _______________, 2005 among
________________, as escrow agent, the Dealer Manager and the Company, a copy of
which is enclosed (the “Escrow Agreement”).
3.2 Promptly
after the effective date of the Registration Statement, the Dealer Manager and
the Dealers shall commence the offering of the Shares for cash to the public in
jurisdictions in which the Shares 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 Shares upon request of the Company at
any time and will resume offering the Shares upon subsequent request of the
Company.
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 Company agrees
that it will pay to the Dealer Manager selling commissions as set forth in the
“Plan of Distribution” Section of the Prospectus plus a dealer manager fee as
set forth in the “Plan of Distribution” Section of the Prospectus.
Notwithstanding the foregoing, no commissions, payments or amount whatsoever
will be paid to the Dealer Manager under this Section 3.3 unless or until
subscriptions for the purchase of Shares have been accepted by the Company and
the gross proceeds of the Shares sold are disbursed to the Company pursuant to
paragraph 3(a) of the Escrow Agreement. Until the Required Capital or the
Pennsylvania Required Capital (as applicable and as defined in the Escrow
Agreement) is obtained, investments will
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be held
in escrow and, if the Required Capital or the Pennsylvania Required Capital, as
applicable, is not obtained, investments will be returned to the investors in
accordance with the Prospectus. The Company 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 its discretion, the Company may act as
agent of the Dealer Manager by making direct payment of commissions to such
Dealers without incurring any liability therefor. With respect to Shares sold
pursuant to the Company’s distribution reinvestment plan, the Dealer Manager
agrees to reduce its dealer manager fee to the percentage, if any, of the gross
proceeds of the Shares sold pursuant to the distribution reinvestment plan set
forth in the “Plan of Distribution” Section of the Prospectus..
3.4 The
Dealer Manager represents and warrants to the Company, each owner, director,
officer and employee of the Company and each person that signs the Registration
Statement that the information under the caption “Plan of Distribution” in the
Prospectus and all other information furnished to the Company by the Dealer
Manager in writing expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus, or any amendment or supplement thereto
does not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
3.5 The
Dealer Manager shall use and distribute in conjunction with the offer and sale
of any Shares only the Prospectus (as it may be supplemented or amended from
time-to-time) and such sales literature and advertising as shall have been
previously approved in writing by the Company.
3.6 The
Dealer Manager and the Dealers shall cause Shares to be offered and sold only in
such jurisdictions where the Dealer Manager and the respective Dealer are
licensed to do so. In addition, the Dealer Manager shall cause Shares to be
offered and sold only in those jurisdictions specified in writing by the Company
where the offering and sale of its Shares have been authorized by appropriate
regulatory authorities and such list of jurisdictions shall be updated by the
Company as additional states are added. No Shares shall be offered or sold for
the account of the Company in any other jurisdiction.
3.7 The
Dealer Manager represents and warrants to the Company 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 Company, or
has approved, endorsed or passed upon the merits of the Shares or the Company,
nor will it use the name of said escrow agent in any manner whatsoever in
connection with the offer or sale of the Shares other than by acknowledgment
that it has agreed to serve as escrow agent.
4. Indemnification
4.1 The
Company 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 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 Company or on
its behalf specifically for the purpose of qualifying any or all of the Shares
for sale under the securities laws of any jurisdiction or based upon written
information furnished by the Company 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
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Registration
Statement (including the Prospectus as a part thereof) or any post-effective
amendment thereof or in any Blue Sky Application a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(c) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, if used prior to the effective date of
the Registration Statement, or in the Prospectus or any amendment or supplement
to the Prospectus or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and will reimburse each Dealer or Dealer Manager, its officers
and each such controlling person for any legal or other expenses reasonably
incurred by such Dealer or Dealer Manager, its officers and directors, or such
controlling person in connection with investigating or defending such loss,
claim, damage, liability or action; provided that the Company 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 Company 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 Company will not be liable in
any such case if it is determined that such Dealer or Dealer Manager was at
fault in connection with the loss, claim, damage, liability or action.
Notwithstanding the foregoing, the Company may not indemnify or hold harmless
the Dealer Manager, any Dealer or any of their affiliates in any manner that
would be inconsistent with the provisions of Section II.G. of the Statement of
Policy Regarding Real Estate Investment Trusts of the North American Securities
Administrators Association, Inc. effective September 29, 1993, as amended (the
“NASAA REIT Guidelines”). In particular, but without limitation, the Company may
not indemnify or hold harmless the Dealer Manager, any Dealer or any of their
affiliates for liabilities arising from or out of a violation of state or
federal securities laws, unless one or more of the following conditions are
met:
| (a) |
there
has been a successful adjudication on the merits of each count involving
alleged securities law violations; |
| (b) |
such
claims have been dismissed with prejudice on the merits by a court of
competent jurisdiction; or |
| (c) |
a
court of competent jurisdiction approves a settlement of the claims
against the indemnitee and finds that indemnification of the settlement
and the related costs should be made, and the court considering the
request for indemnification has been advised of the position of the SEC
and of the published position of any state securities regulatory authority
in which the securities were offered as to indemnification for violations
of securities laws. |
4.2 The
Dealer Manager will indemnify and hold harmless the Company and each person or
firm which has signed the Registration Statement and each person, if any, who
controls the Company 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
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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 Company 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 Shares by the Dealer Manager, or (e) any failure
to comply with applicable laws governing money laundry abatement and
anti-terrorist financing efforts, including applicable NASD rules, SEC rules and
the USA PATRIOT Act of 2001, and will reimburse the aforesaid parties, in
connection with investigation or defending such loss, claim, damage, liability
or action. This indemnity agreement will be in addition to any liability which
the Dealer Manager may otherwise have.
4.3 Each
Dealer severally will indemnify and hold harmless the Company, Dealer Manager
and each of their 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 Company and the Dealer Manager within the
meaning of Section 15 of the Securities Act from and against any losses, claims,
damages or liabilities to which the Company, the Dealer Manager, any such
director or officer, or controlling person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (a)
any untrue statement or alleged untrue statement of a material fact contained
(i) in the Registration Statement (including the Prospectus as a part thereof)
or any post-effective amendment thereof or (ii) in any Blue Sky Application, or
(b) the omission or alleged omission to state in the Registration Statement
(including the Prospectus as a part thereof or any post-effective amendment
thereof or in any Blue Sky Application a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (c) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, if used prior to the effective date of the Registration
Statement, or in the Prospectus, or in any amendment or supplement to the
Prospectus or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company 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 Shares by
such Dealer or Dealer’s representations or agents in violation of Section VII of
the Selected Dealer Agreement or otherwise, or (e) any failure to comply
with applicable laws governing money laundry abatement and anti-terrorist
financing efforts, including applicable NASD rules, SEC rules and the USA
PATRIOT Act of 2001, and will reimburse the Company and the Dealer Manager and
any such directors or officers, or controlling person, in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which such Dealer
may otherwise have.
4.4 Promptly
after receipt by an indemnified party under this Section 4 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 4,
notify in writing the indemnifying party of the commencement thereof and the
omission so to notify the indemnifying party will relieve such indemnifying
party from any liability under this Section 4 as to the particular item for
which indemnification is then being sought, but not from any other liability
which it may have to any
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indemnified
party. In case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to participate in the defense thereof,
with separate counsel. Such participation shall not relieve such indemnifying
party of the obligation to reimburse the indemnified party for reasonable legal
and other expenses (subject to Section 4.5) incurred by such indemnified party
in defending itself, except for such expenses incurred after the indemnifying
party has deposited funds sufficient to effect the settlement, with prejudice,
of the claim in respect of which indemnity is sought. Any such indemnifying
party shall not be liable to any such indemnified party on account of any
settlement of any claim or action effected without the consent of such
indemnifying party.
4.5 The
indemnifying party shall pay all legal fees and expenses of the indemnified
party in the defense of such claims or actions; provided, however, that the
indemnifying party shall not be obligated to pay legal expenses and fees to more
than one law firm in connection with the defense of similar claims arising out
of the same alleged acts or omissions giving rise to such claims notwithstanding
that such actions or claims are alleged or brought by one or more parties
against more than one indemnified party. If such claims or actions are alleged
or brought against more than one indemnified party, then the indemnifying party
shall only be obliged to reimburse the expenses and fees of the one law firm
that has been selected by a majority of the indemnified parties against which
such action is finally brought; and in the event a majority of such indemnified
parties is unable to agree on which law firm for which expenses or fees will be
reimbursable by the indemnifying party, then payment shall be made to the first
law firm of record representing an indemnified party against the action or
claim. Such law firm shall be paid only to the extent of services performed by
such law firm and no reimbursement shall be payable to such law firm on account
of legal services performed by another law firm.
4.6 The
indemnity agreements contained in this Section 4 shall remain operative and in
full force and effect regardless of (a) any investigation made by or on behalf
of any Dealer, or any person controlling any Dealer or by or on behalf of the
Company, the Dealer Manager or any officer or director thereof, or by or on
behalf of the Company or the Dealer Manager, (b) delivery of any Shares 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 Company 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
Company or any person controlling the Company, and (c) the acceptance of any
payment for the Shares.
6. Applicable
Law; Venue
This
Agreement was executed and delivered in, and its validity, interpretation and
construction shall be governed by the laws of, the State of Texas; provided
however, that causes of action for violations of federal or state securities
laws shall not be governed by this Section. Venue for any action brought
hereunder shall lie exclusively in Dallas, Texas.
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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
and the Company 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
Company.
9. Term
This
Agreement may be terminated by either party (i) immediately upon notice to the
other party in the event that the other party shall have materially failed to
comply with any of the material provisions of this Agreement on its part to be
performed during the term of this Agreement or if any of the representations,
warranties, covenants or agreements of such party contained herein shall not
have been materially complied with or satisfied within the times specified or
(ii) by either party on 60 days’ written notice.
In any
case, this Agreement shall expire at the close of business on the effective date
that the Offering is terminated. The provisions of Section 4 hereof shall
survive such termination. In addition, the Dealer Manager, upon the expiration
or termination of this Agreement, shall (i) promptly deposit any and all funds
in its possession which were received from investors for the sale of Shares into
the appropriate escrow account or, if the minimum number of Shares have been
sold and accepted by the Company, into such other account as the Company may
designate; and (ii) promptly deliver to the Company all records and documents in
its possession which relate to the Offering and are not designated as dealer
copies. The Dealer Manager, at its sole expense, may make and retain copies of
all such records and documents, but shall keep all such information
confidential. The Dealer Manager shall use its best efforts to cooperate with
the Company to accomplish an orderly transfer of management of the Offering to a
party designated by the Company. Upon expiration or termination of this
Agreement, the Company shall pay to the Dealer Manager all commissions to which
the Dealer Manager is or becomes entitled under Section 3 at such time as such
commissions become payable.
10. Confirmation
The
Company hereby agrees and assumes the duty to confirm on its behalf and on
behalf of dealers or brokers who sell the Shares all orders for purchase of
Shares accepted by the Company. 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 Company is advised of such laws in writing by
the Dealer Manager.
11. Suitability
of Investors
The
Dealer Manager will offer Shares, and in its agreements with Dealers will
require that the Dealers offer Shares, 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 Company and will only make offers to persons in the
states in which it is advised in writing that the Shares are qualified for sale
or that such qualification is not required. In offering Shares, the Dealer
Manager will, and in its agreements with Dealers, the Dealer Manager will
require that the Dealers will, comply with the provisions of all applicable
rules and regulations relating to suitability of investors, including without
limitation, the provisions of Article III.C. of the NASAA REIT Guidelines.
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12. Submission
of Orders
12.1 Until
such time as the Company has received and accepted subscriptions for at least
200,000 shares and released the proceeds from such subscriptions from escrow (or
such greater amount as may be applicable in respect of any greater escrow in
respect of subscribers from any state), those persons who purchase Shares will
be instructed by the Dealer Manager or the Dealer to make their checks payable
to “The Bank of New York, as escrow agent for Behringer Harvard Opportunity REIT
I, Inc.” Thereafter, in the discretion of the Dealer Manager upon notice to the
Dealer, those persons who purchase shares will be instructed by the Dealer to
make their checks payable to “Behringer Harvard Opportunity REIT I, Inc.” The
Dealer Manager and any Dealer receiving a check not conforming to the foregoing
instructions shall return such check directly to such subscriber not later than
the end of the next business day following its receipt. Checks received by the
Dealer Manager or Dealer which conform to the foregoing instructions shall be
transmitted for deposit pursuant to one of the methods described in this Section
12. Transmittal of received investor funds will be made in accordance with the
following procedures. The Dealer Manager may authorize certain Dealers which are
“$250,000 broker-dealers” to instruct their customers to make their checks for
Shares subscribed for payable directly to the Dealer. In such case, the Dealer
will collect the proceeds of the subscribers’ checks and issue a check for the
aggregate amount of the subscription proceeds made payable to the order of the
escrow agent, or if instructed by the Dealer Manager as provided above, made
payable to the order of the Company.
12.2 If a
Dealer conducts its internal supervisory procedures at the location where
subscription documents and checks are initially received, the Dealer shall
forward (i) the subscription documents to the Dealer Manager and
(ii) the checks to the escrow agent or the Dealer Manager, as applicable,
by noon of the next business day following receipt of the subscription documents
and the check.
12.3 If a
Dealer’s internal supervisory procedures are to be performed at a different
location (the “Final Review Office”), the subscription documents and check must
be transmitted to the Final Review Office by the end of the next business day
following receipt of the subscription documents and check by the Dealer. The
Final Review Office will, by the next business day following receipt of the
subscription documents and check, forward both the subscription documents and
check to the Dealer Manager as processing broker-dealer in order that the Dealer
Manager may complete its review of the documentation and process the
subscription documents and check.
12.4 Any check
received by the Dealer Manager directly or as processing broker-dealer from the
Dealers will, in all cases, be forwarded to the escrow agent as soon as
practicable, but in any event by the end of the second business day following
receipt by the Dealer Manager of the subscription documents and check. Checks of
rejected subscribers will be promptly returned to such subscribers.
12.5 If
requested by the Company, the Dealer Manager shall obtain, and shall cause the
Dealers to obtain, from subscribers for the Shares, other documentation
reasonably deemed by the Company to be required under applicable law or as may
be necessary to reflect the policies of the Company. Such documentation may
include, without limitation, subscribers’ written acknowledgement and agreement
to the privacy policies of the Company.
13. Selected
Investment Advisor Agreement
With
respect to any provision of information concerning the Offering by a selected
investment advisor (the “Investment Advisor”) presently registered under the
Investment Advisers Act of 1940, as amended, and presently and appropriately
registered in each state in which the Investment Advisor has clients, the
Company and the Investment Advisor shall enter into a Selected Investment
Advisor Agreement in substantially the form attached hereto as Exhibit
B.
-9-
14. Notices
Any
notice, approval, request, authorization, direction or other communication under
this Agreement shall be given in writing and shall be deemed to be delivered
when delivered in person or deposited in the United States mail, properly
addressed and stamped with the required postage, registered or certified mail,
return receipt requested, to the intended recipient as set forth
below:
|
If
to the Company: |
00000
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Attention:
Chairman of the Board |
|
If
to the Dealer Manager: |
Behringer
Securities LP
00000
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
Attention:
President |
Any party
may change its address specified above by giving the other party notice of such
change in accordance with this Section 14.
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,
By:
__________________________________________
Xxxxxx X. Xxxxxxx, III, Executive Vice President
|
Accepted
and agreed as of the
date
first above written.
BEHRINGER
SECURITIES LP
By: HARVARD
PROPERTY TRUST, LLC
General
Partner
By:
_______________________________________
Xxxxxx X.
Xxxxxxx, III, Executive Vice President
-10-
EXHIBIT
A
Up to
44,000,000 Shares of Common Stock/$476,000,000
Ladies
and Gentlemen:
Behringer
Securities LP, as the dealer manager (“Dealer Manager”) for Behringer Harvard
Opportunity REIT I, Inc. (the “Company”), a Maryland corporation, invites you
(the “Dealer”) to participate in the distribution of shares of common stock
(“Shares”) of the Company subject to the following terms:
I. Dealer
Manager Agreement
The
Dealer Manager has entered into an agreement with the Company called the Dealer
Manager Agreement dated ________________, 2005, in the form attached hereto as
Exhibit A (the “Dealer Manager Agreement”, the terms of the Dealer Manager
Agreement relating to the Dealer are incorporated herein by reference as if set
forth verbatim and capitalized terms not otherwise defined herein shall have the
meanings given them in the Dealer Manager Agreement). By your acceptance of this
Agreement, you will become one of the Dealers referred to in the Dealer Manager
Agreement and will be entitled and subject to the indemnification provisions
contained in the Dealer Manager Agreement, including the provisions of the
Dealer Manager Agreement wherein the Dealers severally agree to indemnify and
hold harmless the Company, the Dealer Manager and each officer and director
thereof, and each person, if any, who controls the Company and the Dealer
Manager within the meaning of the Securities Act of 1933, as amended (the
“Securities Act”). Except as otherwise specifically stated herein, all terms
used in this Agreement have the meanings provided in the Dealer Manager
Agreement. The Shares 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 Shares 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 Company, and Dealer is not authorized to act for
the Dealer Manager or the Company 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 Company to supplement the
Prospectus (“supplemental information”).
II. Submission
of Orders
Until
such time as the Company has received and accepted subscriptions for at least
200,000 shares and released the proceeds from such subscriptions from escrow (or
such greater amount as may be applicable in respect of any greater escrow in
respect of subscribers from any state), those persons who purchase Shares will
be instructed by the Dealer to make their checks payable to “The Bank of New
York, as escrow agent for Behringer Harvard Opportunity REIT I, Inc.”
Thereafter, in the discretion of the Dealer Manager upon notice to the Dealer,
those persons who purchase shares will be instructed by the Dealer to make their
checks payable to “Behringer Harvard Opportunity REIT I, Inc.” Any Dealer
receiving a check not conforming to the foregoing instructions shall return such
check directly to such subscriber not later than the end of the next business
day following its receipt. Checks received by the Dealer which conform to the
foregoing instructions shall be transmitted for deposit pursuant to one of the
methods in this Article II. The Dealer Manager may authorize Dealer if Dealer is
a “$250,000 broker-dealer” to instruct its customers to make its checks for
Shares subscribed for payable directly to the Dealer, in which case the Dealer
will collect the proceeds of the subscriber’s checks
A-1
and issue
a check for the aggregate amount of the subscription proceeds made payable to
the order of the escrow agent, or if the Company has received and accepted
subscriptions for at least 200,000 shares and released the proceeds from such
subscriptions from escrow, made payable to the order of the Company. Transmittal
of received investor funds will be made in accordance with the following
procedures:
(a) If the
Dealer conducts its internal supervisory procedures at the location where
subscription documents and checks are initially received, the Dealer shall
forward (i) the subscription documents to the Dealer Manager and
(ii) the checks to the escrow agent or the Dealer Manager, as applicable,
by noon of the next business day following receipt of the subscription documents
and the check.
(b) If the
internal supervisory procedures are to be performed at a different location (the
“Final Review Office”), the subscription documents and check must be transmitted
to the Final Review Office by the end of the next business day following receipt
of the subscription documents and check by the Dealer. The Final Review Office
will, by the next business day following receipt of the subscription documents
and check, forward both the subscription documents and check to the Dealer
Manager as processing broker-dealer in order that the Dealer Manager may
complete its review of the documentation and process the subscription documents
and check.
If
requested by the Company or the Dealer Manager, the Dealer shall obtain from
subscribers for the Shares, other documentation reasonably deemed by the Company
or the Dealer Manager to be required under applicable law or as may be necessary
to reflect the policies of the Company or the Dealer Manager. Such documentation
may include, without limitation, subscribers’ written acknowledgement and
agreement to the privacy policies of the Company or the Dealer
Manager.
III. Pricing
Shares
shall be offered to the public at the offering price of $10.00 per Share payable
in cash, provided, however, that Shares shall be offered to the public pursuant
to the Company’s distribution reinvestment plan for a maximum purchase price of
$9.50 per Share, subject to the terms and pricing information provided in the
Prospectus and the Distribution Reinvestment Plan attached thereto. Except as
otherwise indicated in the Prospectus or in any letter or memorandum sent to the
Dealer by the Company or Dealer Manager, a minimum initial purchase of 200
Shares is required. Except as otherwise indicated in the Prospectus, additional
investments may be made in cash in minimal increments of at least 2.5 Shares.
The Shares are nonassessable. The Dealer hereby agrees to place any order for
the full purchase price.
IV. Dealers’
Commissions
Except
for discounts described in or as otherwise provided in the “Plan of
Distribution” Section of the Prospectus, the Dealer’s selling commission
applicable to the total public offering price of Shares sold by Dealer which it
is authorized to sell hereunder is the percentage of the gross proceeds of
Shares sold by it and accepted and confirmed by the Company set forth under
“Selling Commissions” in the “Plan of Distribution” Section of the Prospectus,
which commission will be paid by the Dealer Manager. For these purposes, a “sale
of Shares” shall occur if and only if a transaction has closed with a securities
purchaser pursuant to all applicable offering and subscription documents and the
Company 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 Company. The Dealer affirms that the Dealer
Manager’s liability for commissions payable is limited solely to the proceeds of
commissions receivable associated therewith. In addition, as set forth in the
Prospectus, the Dealer Manager may reallow out of its dealer manager fee a
marketing fee and due diligence expense reimbursement up to the limits set forth
in the “Plan of Distribution” Section of the Prospectus, based on such factors
as the number of Shares sold by such participating Dealer, the assistance of
such participating Dealer in marketing the offering of Shares, and bona fide
conference fees incurred.
A-2
Dealer
acknowledges and agrees that no commissions, payments or amount whatsoever will
be paid to the Dealer unless or until the gross proceeds of the Shares sold are
disbursed to the Company pursuant to paragraph 3(a) of the Escrow Agreement.
Until the Required Capital or the Pennsylvania Required Capital, as applicable
and as defined in the Escrow Agreement, is obtained, investments will be held in
escrow and, if the Required Capital or the Pennsylvania Required Capital, as
applicable, is not obtained, investments will be returned to the investors in
accordance with the Prospectus.
The
parties hereby agree that the foregoing commission is not and will not be in
excess of the usual and customary distributors’ or sellers’ commission received
in the sale of securities similar to the Shares, that Dealer’s interest in the
offering is limited to such commission from the Dealer Manager and Dealer’s
indemnity referred to in Section 4 of the Dealer Manager Agreement, that the
Company is not liable or responsible for the direct payment of such commission
to the Dealer.
V. Payment
Payments
of selling commissions will be made by the Dealer Manager (or by the Company as
provided in the Dealer Manager Agreement) to Dealer within 30 days of the
receipt by the Dealer Manager of the gross commission payments from the Company.
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 Company, which reserves the right
to reject any order for any or no reason. Orders not accompanied by a
Subscription Agreement and Signature Page and the required check in payment for
the Shares may be rejected. Issuance and delivery of the Shares will be made
only after actual receipt of payment therefor. If any check is not paid upon
presentment, or if the Company is not in actual receipt of clearinghouse funds
or cash, certified or cashier’s check or the equivalent in payment for the
Shares within 15 days of sale, the Company 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 Shares 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 Shares 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 Shares to
members of the public. Dealer agrees that it will not use in connection with the
offer or sale of Shares any material or writing which relates to another Company
supplied to it by the Company 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 Company to which it relates. Dealer further
agrees that it will not use in connection with the offer or sale of Shares 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
A-3
compliance
with the provisions of Rule 15c2-8 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). Regardless of the termination of this Agreement,
Dealer will deliver a Prospectus in transactions in the Shares for a period of
90 days from the effective date of the Registration Statement or such longer
period as may be required by the Exchange Act. On becoming a Dealer, and in
offering and selling Shares, Dealer agrees to comply with all the applicable
requirements under the Securities Act and the Exchange Act.
VIII.
License
and Association Membership
Dealer’s
acceptance of this Agreement constitutes a representation to the Company and the
Dealer Manager that Dealer is a properly registered or licensed broker-dealer,
duly authorized to sell Shares under Federal and state securities laws and
regulations and in all states where it offers or sells Shares, 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 comply with the Conduct Rules of the NASD, including but
not limited to Rules 2730, 2740, 2420 and 2750.
IX.
Anti-Money
Laundering Compliance Programs
Dealer
represents to the Company and the Dealer Manager that Dealer has established and
implemented anti-money laundering compliance programs in accordance with
applicable law, including applicable NASD rules, SEC rules and the USA PATRIOT
Act of 2001, reasonably expected to detect and cause the reporting of suspicious
transactions in connection with the sale of Shares of the Company.
X.
Limitation
of Offer
Dealer
will offer Shares 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 Company or the Dealer Manager and will only make offers to persons in the
states in which it is advised in writing that the Shares are qualified for sale
or that such qualification is not required. In offering Shares, Dealer will
comply with the provisions of the NASD Conduct Rules set forth in the NASD
Manual, 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 Investment
Trusts of the North American Securities Administrators Association, Inc.
XI. Termination
Dealer
will suspend or terminate its offer and sale of Shares upon the request of the
Company or the Dealer Manager at any time and will resume its offer and sale of
Shares hereunder upon subsequent request of the Company 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 Shares after he has received such notice.
XII.
Privacy
Laws
The
Dealer Manager and Dealer (each referred to individually in this section as
"party") agree as follows:
(a) Each
party agrees to abide by and comply with (i) the privacy standards and
requirements of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (“GLB Act”), (ii) the privacy
standards and
A-4
requirements of any other applicable Federal or state law, and (iii) its
own internal privacy policies and procedures, each as may be amended from time
to time.
(b) Each
party agrees to refrain from the use or disclosure of nonpublic personal
information (as defined under the GLB Act) of all customers who have
opted out
of such disclosures except as necessary to service the customers or as otherwise
necessary or required by applicable law; and
(c) Each
party shall be responsible for determining which customers have opted out of the
disclosure of nonpublic personal information by periodically reviewing and, if
necessary, retrieving a list of such customers (the “List”) as provided by each
to identify customers that have exercised their opt-out rights. In the event
either party uses or discloses nonpublic personal information of any customer
for purposes other than servicing the customer, or as otherwise required by
applicable law, that party will consult the List to determine whether the
affected customer has exercised his or her opt-out rights. Each party
understands that each is prohibited from using or disclosing any nonpublic
personal information of any customer that is identified on the List as having
opted out of such disclosures.
XIII.
Notice
All
notices will be in writing and will be duly given to the Dealer Manager when
mailed to 00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, and to
Dealer when mailed to the address specified by Dealer herein.
XIV.
Attorneys’
Fees, Applicable Law and Venue
In any
action to enforce the provisions of this Agreement or to secure damages for its
breach, the prevailing party shall recover its costs and reasonable attorney’s
fees. This Agreement shall be construed under the laws of the State of Texas and
shall take effect when signed by Dealer and countersigned by the Dealer Manager.
Venue for any action (including arbitration) brought hereunder shall lie
exclusively in Dallas, Texas.
[SIGNATURES
ON FOLLOWING PAGES]
A-5
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on
its behalf by its duly authorized agent.
|
THE
DEALER MANAGER:
BEHRINGER
SECURITIES LP
By: HARVARD
PROPERTY TRUST, LLC
General Partner
By:
__________________________________
Xxxxxx X. Xxxxxxx III,
Executive Vice President |
A-6
We have
read the foregoing Agreement and we hereby accept and agree to the terms and
conditions therein set forth. We hereby represent that the list below of
jurisdictions in which we are registered or licensed as a broker or dealer and
are fully authorized to sell securities is true and correct, and we agree to
advise you of any change in such list during the term of this Agreement.
1.
Identity of Dealer:
Name:
Type of
entity:
(corporation,
partnership, proprietorship, etc.)
Organized
in the State
of:
Licensed
as broker-dealer in the following
States:
Tax I.D.
#:
2. Person
to receive notice pursuant to Section XIII:
Name:
Company:
Address:
City,
State and Zip
Code:
Telephone No.:
Facsimile
No.:
AGREED
TO AND ACCEPTED BY THE DEALER:
(Dealer’s
Firm Name)
By:
Signature
Name:
Title:
A-7
EXHIBIT
B
SELECTED
INVESTMENT ADVISOR AGREEMENT
BEHRINGER
HARVARD OPPORTUNITY REIT I, INC.
THIS
SELECTED INVESTMENT ADVISOR AGREEMENT (the “Agreement”) is made and entered into
as of the day indicated on Exhibit A attached hereto and by this reference
incorporated herein, between Behringer Harvard Opportunity REIT I, Inc., a
Maryland corporation (the “Company”), and the selected investment advisor (the
“Investment Advisor”) identified in Exhibit A hereto.
WHEREAS,
the Company is offering up to 48,000,000 shares of its common stock (the
“Shares”) to the general public, pursuant to a public offering (the “Offering”)
of the Shares pursuant to a prospectus (the “Prospectus”) filed with the
Securities and Exchange Commission (the “SEC”), 8,000,000 of which Shares are
being offered pursuant to the Company’s distribution reinvestment plan (the
“DRIP”); and
WHEREAS,
the Investment Advisor is an entity, as designated in Exhibit A hereto,
organized and presently in good standing in the state or states designated in
Exhibit A hereto, presently registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and presently registered or
licensed as an investment advisor by the appropriate regulatory agency of each
state in which the Investment Advisor has clients, or exempt from such
registration requirements; and
WHEREAS,
the Company has a currently effective registration statement on Form S-11,
including a final prospectus, for the registration of the Shares under the
Securities Act of 1933, as amended (such registration statement, as it may be
amended, and the prospectus and exhibits on file with the SEC, as well as any
post-effective amendments or supplements to such registration statement or
prospectus after the effective date of registration, being herein respectively
referred to as the “Registration Statement” and the “Prospectus”); and
WHEREAS,
the offer and sale of the Shares shall be made pursuant to the terms and
conditions of the Registration Statement and the Prospectus and, further,
pursuant to the terms and conditions of all applicable federal securities laws
and the applicable securities laws of all states in which the Shares are offered
and sold; and
WHEREAS,
the Company desires to give the clients of the Investment Advisor the
opportunity to purchase the Shares, and the Investment Advisor is willing and
desires to provide its clients with information concerning the Shares and the
procedures for subscribing for the Shares upon the following terms and
conditions;
NOW,
THEREFORE, in consideration of the premises and terms and conditions thereof, it
is agreed between the Company and the Investment Advisor as follows.
1. Purchase
of Shares.
|
(a) |
Subject
to the terms and conditions herein set forth, the Company hereby makes
available for purchase by the clients of the Investment Advisor a portion
of the Shares described in the Registration Statement. The Investment
Advisor hereby covenants, warrants and agrees that, in regard to any
purchase of the Shares by its clients, it will comply with all of the
terms and conditions of the Registration Statement and the Prospectus, all
applicable state and federal laws, including the Securities Act of 1933,
as amended, the Investment Advisers Act of 1940, as amended, and any and
all regulations and rules pertaining thereto, heretofore or hereafter
issued by the SEC. |
B-1
Neither
the Investment Advisor nor any other person shall have any authority to give any
information or make any representations in connection with the Shares other than
as contained in the Registration Statement and Prospectus, as amended and
supplemented, and as is otherwise expressly authorized in writing by the
Company.
|
(b) |
Clients
of the Investment Advisor may, following receipt of written notice by the
Investment Advisor from the Company of the effective date of the
Registration Statement, purchase the Shares according to all such terms as
are contained in the Registration Statement and the Prospectus. The
Investment Advisor shall comply with all requirements set forth in the
Registration Statement and the Prospectus. The Investment Advisor shall
use and distribute, in connection with the Shares, only the Prospectus
and, if necessary, any separate prospectus relating solely to the DRIP,
and such sales literature and advertising materials that shall conform in
all respects to any restrictions of local law and the applicable
requirements of the Securities Act of 1933, as amended, and that has been
approved in writing by the Company. The Company reserves the right to
establish such additional procedures as it may deem necessary to ensure
compliance with the requirements of the Registration Statement, and the
Investment Advisor shall comply with all such additional procedures to the
extent that it has received written notice thereof.
|
|
(c) |
Until
such time as the Company has received and accepted subscription for at
least 200,000 shares and released the proceeds from such subscription from
escrow (or such greater amount as may be applicable in respect of any
greater escrow in respect of subscribers from any state), all monies
received for purchase of any of the Shares shall be forwarded by the
Investment Advisor to The Bank of New York (the “Escrow Agent”), where
such monies will be deposited in an escrow account established by the
Company solely for such subscriptions. The Investment Advisor shall return
any check not made payable “The Bank of New York, as escrow agent for
Behringer Harvard Opportunity REIT I, Inc.” directly to the subscriber who
submitted the check. After the Company has received and accepted
subscription for at least 200,000 shares and released the proceeds from
such subscription from escrow (or such greater amount as may be applicable
in respect of any greater escrow in respect of subscribers from any
state), Behringer Securities LP, in its discretion, may designate
alternative payment instructions and an alternative location where monies
received for purchase of any of the Shares shall be forwarded by the
Investment Advisor. Subscriptions will be executed as described in the
Registration Statement or as directed by the Company. Each Investment
Advisor receiving a subscriber’s check will deliver such check to The Bank
of New York or Behringer Securities LP, as applicable, no later than the
close of business of the first business day after receipt of the
subscription documents by the Investment
Advisor. |
|
(d) |
During
the full term of this Agreement, the Company shall have full authority to
take such action as it may deem advisable in respect to all matters
pertaining to the performance of the Investment Advisor under this
Agreement. |
|
(e) |
The
Shares may be purchased by clients of the Investment Advisor only where
the Shares may be legally offered and sold, only by such persons in such
states who shall be legally qualified to purchase the Shares, and only by
such persons in such states in which the Investment Advisor is registered
as an investment advisor or exempt from any applicable registration
requirements. |
|
(f) |
The
Investment Advisor shall have no obligation under this Agreement to advise
its clients to purchase any of the Shares. |
B-2
|
(g) |
The
Investment Advisor will use every reasonable effort to assure that Shares
are purchased only by investors who: |
|
(1) |
meet
the investor suitability standards, including the minimum income and net
worth standards established by the Company and set forth in the
Prospectus, and minimum purchase requirements set forth in the
Registration Statement; |
|
(2) |
can
reasonably benefit from an investment in the Company based on each
prospective investor’s overall investment objectives and portfolio
structure; |
|
(3) |
are
able to bear the economic risk of the investment based on each prospective
investor’s overall financial situation; and
|
|
(4) |
have
apparent understanding of: (a) the features of an investment in the
Shares; (b) fundamental risks of the investment; (c) the risk
that the prospective investor may lose the entire investment; (d) the lack
of liquidity of the Shares; (e) the restrictions on transferability of the
Shares; (f) the background and qualifications of the employees and agents
of Behringer Harvard Opportunity Advisors I LP, the advisor to the
Company; and (g) the tax consequences of an investment in the Shares.
|
|
(5) |
The
Investment Advisor will make the determinations required to be made by it
pursuant to subparagraph (g) based on information it has obtained from
each prospective investor, including, at a minimum, but not limited to,
the prospective investor’s age, investment objectives, investment
experience, income, net worth, financial situation and other investments
of the prospective investor, as well as any other pertinent factors deemed
by the Investment Advisor to be relevant. |
|
(h) |
In
addition to complying with the provisions of subparagraph (g) above, and
not in limitation of any other obligations of the Investment Advisor to
determine suitability imposed by state or federal law, the Investment
Advisor agrees that it will comply fully with the following provisions:
|
|
(1) |
The
Investment Advisor shall have reasonable grounds to believe, based upon
information provided by the investor concerning his or her investment
objectives, other investments, financial situation and needs, and upon any
other information known by the Investment Advisor, that (A) each client of
the Investment Advisor that purchases Shares is or will be in a financial
position appropriate to enable him or her to realize to a significant
extent the benefits (including tax benefits) of an investment in the
Shares, (B) each client of the Investment Advisor that purchases Shares
has a fair market net worth sufficient to sustain the risks inherent in an
investment in the Shares (including potential loss and lack of liquidity),
and (C) the Shares otherwise are or will be a suitable investment for each
client of the Investment Advisor that purchases Shares, and the Investment
Advisor shall maintain files disclosing the basis upon which the
determination of suitability was made; |
|
(2) |
The
Investment Advisor shall not execute any transaction involving the
purchase of Shares in a discretionary account without prior written
approval of the transactions by the investor;
|
B-3
|
(3) |
The
Investment Advisor shall have reasonable grounds to believe, based upon
the information made available to it, that all material facts are
adequately and accurately disclosed in the Registration Statement and
provide a basis for evaluating the Shares; |
|
(4) |
In
making the determination set forth in subparagraph (3) above, the
Investment Advisor shall evaluate items of compensation, physical
properties, tax aspects, financial stability and experience of the
sponsor, conflicts of interest and risk factors, appraisals, as well as
any other information deemed pertinent by it;
|
|
(5) |
The
Investment Advisor shall inform each prospective investor of all pertinent
facts relating to the liquidity and marketability of the Shares.
|
|
(i) |
The
Investment Advisor agrees to retain in its files, for a period of at least
six years, information that will establish that each purchaser of Shares
falls within the permitted class of investors.
|
|
(j) |
The
Investment Advisor either (i) shall not purchase shares for its own
account or (ii) shall hold for investment any Shares purchased for its own
account. |
|
(k) |
The
Investment Advisor hereby confirms that it is familiar with Securities Act
Release No. 4968 and Rule 15c2-8 under the Securities Exchange Act of
1934, as amended, relating to the distribution of preliminary and final
prospectuses, and confirms that it has complied and will comply therewith.
|
|
(1) |
The
Investment Advisor shall deliver a copy of Section 260.141.11 of the
California Corporate Securities Law of 1968 to each client of the
Investment Advisor that purchases Shares and resides in California.
|
|
(m) |
A
sale of Shares shall be deemed to be completed only after the Company
receives a properly completed subscription agreement for Shares from the
Investment Advisor evidencing the fact that the investor had received a
final Prospectus at least five full business days prior to the completion
date, together with payment of the full purchase price of each purchased
Share from a buyer who satisfies each of the terms and conditions of the
Registration Statement and Prospectus, and only after such subscription
agreement has been accepted in writing by the Company.
|
|
(n) |
Clients
of an Investment Advisor who have been advised by such Investment Advisor
on an ongoing basis regarding investments other than in the Company, and
who are not being charged by such Investment Advisor, through the payment
of commissions or otherwise, direct transaction based fees in connection
with the purchase of the Shares, may reduce the amount of selling
commissions payable with respect to the purchase of their shares down to
zero. |
2. Compensation
to Investment Advisor.
The
Company shall pay no fees, commissions or other compensation to the Investment
Advisor.
3. Association
of the Company with Other Advisors and Dealers.
It is
expressly understood between the Company and the Investment Advisor that the
Company may cooperate with broker-dealers who are registered as broker-dealers
with the National Association of Securities Dealers, Inc. (the “NASD”) or with
other investment advisors registered under the Investment Advisers Act
of
B-4
1940, as
amended. Such broker-dealers and investment advisors may enter into agreements
with the Company on terms and conditions identical or similar to this Agreement
and shall receive such rates of commission or other fees as are agreed to
between the Company and the respective broker-dealers and investment advisors
and as are in accordance with the terms of the Registration Statement.
4. Conditions
of the Investment Advisor’s Obligations.
The
Investment Advisor’s obligations hereunder are subject, during the full term of
this Agreement and the Offering, to (a) the performance by the Company of its
obligations hereunder and compliance by the Company with the covenants set forth
in Section 7 hereof; and (b) the conditions that: (i) the Registration Statement
shall become and remain effective; and (ii) no stop order shall have been issued
suspending the effectiveness of the Offering.
5. Conditions
to the Company’s Obligations.
The
obligations of the Company hereunder are subject, during the full term of this
Agreement and the Offering, to the conditions that: (a) at the effective date of
the Registration Statement and thereafter during the term of this Agreement
while any Shares remain unsold, the Registration Statement shall remain in full
force and effect authorizing the offer and sale of the Shares; (b) no stop order
suspending the effectiveness of the Offering or other order restraining the
offer or sale of the Shares shall have been issued nor proceedings therefor
initiated or threatened by any state regulatory agency or the SEC; and (c) the
Investment Advisor shall have satisfactorily performed all of its obligations
hereunder and complied with the covenants set forth in Section 6 hereof.
6. Covenants
of the Investment Advisor.
The
Investment Advisor covenants, warrants and represents, during the full term of
this Agreement, that:
|
(a) |
The
Investment Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and registered or licensed as
an investment advisor by the appropriate regulatory agency of each state
in which the advisor has clients, or exempt from such registration
requirements. |
|
(b) |
Neither
the Investment Advisor nor any person associated with the Investment
Advisor is registered as a broker-dealer or registered representative with
the NASD. |
|
(c) |
The
Investment Advisor shall comply with all applicable federal and state
securities laws, including, without limitation, the disclosure
requirements of the Investment Advisers Act of 1940, as amended, and the
provisions thereof requiring disclosure of the existence of this Agreement
and the compensation to be paid to the Investment Advisor hereunder.
|
|
(d) |
The
Investment Advisor shall maintain the records required by Section 204 of
the Investment Advisers Act of 1940, as amended, and Rule 204-2 thereunder
in the form and for the periods required thereby.
|
7. Covenants
of the Company.
The
Company covenants, warrants and represents, during the full term of this
Agreement, that:
|
(a) |
It
shall use its best efforts to maintain the effectiveness of the
Registration Statement and to file such applications or amendments to the
Registration Statement as may be reasonably necessary for that purpose.
|
B-5
|
(b) |
It
shall promptly inform the Investment Advisor whenever and as soon as it
receives or learns of any order issued by the SEC, any state regulatory
agency or any other regulatory agency which suspends the effectiveness of
the Registration Statement or prevents the use of the Prospectus or which
otherwise prevents or suspends the offering or sale of the Shares, or
receives notice of any proceedings regarding any such order.
|
|
(c) |
It
shall use its best efforts to prevent the issuance of any order described
herein at subparagraph (b) hereof and to obtain the lifting of any such
order if issued. |
|
(d) |
It
shall give the Investment Advisor written notice when the Registration
Statement becomes effective and shall deliver to the Investment Advisor
such number of copies of the Prospectus, and any supplements and
amendments thereto, which are finally approved by the SEC, as the
Investment Advisor may reasonably request for sale of the Shares.
|
|
(e) |
It
shall promptly notify the Investment Advisor of any post-effective
amendments or supplements to the Registration Statement or Prospectus, and
shall furnish the Investment Advisor with copies of any revised Prospectus
and/or supplements and amendments to the Prospectus and/or any prospectus
relating solely to the DRIP. |
|
(f) |
It
shall keep the Investment Advisor fully informed of any material
development to which the Company is a party or which concerns the business
and condition of the Company. |
|
(g) |
It
shall use its best efforts to cause, at or prior to the time the
Registration Statement becomes effective, the qualification of the Shares
for offering and sale under the securities laws of such states as the
Company shall elect. |
8. Payment
of Costs and Expenses.
The
Investment Advisor shall pay all costs and expenses incident to the performance
of its obligations under this Agreement.
9. Indemnification.
|
(a) |
The
Investment Advisor agrees to indemnify, defend and hold harmless the
Company, its affiliates and their or its officers, directors, trustees,
employees and agents, against all losses, claims, demands, liabilities and
expenses, joint or several, including reasonable legal and other expenses
incurred in defending such claims or liabilities, whether or not resulting
in any liability to the Company, its affiliates and their or its officers,
directors, trustees, employees or agents, which they or any of them may
incur arising out of (i) the offer or sale (as such term is defined in the
Securities Act of 1933, as amended) by the Investment Advisor, or any
person acting on its behalf, of any Shares pursuant to this Agreement, if
such loss, claim, demand, liability, or expense arises out of or is based
upon an untrue statement or alleged untrue statement of a material fact,
or any omission or alleged omission of a material fact, other than a
statement, omission, or alleged omission by the Investment Advisor which
is also, as the case may be, contained in or omitted from the Prospectus
or the Registration Statement and which statement or omission was not
based on information supplied to the Company by such Investment Advisor;
(ii) the breach by the Investment Advisor, or any person acting on its
behalf, of any of the terms and conditions of this Agreement; or (iii) the
negligence, malpractice or malfeasance of the Investment Advisor. This
indemnity provision shall survive the termination of this Agreement.
|
B-6
|
(b) |
The
Company agrees to indemnify, defend and hold harmless the Investment
Advisor, its officers, directors, employees and agents, against all
losses, claims, demands, liabilities and expenses, including reasonable
legal and other expenses incurred in defending such claims or liabilities,
which they or any of them may incur, including, but not limited to,
alleged violations of the Securities Act of 1933, as amended, but only to
the extent that such losses, claims, demands, liabilities and expenses
shall arise out of or be based upon (i) any untrue statement of a material
fact contained in the Prospectus or the Registration Statement, as filed
and in effect with the SEC, or in any amendment or supplement thereto, or
in any application prepared or approved in writing by counsel to the
Company and filed with any state regulatory agency in order to register or
qualify the Shares under the securities laws thereof (the “Blue Sky
applications”), or (ii) any omission or alleged omission to state therein
a material fact required to be stated in the Prospectus or the
Registration Statement or the Blue Sky applications, or necessary to make
such statements, and any part thereof, not misleading; provided, further,
that any such untrue statement, omission or alleged omission is not based
on information included in any such document which was supplied to the
Company, or any officer of the Company by such Investment Advisor;
provided in each case that such claims or liabilities did not arise from
Investment Advisor’s own negligence, malpractice or malfeasance. This
indemnity provision shall survive the termination of this Agreement.
|
|
(c) |
No
indemnifying party shall be liable under the indemnity provisions
contained in subparagraphs (a) and (b) above unless the party to be
indemnified shall have notified such indemnifying party in writing
promptly after the summons or other first legal process giving information
of the nature of the claim served upon the party to be indemnified, but
failure to notify an indemnifying party of any such claim shall not
relieve it from any liabilities that it may have to the indemnified party
against whom action is brought other than on account of its indemnity
agreement contained in subparagraphs (a) and (b) above. In the case of any
such claim, if the party to be indemnified notified the indemnifying party
of the commencement thereof as aforesaid, the indemnifying party shall be
entitled to participate at its own expense in the defense of such claim.
If it so elects, in accordance with arrangements satisfactory to any other
indemnifying party or parties similarly notified, the indemnifying party
has the option to assume the entire defense of the claim, with counsel who
shall be satisfactory to such indemnified party and all other indemnified
parties who are defendants in such action; and after notice from the
indemnifying party of its election so to assume the defense thereof and
the retaining of such counsel by the indemnifying party, the indemnifying
party shall not be liable to such indemnified party under subparagraphs
(a) and (b) above for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof, other than
for the reasonable costs of investigation. |
10. Term of
Agreement.
This
Agreement shall become effective on the date on which this Agreement is executed
by the Company and the Investment Advisor. The Investment Advisor and the
Company may each prevent this Agreement from becoming effective, without
liability to the other, by written notice before the time this Agreement
otherwise would become effective. After this Agreement becomes effective, either
party may terminate it at any time for any reason by giving thirty (30) days’
written notice to the other party; provided, however, that this Agreement shall
in any event automatically terminate at the first occurrence of any of the
following events: (a) the Registration Statement for offer and sale of the
Shares shall cease to be effective; (b) the Offering shall be terminated;
or (c) the Investment Advisor’s license or registration to act as an investment
advisor shall be revoked or suspended by any federal, self-regulatory or state
agency and such revocation or suspension is not cured within ten (10) days from
the date of such occurrence. In any event, this Agreement shall be deemed
suspended during any period for which such license is revoked or suspended.
B-7
11. Notices.
All
notices and communications hereunder shall be in writing and shall be deemed to
have been given and delivered when deposited in the United States mail, postage
prepaid, registered or certified mail, to the applicable address set forth
below.
|
If
to the Company: |
Behringer
Harvard Opportunity REIT I, Inc. |
|
00000
Xxxxxx Xxxxxxx | |
|
Xxxxx
000 | |
|
Xxxxxxx,
Xxxxx 00000 | |
|
Attention:
Executive Vice President and Secretary |
|
If
sent to the Investment Advisor: |
to
the person whose name and address are identified in Exhibit A hereto.
|
12. Successors.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and shall not be assigned or transferred by the Investment Advisor by operation
of law or otherwise.
13. Miscellaneous.
|
(a) |
This
Agreement shall be construed in accordance with the applicable laws of the
State of Texas. |
|
(b) |
Nothing
in this Agreement shall constitute the Investment Advisor as in
association with or in partnership with the Company.
|
|
(c) |
This
Agreement, including Exhibit A hereto, embodies the entire understanding,
between the parties to the Agreement, and no variation, modification or
amendment to this Agreement shall be deemed valid or effective unless it
is in writing and signed by both parties hereto.
|
|
(d) |
If
any provision of this Agreement shall be deemed void, invalid or
ineffective for any reason, the remainder of the Agreement shall remain in
full force and effect. |
|
(e) |
This
Agreement may be executed in counterpart copies, each of which shall be
deemed an original but all of which together shall constitute one and the
same instrument comprising this Agreement. |
|
(f) |
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. |
|
(g) |
Venue
for any action (including arbitration) brought hereunder shall lie
exclusively in Dallas, Texas. |
[SIGNATURES
ON FOLLOWING PAGES]
B-8
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date and year
indicated on Exhibit A hereto.
|
SELECTED
INVESTMENT ADVISOR |
COMPANY |
|
(Name of Investment Advisor) By:
Print
Name:
Title:
|
BEHRINGER
HARVARD OPPORTUNITY REIT I, INC.
By:
Print
Name:
Title:
|
B-9
EXHIBIT
A
TO
SELECTED
INVESTMENT ADVISOR AGREEMENT
OF
BEHRINGER
HARVARD OPPORTUNITY REIT I, INC.
This
Exhibit A is attached to and made a part of that certain Selected Investment
Advisor Agreement, dated as of the ___ day of ____________________, 200_, by and
between Behringer Harvard Opportunity REIT I, Inc., (the “Company”) and
____________________________ (the “Advisor”).
1. Date of
Agreement: ____________________,
200__
2 Identity
of Advisor:
Name:
Type of
Entity:
State
Organized
in:
Qualified
to Do Business and in Good Standing
in:
Registered
as an Investment Advisor in the Following
States:
3. Name
and Address for Notice Purposes:
Name:
Title:
Company:
Address:
City,
State and Zip
Code:
Telephone
Number (including area
code):
4. Please
complete the following for our records:
(a) How many
registered investment advisors are with your firm? __________
(Please
enclose a current list.)
(b) Does your
firm publish a newsletter? o Yes o No
What
is/are the frequency of the
publication(s)? o Weekly o Monthly o Quarterly
o Bi-weekly o Bi-monthly o Other
(please
specify) _________________________
PLEASE
PLACE BEHRINGER HARVARD OPPORTUNITY REIT I, INC. ON YOUR MAILING LIST AND
PROVIDE A SAMPLE OF THE PUBLICATION IF AVAILABLE.
B-10
|
(c) |
Does
your firm have regular internal mailings, or bulk package mailings to its
registered investment advisors? o
Yes o
No |
PLEASE
PLACE BEHRINGER HARVARD OPPORTUNITY REIT I, INC. ON YOUR MAILING LIST AND
PROVIDE A SAMPLE OF THE PUBLICATION IF AVAILABLE.
|
(d) |
Does
your firm have a computerized electronic mail (E-Mail) system for your
registered investment advisors? o
Yes o
No |
If so,
please provide e-mail
address:
|
(e) |
Website
address:
|
Person
responsible:
B-11
