EXHIBIT 1.1
BEHRINGER HARVARD REIT I, INC.
Up to 84,000,000 Shares of Common Stock/$840,000,000
DEALER MANAGER AGREEMENT
______________, 2002
Behringer Securities LP
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Behringer Harvard REIT I, Inc., a Maryland corporation (the "Company"), is
registering for public sale a maximum of 84,000,000 shares of its common stock,
$0.0001 par value per share (the "Offering"), of which amount 3,520,000 shares
are to be sold upon exercise of soliciting dealer warrants to be issued to
broker-dealers participating in the Offering having a purchase price of $0.0008
per warrant and exercise price of $12.00 (the "Soliciting Dealer Warrants"),
with the balance of 84,000,000 shares (the "Shares" or the "Stock") to be issued
and sold for $10.00 per share with an aggregate purchase price of $840,000,000
(80,000,000 Shares to be offered to the public and 4,000,000 Shares to be
offered pursuant to the Company's dividend reinvestment plan). There shall be a
minimum purchase by any one person of 100 Shares (except as otherwise indicated
in the Prospectus 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 June 28, 2002. Copies of such registration
statement and each amendment thereto have been or will be delivered to the
Dealer Manager. (The registration statement and prospectus contained therein, as
finally amended and revised at the effective date of the
registration statement, are respectively hereinafter referred to as the
"Registration Statement" and the "Prospectus," except that if the Prospectus
first filed by the 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.
-2-
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 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 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-
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 84,000,000
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 it is a member of the NASD and that it and its
employees and representatives have all required licenses and registrations to
act under this Agreement. The Dealer Manager agrees to be bound by the terms of
the Escrow Agreement executed as of ____________, 2002 among ___________________
as escrow agent, the Dealer Manager and the Company, a copy of which is
enclosed.
3.2 Promptly after the effective date of the Registration Statement, the
Dealer Manager and the Dealers shall commence the offering of the 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 in the
amount of 7% of the gross proceeds of the Shares sold plus a dealer manager fee
in the amount of 2.5% of the gross proceeds of the Shares sold. Notwithstanding
the foregoing, no commissions, payments or amount whatsoever will be paid to the
Dealer Manager under this Section 3.3 unless or until 250,000 Shares have been
sold by the Dealer Manager and its Dealers (the "Minimum Offering"). Until the
Minimum Offering is obtained, investments will be held in escrow and, if the
Minimum Offering is not obtained, will be returned to the investors in
accordance with the Prospectus. The 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.
3.4 The Dealer Manager represents and warrants to the Company and each person
and firm that signs the Registration Statement that the information under the
caption "Plan of Distribution" in the Prospectus and all other information
furnished to the 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.
-4-
3.5 The Dealer Manager shall use and distribute in conjunction with the offer
and sale of any Shares only the Prospectus and such sales literature and
advertising as shall have been previously approved in writing by the Company.
3.6 The Dealer Manager shall cause Shares to be offered and sold only in those
jurisdictions specified in writing by the Company for whose account Shares are
then offered for sale, and such list of jurisdictions shall be updated by the
Company as additional states are added. The Company shall specify only such
jurisdictions in which the offering and sale of its Shares has been authorized
by appropriate state regulatory authorities. No Shares shall be offered or sold
for the account of the Company in any other states.
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
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
-5-
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.
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 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 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
-6-
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 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 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
-7-
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. 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
-8-
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 Dealer comply with
-9-
the provisions of all 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.
12. Submission of Orders
12.1 Those persons who purchase Shares will be instructed by the Dealer Manager
or the Dealer to make their checks payable to an escrow agent for the Company.
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 subscriber's
checks and issue a check for the aggregate amount of the subscription proceeds
made payable to the order of the escrow agent.
12.2 Where, pursuant to a Dealer's internal supervisory procedures, internal
supervisory review is conducted at the same location at which subscription
documents and checks are received from subscribers, checks will be transmitted
in care of the Dealer Manager by the end of the next business day following
receipt by the Dealer for deposit to the escrow agent.
12.3 Where, pursuant to a Dealer's internal supervisory procedures, final
internal supervisory review is conducted at a different location, checks will be
transmitted by the end of the next business day following receipt by the Dealer
to the office of the Dealer conducting such final internal supervisory review
(the "Final Review Office"). The Final Review Office will in turn by the end of
the next business day following receipt by the Final Review Office, transmit
such checks in care of the Dealer Manager for deposit to the escrow agent.
12.4 Where the Dealer Manager is involved in the distribution process, checks
will be transmitted by the Dealer Manager for deposit to the escrow agent as
soon as practicable, but in any event by the end of the second business day
following receipt by the Dealer Manager. Checks of rejected subscribers will be
promptly returned to such subscribers.
13. 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:
-10-
If to the Company: Behringer Harvard REIT I, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chairman of the Board
If to the Dealer Manager: Behringer Securities LP
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
Any party may change its address specified above by giving the other party
notice of such change in accordance with this Section 13.
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 REIT I, INC.
By:
--------------------------------------
Xxxxxx X. Xxxxxxxxx, 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, Chief Operating Officer
-11-
EXHIBIT A
BEHRINGER HARVARD REIT I, INC.
Up to 84,000,000 Shares of Common Stock/$840,000,000
SELECTED DEALER AGREEMENT
Ladies and Gentlemen:
Behringer Securities LP, as the dealer manager ("Dealer Manager") for Behringer
Harvard 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 _____________, 2002, 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
Those persons who purchase Shares will be instructed by the Dealer to make their
checks payable to an escrow agent for the Company. Any Dealer receiving a check
not conforming to
-12-
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 and issue a check made payable to the order of the
escrow agent for the aggregate amount of the subscription proceeds. Transmittal
of received investor funds will be made in accordance with the following
procedures:
Where, pursuant to a Dealer's internal supervisory procedures, internal
supervisory review is conducted at the same location at which subscription
documents and checks are received from subscribers, checks will be transmitted
in care of the Dealer Manager by the end of the next business day following
receipt by the Dealer for deposit to the escrow agent.
Where, pursuant to a Dealer's internal supervisory procedures, final internal
supervisory review is conducted at a different location, checks will be
transmitted by the end of the next business day following receipt by the Dealer
to the office of the Dealer conducting such final internal supervisory review
(the "Final Review Office"). The Final Review Office will in turn by the end of
the next business day following receipt by the Final Review Office, transmit
such checks in care of the Dealer Manager for deposit to the escrow agent.
III. Pricing
Shares shall be offered to the public at the offering price of $10.00 per Share
payable in cash. 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 100 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 7% of the gross proceeds of Shares sold by it
and accepted and confirmed by the Company, 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 of up to 1.5% of
-13-
the gross proceeds of Shares sold by Dealers participating in the offering of
Shares, 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.
Dealer acknowledges and agrees that no commissions, payments or amount
whatsoever will be paid to the Dealer unless or until 250,000 Shares have been
sold (the "Minimum Offering"). Until the Minimum Offering is obtained,
investments will be held in escrow and, if the Minimum Offering is not obtained,
will be returned to the investors in accordance with the Prospectus.
The parties hereby agree that the foregoing commission is not in excess of the
usual and customary distributors' or sellers' commission received in the sale of
securities similar to the 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
-14-
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 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 Rules 2730, 2740 and 2750 of the NASD Conduct
Rules.
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 reasonably
expected to detect and cause the reporting of suspicious transactions in
connection with the sale of Shares of the Company.
-15-
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 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
-16-
customer has exercised his or her opt-out rights. Each party understands that
each is prohibited from using or disclosing any nonpublic personal information
of any customer that is identified on the List as having opted out of such
disclosures.
XIII. Notice
All notices will be in writing and will be duly given to the Dealer Manager when
mailed to 0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, and to
Dealer when mailed to the address specified by Dealer herein.
XIV. Attorneys' Fees, Applicable Law and Venue
In any action to enforce the provisions of this Agreement or to secure damages
for its breach, the prevailing party shall recover its costs and reasonable
attorney's fees. This Agreement shall be construed under the laws of the State
of Texas and shall take effect when signed by Dealer and countersigned by the
Dealer Manager. Venue for any action (including arbitration) brought hereunder
shall lie exclusively in Dallas, Texas.
[SIGNATURES ON FOLLOWING PAGES]
-17-
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,
Chief Operating Officer
-18-
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 XI:
Name:
--------------------------------------------------------------------------
Company:
-----------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
City, State and Zip Code:
------------------------------------------------------
Telephone No.:
-----------------------------------------------------------------
Facsimile No.:
-----------------------------------------------------------------
-19-
AGREED TO AND ACCEPTED BY THE DEALER:
--------------------------------------------------------------------------------
(Dealer's Firm Name)
By:
----------------------------------------------------------------------------
Signature
Name:
--------------------------------------------------------------------------
Title:
-------------------------------------------------------------------------
-20-
