EXHIBIT 1.1
BEHRINGER HARVARD OPPORTUNITY REIT I, INC.
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
-2-
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/Nebraska Required Capital (as applicable and as defined
in the Escrow Agreement) is
-3-
obtained, investments will be held in escrow and, if the Required
Capital or the Pennsylvania/Nebraska 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
-4-
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
-5-
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
-6-
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.
-7-
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.
-8-
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: Behringer Harvard Opportunity REIT I, Inc.
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,
BEHRINGER HARVARD OPPORTUNITY REIT I, INC.
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
BEHRINGER HARVARD OPPORTUNITY REIT I, INC.
Up to 44,000,000 Shares of Common Stock/$476,000,000
SELECTED DEALER AGREEMENT
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/Nebraska
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/Nebraska 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. Notwithstanding the
termination of this Agreement or the payment of any amount to Dealer, Dealer
agrees to pay Dealer's proportionate share of any claim, demand or liability
asserted against Dealer and the other Dealers on the basis that Dealers or any
of them constitute an association, unincorporated business or other separate
entity, including in each case Dealer's proportionate share of any expenses
incurred in defending against any such claim, demand or liability.
VIII. License and Association Membership
Dealer's acceptance of this Agreement constitutes a representation to
the 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.
A-4
XII. Privacy Laws
The Dealer Manager and Dealer (each referred to individually in this
section as "party") agree as follows:
(a) Each party agrees to abide by and comply with (i) the
privacy standards and requirements of the Xxxxx-Xxxxx-Xxxxxx Act of 1999
("GLB Act"), (ii) the privacy standards and requirements of any other
applicable Federal or state law, and (iii) its own internal privacy
policies and procedures, each as may be amended from time to time.
(b) Each party agrees to refrain from the use or disclosure
of nonpublic personal information (as defined under the GLB Act) of all
customers who have opted out of such disclosures except as necessary to
service the customers or as otherwise necessary or required by
applicable law; and
(c) Each party shall be responsible for determining which
customers have opted out of the disclosure of nonpublic personal
information by periodically reviewing and, if necessary, retrieving a
list of such customers (the "List") as provided by each to identify
customers that have exercised their opt-out rights. In the event either
party uses or discloses nonpublic personal information of any customer
for purposes other than servicing the customer, or as otherwise required
by applicable law, that party will consult the List to determine whether
the affected customer has exercised his or her opt-out rights. Each
party understands that each is prohibited from using or disclosing any
nonpublic personal information of any customer that is identified on the
List as having opted out of such disclosures.
XIII. Notice
All notices will be in writing and will be duly given to the Dealer
Manager when mailed to 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
B-7
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.
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
__________________________________ BEHRINGER HARVARD OPPORTUNITY
(Name of Investment Advisor) REIT I, INC.
By:_______________________________ By: _________________________________
Print Name:____________________ Print Name: _____________________
Title:_________________________ 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? [ ] Yes [ ] No
What is/are the frequency of the publication(s)?
[ ]Weekly [ ] Monthly [ ] Quarterly
[ ] Bi-weekly [ ] Bi-monthly [ ] Other (please specify)_________
PLEASE PLACE BEHRINGER HARVARD 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?
[ ]Yes [ ] 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?
[ ] Yes [ ] No
If so, please provide e-mail address:___________________
(e) Website address:________________________________________
Person responsible: ________________________________
B-11
