EXHIBIT 10.4
FORM OF
ESCROW AGREEMENT
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attn: Insurance Trust and Escrow Unit
Re: BEHRINGER HARVARD OPPORTUNITY REIT I, INC.
Ladies and Gentlemen:
BEHRINGER HARVARD OPPORTUNITY REIT I, INC., a Maryland corporation (the
"Company"), will issue in a public offering (the "Offering") shares of its
common stock (the "Stock") pursuant to a Registration Statement on Form S-11
filed by the Company with the Securities and Exchange Commission. Behringer
Securities LP, a Texas limited partnership (the "Dealer Manager"), will act as
dealer manager for the offering of the Stock. The Company is entering into this
agreement to set forth the terms on which The Bank of New York (the "Escrow
Agent"), will hold and disburse the proceeds from subscriptions for the purchase
of the Stock in the Offering until such time as: (i) in the case of
subscriptions received from all nonaffiliates of the Company, the Company has
received and accepted subscriptions for Stock resulting in a total of 200,000
shares of common stock sold in the offering (the "Required Capital"); and (ii)
in the case of subscriptions received from residents of Pennsylvania
("Pennsylvania Subscribers"), the Company has received subscriptions for Stock
from nonaffiliates of the Company resulting in total minimum capital raised of
$23,800,000 (the "Pennsylvania Required Capital"); and (iii) in the case of
subscriptions received from residents of New York ("New York Subscribers"), the
Company has received subscriptions for Stock from nonaffiliates of the Company
resulting in total minimum capital raised of $2,500,000 (the "New York Required
Capital").
The Company hereby appoints The Bank of New York as Escrow Agent for
purposes of holding the proceeds from the subscriptions for the Stock, on the
terms and conditions hereinafter set forth:
1. Until such time as the Company has received subscriptions for
Stock resulting in total minimum capital raised equal to the Required Capital
and such funds are disbursed from the Escrow Account in accordance with
paragraph 3(a) hereof, persons subscribing to purchase the Stock (the
"Subscribers") will be instructed by the Dealer Manager or any soliciting
dealers to remit the purchase price in the form of checks, drafts, wires,
Automated Clearing House (ACH) or money orders (HEREINAFTER "instruments of
payment") payable to the order of "The Bank of New York, as Escrow Agent for
Behringer Harvard Opportunity REIT I, Inc." Until such time as the Company has
received subscriptions for Stock resulting in total minimum capital raised equal
to the Required Capital and such funds are disbursed from the Escrow Account in
accordance with paragraph 3(a) hereof, any checks, drafts or money orders
received made payable to a party other than the Escrow Agent shall be returned
to the soliciting dealer who submitted the check, draft or money order. Within
one (1) business day after receipt of instruments of payment from the Offering,
the Dealer Manager will (a) send to the Escrow Agent: each Subscriber's name,
address, executed IRS Form W-9, number of shares purchased, and purchase price
remitted, and (b) deposit the instruments of payment from such Subscriber (the
"Subscription Materials"), into an interest-bearing deposit account entitled
"ESCROW ACCOUNT FOR THE BENEFIT OF SUBSCRIBERS FOR COMMON STOCK OF BEHRINGER
HARVARD OPPORTUNITY REIT I, INC." or such similar designation as the parties may
agree (the "Escrow Account"), until such Escrow Account has closed pursuant to
paragraph 3(a) hereof. Instruments of payment received from Pennsylvania
Subscribers (as identified as such by the Company) shall be accounted for
separately in a subaccount entitled "ESCROW ACCOUNT FOR THE BENEFIT OF
PENNSYLVANIA
SUBSCRIBERS" (the "Pennsylvania Escrow Account"), until such Pennsylvania Escrow
Account has closed pursuant to paragraph 3(a) hereof. Instruments of payment
received from New York Subscribers (as identified as such by the Company) shall
be accounted for separately in a subaccount entitled "ESCROW ACCOUNT FOR THE
BENEFIT OF NEW YORK SUBSCRIBERS" (the "New York Escrow Account"), until such New
York Escrow Account has closed pursuant to paragraph 3(a) hereof. Each of the
Escrow Account, the Pennsylvania Escrow Account, and New York Escrow Account
will be established and maintained in such a way as to permit the interest
income calculations described in paragraph 7.
2. The Escrow Agent agrees to promptly process for collection the
instruments of payment upon deposit into the Escrow Account, Pennsylvania Escrow
Account, or New York Escrow Account, as applicable. Deposits shall be held in
the Escrow Account, the Pennsylvania Escrow Account, and the New York Escrow
Account until such funds are disbursed in accordance with paragraph 3(a) hereof.
Prior to disbursement of the funds deposited in the Escrow Account, the
Pennsylvania Escrow Account, or the New York Escrow Account, such funds shall
not be subject to claims by creditors of the Company or the Dealer Manager or
any of their affiliates. If any of the instruments of payment are returned to
the Escrow Agent for nonpayment prior to receipt of the Required Capital or, in
connection with subscriptions from Pennsylvania Subscribers, the Pennsylvania
Required Capital or, in connection with subscriptions from New York Subscribers,
the New York Required Capital, the Escrow Agent shall promptly notify the Dealer
Manager and the Company in writing via mail or facsimile of such nonpayment, and
is authorized to debit the Escrow Account, the Pennsylvania Escrow Account, or
the New York Escrow Account, as applicable, in the amount of such returned
payment as well as any interest earned on the amount of such payment.
3. (a) Subject to the provisions of subparagraphs 3(b)-3(f)
below:
(i) once the aggregate of all collected funds in the
Escrow Account is an amount equal to or greater than the
Required Capital, the Escrow Agent shall promptly notify the
Company and, upon receiving written instruction from the
Company, (A) disburse to the Company, by check, ACH or wire
transfer, the funds in the Escrow Account representing the gross
purchase price for the Stock, and (B) disburse to the
Subscribers or the Company, as applicable, any interest thereon
pursuant to the provisions of subparagraph 3(f). For purposes of
this Agreement, the term "collected funds" shall mean all funds
received by the Escrow Agent that have cleared normal banking
channels and are in the form of cash or a cash equivalent. After
such time the Escrow Account shall remain open and the Company
shall continue to cause subscriptions for the Stock that are not
to be deposited in the Pennsylvania Escrow Account or the New
York Escrow Account to be deposited therein until the Company
informs the Escrow Agent in writing to close the Escrow Account,
and thereafter any subscription documents and instruments of
payment received by the Escrow Agent from Subscribers other than
Pennsylvania Subscribers and New York Subscribers shall be
forwarded directly to the Company.
(ii) regardless of any closing of the Escrow Account,
the Company and the Dealer Manager shall continue to forward
instruments of payment and Subscription Materials received from
New York Subscribers for deposit into the New York Escrow
Account to the Escrow Agent until such time as the Company
notifies the Escrow Agent in writing that total subscription
proceeds (including the amount then in the New York Escrow
Account, but excluding the amount then in the Pennsylvania
Escrow Account) equal or exceed the New York Required Capital.
Upon receipt of a written notice from the Company that total
subscription proceeds (including the amount then in the New York
Escrow Account, but excluding the amount then in the
Pennsylvania Escrow Account) equaling or exceeding the New York
Required Capital have been received in
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collected funds, the Escrow Agent shall (A) disburse to the
Company, by check, ACH or wire transfer, the funds then in the
New York Escrow Account representing the gross purchase price
for the Stock, and (B) disburse to the New York Subscribers or
the Company, as applicable, any interest thereon pursuant to the
provisions of subparagraph 3(f). Following such disbursements,
the Escrow Agent shall close the New York Escrow Account, and
thereafter any Subscription Materials and instruments of payment
received by the Escrow Agent from New York Subscribers shall be
deposited directly to the Escrow Account (or to the Company, if
it has closed the Escrow Account, as instructed in writing by
the Company).
(iii) regardless of any closing of the Escrow Account
or the New York Escrow Account, the Company and the Dealer
Manager shall continue to forward instruments of payment and
Subscription Materials received from Pennsylvania Subscribers
for deposit into the Pennsylvania Escrow Account to the Escrow
Agent until such time as the Company notifies the Escrow Agent
in writing that total subscription proceeds (including the
amount then in the Pennsylvania Escrow Account) equal or exceed
the Pennsylvania Required Capital. Within five days, the Escrow
Agent shall (A) disburse to the Company, by check, ACH or wire
transfer, the funds then in the Pennsylvania Escrow Account
representing the gross purchase price for the Stock, and (B)
disburse to the Pennsylvania Subscribers or the Company, as
applicable, any interest thereon pursuant to the provisions of
subparagraph 3(f). Following such disbursements, the Escrow
Agent shall close the Pennsylvania Escrow Account, and
thereafter any Subscription Materials and instruments of payment
received by the Escrow Agent from Pennsylvania Subscribers shall
be deposited directly to the Escrow Account (or to the Company,
if it has closed the Escrow Account, as instructed in writing by
the Company).
(b) Within four business days of the close of business on
the date that is two years following commencement of the Offering (the
"Expiration Date"), the Escrow Agent shall promptly notify the Company
if it is not in receipt of evidence of Subscription Materials accepted
on or before the Expiration Date, and instruments of payment dated not
later than that the Expiration Date, for the purchase of Stock providing
for total purchase proceeds that equal or exceed the Required Capital
(from all sources but exclusive of any funds received from subscriptions
for Stock from entities which the Company has notified the Escrow Agent
are affiliated with the Company). In the event the Escrow Agent is not
in possession of an executed IRS Form W-9 from any Subscriber, the
Company shall provide the Escrow Agent an executed IRS Form W-9 from
such Subscriber within ten (10) calendar days after such notice. On the
tenth (10th) day following the date of such notice, the Escrow Agent
shall promptly return directly to each Subscriber the collected funds
deposited in the Escrow Account, the Pennsylvania Escrow Account and the
New York Escrow Account on behalf of such Subscriber (unless earlier
disbursed in accordance with paragraph 3(c)), or shall return the
instruments of payment delivered, but not yet processed for collection
prior to such time, together with interest in the amounts calculated
pursuant to paragraph 7 for each Subscriber at the address provided by
the Dealer Manager or the Company. In the event an executed IRS Form W-9
is not received for each Subscriber within ten (10) calendar days, the
Escrow Agent shall thereupon remit an amount to the Subscribers in
accordance with the provisions hereof, withholding twenty-eight percent
(28%), or otherwise in accordance with IRS regulations then in effect,
of any interest income on subscription proceeds (determined in
accordance with paragraph 7) attributable to those Subscribers for whom
the Escrow Agent does not possess an executed IRS Form W-9. However, the
Escrow Agent shall not be required to remit any payments until funds
represented by such payments have been collected.
(c) Notwithstanding subparagraphs 3(a) and 3(b) above, if
the Escrow Agent is not in receipt of evidence of subscriptions accepted
on or before the close of business on such date
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that is 120 days after commencement of the Offering (the Company will
notify the Escrow Agent of the commencement date of the Offering) (the
"Initial Escrow Period"), and instruments of payment dated not later
than that date, for the purchase of Stock providing for total purchase
proceeds from all nonaffiliated sources that equal or exceed the
Pennsylvania Required Capital, the Escrow Agent shall promptly notify
the Company. Thereafter, the Company shall send to each Pennsylvania
Subscriber by certified mail within ten (10) calendar days after the end
of the Initial Escrow period a notification in the form of Exhibit A.
If, pursuant to such notification, a Pennsylvania Subscriber requests
the return of his or her subscription funds within ten (10) calendar
days after receipt of the notification (the "Request Period") and the
Escrow Agent is not in possession of an executed IRS form W-9, the
Company shall provide the Escrow Agent with an executed IRS Form W-9
from each such Pennsylvania Subscriber within ten (10) calendar days
after receiving notice from such Pennsylvania Subscriber. The Escrow
Agent shall promptly refund directly to each Pennsylvania Subscriber the
collected funds deposited in the Pennsylvania Escrow Account on behalf
of such Pennsylvania Subscriber, or shall return the instruments of
payment delivered, but not yet processed for collection prior to such
time, to the address provided by the Dealer Manager or the Company,
together with interest income in the amounts calculated pursuant to
paragraph 7. If an executed IRS Form W-9 is not received for such
Pennsylvania Subscriber within ten (10) calendar days, the Escrow Agent
shall thereupon remit an amount to such Pennsylvania Subscriber in
accordance with the provisions hereof, withholding twenty-eight percent
(28%), or otherwise in accordance with IRS regulations then in effect,
of any interest income earned on subscription proceeds (determined in
accordance with paragraph 7) attributable to such Pennsylvania
Subscriber for whom the Escrow Agent does not possess an executed IRS
Form W-9. However, the Escrow Agent shall not be required to remit such
payments until funds represented by such payments have been collected by
the Escrow Agent.
(d) The subscription funds of Pennsylvania Subscribers who
do not request the return of their subscription funds within the Request
Period shall remain in the Pennsylvania Escrow Account for successive
120-day escrow periods (a "Successive Escrow Period"), each commencing
automatically upon the termination of the prior Successive Escrow
Period, and the Company and Escrow Agent shall follow the notification
and payment procedure set forth in subparagraph 3(c) above with respect
to the Initial Escrow Period for each Successive Escrow Period until the
occurrence of the earliest of (i) the Expiration Date, (ii) the receipt
and acceptance by the Company of subscriptions for the purchase of Stock
with total purchase proceeds that equal or exceed the Pennsylvania
Required Capital and the disbursement of the Pennsylvania Escrow Account
on the terms specified herein, or (iii) all funds held in the
Pennsylvania Escrow Account having been returned to the Pennsylvania
Subscribers in accordance with the provisions hereof.
(e) If the Company rejects any subscription for which the
Escrow Agent has collected funds, the Escrow Agent shall, upon the
written request of the Company, promptly issue a refund to the rejected
Subscriber. If the Company rejects any subscription for which the Escrow
Agent has not yet collected funds but has submitted the Subscriber's
check for collection, the Escrow Agent shall promptly return the funds
in the amount of the Subscriber's check to the rejected Subscriber after
such funds have been collected. If the Escrow Agent has not yet
submitted a rejected Subscriber's check for collection, the Escrow Agent
shall promptly remit the Subscriber's check directly to the Subscriber.
(f) At any time after funds are disbursed upon the Company's
acceptance of subscriptions pursuant to subparagraph 3(a) above on the
tenth (10th) day following the date of such acceptance, the Escrow Agent
shall promptly provide directly to each Subscriber the amount of the
interest payable to the Subscribers; provided that the Escrow Agent is
in possession of such Subscriber's executed IRS Form W-9. In the event
the Escrow Agent is not in possession of an executed IRS Form W-9 from
any Subscriber, the Company shall provide the Escrow Agent with
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an executed IRS Form W-9 from such Subscriber within ten (10) calendar
days after acceptance of such subscription. In the event an executed IRS
Form W-9 is not received for each Subscriber within such period, the
Escrow Agent shall remit an amount to the Subscribers in accordance with
the provisions hereof, withholding twenty-eight percent (28%), or
otherwise in accordance with IRS regulations then in effect, of any
interest income on subscription proceeds (determined in accordance with
paragraph 7) attributable to those Subscribers for whom the Escrow Agent
does not possess an executed IRS Form W-9. However, the Escrow Agent
shall not be required to remit any payments until funds represented by
such payments have been collected by the Escrow Agent. The forgoing
notwithstanding, interest, if any, earned on accepted subscription
proceeds will be payable to a Subscriber only if the Subscriber's funds
have been held in escrow by the Escrow Agent for at least 35 days;
interest, if any, earned on accepted subscription proceeds of
Subscribers' funds held less than 35 days will be payable to the
Company.
In the event that instruments of payment are returned for nonpayment,
the Escrow Agent is authorized to debit the Escrow Account, the Pennsylvania
Escrow Account, or the New York Escrow Account, as applicable, in accordance
with paragraph 2 hereof.
4. The Escrow Agent shall report to the Company weekly on the
account balances in each of the Escrow Account, the Pennsylvania Escrow Account,
and the New York Escrow Account, and the activity in such accounts since the
last report.
5. Prior to the disbursement of funds deposited in the Escrow
Account, the Pennsylvania Escrow Account, or the New York Escrow Account in
accordance with the provisions of paragraph 3 hereof, the Escrow Agent shall
invest all of the funds deposited as well as earnings and interest derived
therefrom in the Escrow Account, the Pennsylvania Escrow Account, or the New
York Escrow Account, as applicable, in the "Short-Term Investments" specified
below at the written request of the Company, unless the costs to the Company for
the making of such investment are reasonably expected to exceed the anticipated
interest earnings from such investment in which case the funds and interest
thereon shall remain in the respective escrow account until the balance in the
respective escrow account reaches the minimum amount necessary for the
anticipated interest earnings from such investment to exceed the costs to the
Company for the making of such investment, as determined by the Company based
upon applicable interest rates.
"Short-Term Investments" include obligations of, or obligations
guaranteed by, the United States government or bank money-market accounts or
certificates of deposit of national or state banks that have deposits insured by
the Federal Deposit Insurance Corporation (including certificates of deposit of
any bank acting as a depository or custodian for any such funds) which mature on
or before the Expiration Date, unless such instrument cannot be readily sold or
otherwise disposed of for cash by the Expiration Date without any dissipation of
the offering proceeds invested.
The following securities are not permissible investments:
(a) money market funds;
(b) corporate equity or debt securities;
(c) repurchase agreements;
(d) bankers' acceptances;
(e) commercial paper; and
(f) municipal securities.
It is hereby expressly agreed and stipulated by the parties hereto that
the Escrow Agent shall not be required to exercise any discretion hereunder and
shall have no investment or management responsibility and, accordingly, shall
have no duty to, or liability for its failure to, provide investment
recommendations or investment advice to the parties hereto. It is the intention
of the parties hereto that
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the Escrow Agent shall never be required to use, advance or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
or the exercise of any of its rights and powers hereunder.
6. The Escrow Agent is entitled to rely upon written instructions
received from the Company, unless the Escrow Agent has actual knowledge that
such instructions are not valid or genuine; provided that, if in the Escrow
Agent's opinion, any instructions from the Company are unclear, the Escrow Agent
may request clarification from the Company prior to taking any action. However,
the Escrow Agent shall not be required to disburse any funds attributable to
instruments of payment that have not been processed for collection, until such
funds are collected and then shall disburse such funds in compliance with the
disbursement instructions from the Company.
7. If the Offering terminates prior to receipt of the Required
Capital, or one or more Pennsylvania Subscribers elects to have his or her
subscription returned in accordance with paragraph 3, interest income earned on
subscription proceeds deposited in the Escrow Account (the "Escrow Income"), the
Pennsylvania Escrow Account (the "Pennsylvania Escrow Income"), and the New York
Escrow Account (the "New York Escrow Income"), as applicable, shall be remitted
to Subscribers, or to the Company if the applicable Subscriber's funds have been
held in escrow by the Escrow Agent for less than 35 days, in accordance with
paragraph 3 and without any deductions for escrow expenses. The Company shall
reimburse the Escrow Agent for all escrow expenses. The Escrow Agent shall remit
all such Escrow Income, Pennsylvania Escrow Income, and New York Escrow Income
in accordance with paragraph 3. If the Company chooses to leave the Escrow
Account open after receiving the Required Capital, then it shall make regular
acceptances of subscriptions therein, but no less frequently than monthly, and
the Escrow Income from the last such acceptance shall be calculated and remitted
to the Subscribers or the Company, as applicable, pursuant to the provisions of
paragraph 3(f).
8. The Escrow Agent shall receive compensation from the Company as
set forth in Exhibit B attached hereto.
9. The duties, responsibilities and obligations of Escrow Agent
shall be limited to those expressly set forth herein and no duties,
responsibilities or obligations shall be inferred or implied. Escrow Agent shall
not be subject to, nor required to comply with, any other agreement between or
among the Company or to which the Company is a party, even though reference
thereto may be made herein, or to comply with any direction or instruction
(other than those contained herein or delivered in accordance with this Escrow
Agreement) from the Company or the Dealer Manager. Escrow Agent shall not be
required to, and shall not, expend or risk any of its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder
10. If at any time Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects Escrow Property (including but
not limited to orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of escrow property), Escrow Agent
is authorized to comply therewith in any manner as it or its legal counsel of
its own choosing deems appropriate; and if Escrow Agent complies with any such
judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process, Escrow Agent shall not be liable to any of
the parties hereto or to any other person or entity even though such order,
judgment, decree, writ or process may be subsequently modified or vacated or
otherwise determined to have been without legal force or effect.
11. (a) Escrow Agent shall not be liable for any action taken or
omitted or for any loss or injury resulting from its actions or
its performance or lack of performance of its duties hereunder
in the absence of gross negligence or willful misconduct on its
part. In no event shall Escrow Agent be liable (i) for acting in
accordance with or relying upon any instruction, notice, demand,
certificate or document from the Company, (ii) for any
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consequential, punitive or special damages, (iii) for the acts
or omissions of its nominees, correspondents, designees,
subagents or subcustodians, or (iv) for an amount in excess of
the value of the collected funds in the Escrow Account, the New
York Escrow Account, and the Pennsylvania Escrow Account, valued
as of the date of deposit.
(b) If any fees, expenses or costs incurred by, or any
obligations owed to, Escrow Agent hereunder are not promptly
paid when due, Escrow Agent may reimburse itself therefor from
the collected funds in the Escrow Account, the New York Escrow
Account, and the Pennsylvania Escrow Account and may sell,
convey or otherwise dispose of any collected funds in the Escrow
Account, the New York Escrow Account, and the Pennsylvania
Escrow Account for such purpose.
(c) As security for the due and punctual performance of any
and all of the Company's obligations to Escrow Agent hereunder,
now or hereafter arising, the Company hereby pledges, assigns
and grants to Escrow Agent a continuing security interest in,
and a lien on, the collected funds in the Escrow Account, the
New York Escrow Account, and the Pennsylvania Escrow Account and
all distributions thereon or additions thereto (whether such
additions are the result of deposits by Subscribers or the
Company or the investment of collected funds). The security
interest of Escrow Agent shall at all times be valid, perfected
and enforceable by Escrow Agent against the Company and all
third parties in accordance with the terms of this Escrow
Agreement.
(d) Escrow Agent may consult with legal counsel at the
expense of the Company as to any matter relating to this Escrow
Agreement, and Escrow Agent shall not incur any liability in
acting in good faith in accordance with any advice from such
counsel.
(e) Escrow Agent shall not incur any liability for not
performing any act or fulfilling any duty, obligation or
responsibility hereunder by reason of any occurrence beyond the
control of Escrow Agent (including but not limited to any act or
provision of any present or future law or regulation or
governmental authority, any act of God or war, or the
unavailability of the Federal Reserve Bank wire or telex or
other wire or communication facility).
12. Unless otherwise specifically set forth herein, Escrow Agent
shall proceed as soon as practicable to collect any checks or other collection
items at any time deposited hereunder. All such collections shall be subject to
Escrow Agent's usual collection practices or terms regarding items received by
Escrow Agent for deposit or collection. Escrow Agent shall not be required, or
have any duty, to notify anyone of any payment or maturity under the terms of
any instrument deposited hereunder, nor to take any legal action to enforce
payment of any check, note or security deposited hereunder or to exercise any
right or privilege which may be afforded to the holder of any such security.
13. Escrow Agent shall not be responsible in any respect for the
form, execution, validity, value or genuineness of documents or securities
deposited hereunder, or for any description therein, or for the identity,
authority or rights of persons executing or delivering or purporting to execute
or deliver any such document, security or endorsement.
14. The Company shall be liable for and shall reimburse and
indemnify Escrow Agent and hold Escrow Agent harmless from and against any and
all claims, losses, liabilities, costs, damages or expenses (including
reasonable attorneys' fees and expenses) (collectively, "Losses") arising from
or in connection with or related to this Escrow Agreement or being Escrow Agent
hereunder (including but not limited to Losses incurred by Escrow Agent in
connection with its successful defense, in whole or in part, of any claim of
gross negligence or willful misconduct on its part), provided, however, that
nothing
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contained herein shall require Escrow Agent to be indemnified for Losses caused
by its gross negligence or willful misconduct.
15. (a) In the event of any ambiguity or uncertainty hereunder
or in any notice, instruction or other communication received by
Escrow Agent hereunder, Escrow Agent may, in its sole
discretion, refrain from taking any action other than retain
possession of the collected funds in the Escrow Account, the New
York Escrow Account, and the Pennsylvania Escrow Account, unless
Escrow Agent receives written instructions, signed by the
Company, which eliminates such ambiguity or uncertainty.
(b) In the event of any dispute between or conflicting
claims by or among the Company and/or any other person or entity
with respect to any of the collected funds in the Escrow
Account, the New York Escrow Account, or the Pennsylvania Escrow
Account, Escrow Agent shall be entitled, in its sole discretion,
to refuse to comply with any and all claims, demands or
instructions with respect to such collected funds so long as
such dispute or conflict shall continue, and Escrow Agent shall
not be or become liable in any way to the Company for failure or
refusal to comply with such conflicting claims, demands or
instructions. Escrow Agent shall be entitled to refuse to act
until, in its sole discretion, either (i) such conflicting or
adverse claims or demands shall have been determined by a final
order, judgment or decree of a court of competent jurisdiction,
which order, judgment or decree is not subject to appeal, or
settled by agreement between the conflicting parties as
evidenced in a writing satisfactory to Escrow Agent or (ii)
Escrow Agent shall have received security or an indemnity
satisfactory to it sufficient to hold it harmless from and
against any and all Losses which it may incur by reason of so
acting. Escrow Agent may, in addition, elect, in its sole
discretion, to commence an interpleader action or seek other
judicial relief or orders as it may deem, in its sole
discretion, necessary. The costs and expenses (including
reasonable attorneys' fees and expenses) incurred in connection
with such proceeding shall be paid by, and shall be deemed an
obligation of, the Company.
16. All communications and notices required or permitted by this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or by messenger or by overnight delivery service or by
facsimile evidenced by a confirmation of successful transmission, in all cases
addressed to the person for whom it is intended at such person's address set
forth below or to such other address as a party shall have designated by notice
in writing to the other party in the manner provided by this paragraph:
(a) if to the Company:
Behringer Harvard Opportunity REIT I, Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx. 000
Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: President and Chief Executive Officer
(b) if to the Dealer Manager:
Behringer Securities LP
00000 Xxxxxx Xxxxxxx, Xxx. 000
Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Chief Operating Officer of Harvard Property Trust,
LLC, General Partner
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(c) if to the Escrow Agent:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxx, Insurance Trust and Escrow Unit
Each party hereto may, from time to time, change the address to which notices to
it are to be delivered or mailed hereunder by notice in accordance herewith to
the other parties. Escrow Agent is authorized to comply with and rely upon any
notices, instructions or other communications believed by it to have been sent
or given by the Company or by a person or persons authorized by the Company.
Whenever under the terms hereof the time for giving a notice or performing an
act falls upon a Saturday, Sunday, or banking holiday, such time shall be
extended to the next day on which Escrow Agent is open for business.
17. This Agreement shall be interpreted, construed, enforced and
administered in accordance with the internal substantive laws (and not the
choice of law rules) of the State of New York. The Company hereby submits to the
personal jurisdiction of and agrees that all proceedings relating hereto shall
be brought in courts located within the City and State of New York or elsewhere
as Escrow Agent may select. The Company hereby waives the right to trial by jury
and to assert counterclaims in any such proceedings. To the extent that in any
jurisdiction the Company may be entitled to claim, for itself or its assets,
immunity from suit, execution, attachment (whether before or after judgment) or
other legal process, the Company hereby irrevocably agrees not to claim, and
hereby waives, such immunity. The Company waives personal service of process and
consents to service of process by certified or registered mail, return receipt
requested, directed to it at the address last specified for notices hereunder,
and such service shall be deemed completed ten (10) calendar days after the same
is so mailed.
18. This Agreement is for the exclusive benefit of the parties
hereto and their respective legal representatives, successors and assigns
hereunder, and shall not be deemed to give, either express or implied, any legal
or equitable right, remedy, or claim to any other entity or person whatsoever.
19. This Escrow Agreement and any amendment hereto may be executed
by each of the parties hereto in any number of counterparts, each of which
counterpart, when so executed and delivered, shall be deemed to be an original
and all such counterparts shall together constitute one and the same agreement.
20. The provisions set forth in paragraphs 8 through 32 of this
Agreement shall survive the termination of this Agreement and/or the resignation
or removal of the Escrow Agent.
21. The invalidity, illegality or unenforceability of any provision
of this Agreement shall in no way affect the validity, legality or
enforceability of any other provision; and if any provision is held to be
enforceable as a matter of law, the other provisions shall not be affected
thereby and shall remain in full force and effect.
22. Unless otherwise provided in this Agreement, final termination
of this Escrow Agreement shall occur on the date that all funds held in the
Escrow Account, the Pennsylvania Escrow Account and the New York Escrow Account
are distributed either (a) to the Company or to Subscribers and the Company has
informed the Escrow Agent in writing to close the Escrow Account, the
Pennsylvania Escrow Account and the New York Escrow Account pursuant to
paragraph 3 hereof or (b) to a successor escrow agent upon written instructions
from the Company.
23. The Escrow Agent has no responsibility for accepting, rejecting,
or approving subscriptions.
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24. The Escrow Agent will reasonably cooperate with the Company in
fulfilling any of the Company's obligations under the Xxxxxxxx-Xxxxx Act of
2002, as such obligations relate to the provision of services under this
Agreement, including assistance as to the documentation and auditing of Escrow
Agent's procedures.
25. (a) The Company may remove Escrow Agent at any time by
giving to Escrow Agent sixty (60) calendar days' prior notice in
writing signed by the Company. Escrow Agent may resign at any
time by giving to the Company ninety (90) calendar days' prior
written notice thereof.
(b) Within forty-five (45) calendar days after giving the
foregoing notice of removal to Escrow Agent or receiving the
foregoing notice of resignation from Escrow Agent, the Company
appoint a successor Escrow Agent. If a successor Escrow Agent
has not accepted such appointment by the end of such 45-day
period, Escrow Agent may, in its sole discretion, deliver the
collected funds in the Escrow Account, the New York Escrow
Account, and the Pennsylvania Escrow Account to any the Company
at the address provided herein or may apply to a court of
competent jurisdiction for the appointment of a successor Escrow
Agent or for other appropriate relief. The costs and expenses
(including reasonable attorneys' fees and expenses) incurred by
Escrow Agent in connection with such proceeding shall be paid
by, and be deemed an obligation of, the Company.
(c) Upon receipt of the identity of the successor Escrow
Agent, Escrow Agent shall either deliver the collected funds in
the Escrow Account, the New York Escrow Account, and the
Pennsylvania Escrow Account then held hereunder to the successor
Escrow Agent, less Escrow Agent's fees, costs and expenses or
other obligations owed to Escrow Agent, or hold such collected
funds (or any portion thereof), pending distribution, until all
such fees, costs and expenses or other obligations are paid.
(d) Upon delivery of the collected funds to successor Escrow
Agent, Escrow Agent shall have no further duties,
responsibilities or obligations, other than as provided
hereunder.
26. Except as otherwise permitted herein, this Escrow Agreement may
be modified only by a written amendment signed by all the parties hereto, and no
waiver of any provision hereof shall be effective unless expressed in a writing
signed by the party to be charged.
27. The rights and remedies conferred upon the parties hereto shall
be cumulative, and the exercise or waiver of any such right or remedy shall not
preclude or inhibit the exercise of any additional rights or remedies. The
waiver of any right or remedy hereunder shall not preclude the subsequent
exercise of such right or remedy.
28. The Company hereby represents and warrants (a) that this Escrow
Agreement has been duly authorized, executed and delivered on its behalf and
constitutes its legal, valid and binding obligation and (b) that the execution,
delivery and performance of this Escrow Agreement by the Company does not and
will not violate any applicable law or regulation.
29. This Agreement shall constitute the entire agreement of the
parties with respect to the subject matter and supersedes all prior oral or
written agreements in regard thereto.
30. No printed or other material in any language, including
prospectuses, notices, reports, and promotional material which mentions "The
Bank of New York" by name or the rights, powers, or duties of the Escrow Agent
under this Agreement shall be issued by any other parties hereto, or on such
party's
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behalf, without the prior written consent of Escrow Agent.
31. The headings contained in this Agreement are for convenience of
reference only and shall have no effect on the interpretation or operation
hereof.
32. The Escrow Agent does not have any interest in the collected
funds in the Escrow Account, the New York Escrow Account, and the Pennsylvania
Escrow Account but is serving as escrow holder only and having only possession
thereof. The Company shall pay or reimburse the Escrow Agent upon request for
any transfer taxes or other taxes relating to the Escrowed Property incurred in
connection herewith and shall indemnify and hold harmless the Escrow Agent any
amounts that it is obligated to pay in the way of such taxes. Any payments of
income from this Escrow Account, the New York Escrow Account, and the
Pennsylvania Escrow Account shall be subject to withholding regulations then in
force with respect to United States taxes. The parties hereto will provide the
Escrow Agent with appropriate W-9 forms for tax I.D., number certifications, or
W-8 forms for non-resident alien certifications. It is understood that the
Escrow Agent shall be responsible for income reporting only with respect to
income earned on investment of funds which are a part of the collected funds and
is not responsible for any other reporting. This paragraph and paragraph (14)
shall survive notwithstanding any termination of this Escrow Agreement or the
resignation of the Escrow Agent.
[Signature page follows]
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Agreed to as of the ___ day of _________, 2005.
BEHRINGER HARVARD OPPORTUNITY REIT I, INC.
By:
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Xxxxxx X. Xxxxxxxxx, President
BEHRINGER SECURITIES LP
By: Harvard Property Trust, LLC, Its General Partner
By:
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Xxxxxx X. Xxxxxxx, III
Chief Operating Officer
The terms and conditions contained above are hereby accepted and agreed
to by:
THE BANK OF NEW YORK, AS ESCROW AGENT
By:
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Name:
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Title:
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EXHIBIT A
FORM OF NOTICE TO PENNSYLVANIA SUBSCRIBERS
You have tendered a subscription to purchase shares of common stock of
Behringer Harvard Opportunity REIT I, Inc. (the "Company"). Your subscription is
currently being held in escrow. The guidelines of the Pennsylvania Securities
Commission do not permit the Company to accept subscriptions from Pennsylvania
residents until an aggregate of $23,800,000 of gross offering proceeds have been
received by the Company. The Pennsylvania guidelines provide that until this
minimum amount of offering proceeds is received by the Company, every 120 days
during the offering period Pennsylvania Subscribers may request that their
subscription be returned.
If you wish to continue your subscription in escrow until the
Pennsylvania minimum subscription amount is received, nothing further is
required.
If you wish to terminate your subscription for the Company's common
stock and have your subscription returned please so indicate below, sign, date,
and return to the Escrow Agent at The Bank of New York, Corporate Trust
Administration Division, 000 Xxxxxxx Xxxxxx, Xxxxx 0X, Xxxx: Xxxxxxx Xxx,
Insurance Trust and Escrow Unit.
I hereby terminate my prior subscription to purchase shares of common
stock of Behringer Harvard Opportunity REIT I, Inc. and request the return of my
subscription funds. I certify to Behringer Harvard Opportunity REIT I, Inc. that
I am a resident of Pennsylvania.
Signature:
-------------------------------------
Name:
-------------------------------------
(please print)
Date:
-------------------------------------
Please send the subscription refund to:
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EXHIBIT B
ESCROW AGENT COMPENSATION
ESCROW AGENCY FEES AND SERVICES
ACCEPTANCE FEE..................................................WAIVED
This one time fee is payable upon closing date and includes:
[ ] Review of Agreement and supporting documents
[ ] Establishment of accounts
ANNUAL ADMINISTRATION FEE, PER ESCROW ACCOUNT...................$6,000
This fee is not subject to pro-ration and is payable upon closing and on each
anniversary date and includes:
[ ] Monitoring of accounts
[ ] Reporting
[ ] Reconciliation of each closing reflecting individual investments,
receipt date, interest period and totals of each category per closing
ACTIVITY FEES
[ ] Outgoing Wire Transfer/Checks, first four per fund each month included,
thereafter per wire .............................$10
[ ] For automatic purchasers under a fund's automatic purchase plan,
Escrow Agent will obtain ACH payments for a charge of $50 per fund per
month, per 1,000 such investors.
[ ] Per Investment, each trade........................$25
Investment - each directed investment purchase/sale other than bank's
cash reserve and approved money market funds.
