EXHIBIT 1.1
BEHRINGER HARVARD OPPORTUNITY REIT I, INC.
Up to 44,000,000 Shares of Common Stock/$440,000,000
FORM OF
DEALER MANAGER AGREEMENT
______________, 2005
Behringer Securities LP
00000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Behringer Harvard Opportunity REIT I, Inc., a Maryland corporation (the
"Company"), is registering for public sale a maximum of 44,000,000 shares of its
common stock, $0.0001 par value per share, (the "Shares" or the "Stock") to be
issued and sold for $10.00 per share with an aggregate purchase price of
$440,000,000 (40,000,000 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 200 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 November ___, 2004. Copies of such registration statement and
each amendment thereto have been or will be delivered to the Dealer
Manager. (The registration statement and prospectus contained therein,
as finally amended and revised at the effective date of the registration
statement, are respectively hereinafter referred to as the "Registration
Statement" and the "Prospectus," except that if the Prospectus first
filed by the Company pursuant to Rule 424(b) under the Securities Act
shall differ from the Prospectus, the term "Prospectus" shall also
include the Prospectus filed pursuant to Rule 424(b).)
1.2 The Company has been duly and validly organized and
formed as a corporation under the laws of the state of Maryland, with
the power and authority to conduct its business as described in the
Prospectus.
1.3 The Registration Statement and Prospectus comply with
the Securities Act and the Rules and Regulations and do not contain any
untrue statements of material facts or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; provided, however, that the
foregoing provisions of this Section 1.3 will not extend to such
statements contained in or omitted from the Registration Statement or
Prospectus as are primarily within the knowledge of the Dealer Manager
or any of the Dealers and are based upon information furnished by the
Dealer Manager in writing to the Company specifically for inclusion
therein.
1.4 The Company intends to use the funds received from the
sale of the Shares as set forth in the Prospectus.
1.5 No consent, approval, authorization or other order of
any governmental authority is required in connection with the execution
or delivery by the Company of this Agreement or the issuance and sale by
the Company of the Shares, except such as may be required under the
Securities Act or applicable state securities laws.
1.6 There are no actions, suits or proceedings pending or to
the knowledge of the Company, threatened against the Company at law or
in equity or before or by any federal or state commission, regulatory
body or administrative agency or other governmental body, domestic or
foreign, which will have a material adverse effect on the business or
property of the Company.
1.7 The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated and compliance with
the terms of this Agreement by the Company will not conflict with or
constitute a default under any charter, bylaw, indenture, mortgage, deed
of trust, lease, rule, regulation, writ, injunction or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company, except to the extent that the
enforceability of the indemnity and/or contribution provisions contained
in Section 4 of this Agreement may be limited under applicable
securities laws.
1.8 The Company has full legal right, power and authority to
enter into this Agreement and to perform the transactions contemplated
hereby, except to the extent that the enforceability of the indemnity
and/or contribution provisions contained in Section 4 of this Agreement
may be limited under applicable securities laws.
1.9 At the time of the issuance of the Shares, the Shares
will have been duly authorized and validly issued, and upon payment
therefor, will be fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus.
2. COVENANTS OF THE COMPANY
The Company covenants and agrees with the Dealer Manager that:
2.1 It will, at no expense to the Dealer Manager, furnish
the Dealer Manager with such number of printed copies of the
Registration Statement, including all amendments 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.
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2.3 It will: (a) use its best efforts to cause the
Registration Statement to become effective; (b) furnish copies of any
proposed amendment or supplement of the Registration Statement or
Prospectus to the Dealer Manager; (c) file every amendment or supplement
to the Registration Statement or the Prospectus that may be required by
the SEC; and (d) if at any time the SEC shall issue any stop order
suspending the effectiveness of the Registration Statement, it will use
its best efforts to obtain the lifting of such order at the earliest
possible time.
2.4 If at any time when a Prospectus is required to be
delivered under the Securities Act any event occurs as a result of
which, in the opinion of either the Company or the Dealer Manager, the
Prospectus or any other prospectus then in effect would include an
untrue statement of a material fact or, in view of the circumstances
under which they were made, omit to state any material fact necessary to
make the statements therein not misleading, the Company will promptly
notify the Dealer Manager thereof (unless the information shall have
been received from the Dealer Manager) and will effect the preparation
of an amended or supplemental prospectus which will correct such
statement or omission. The Company will then promptly prepare such
amended or supplemental prospectus or prospectuses as may be necessary
to comply with the requirements of Section 10 of the Securities Act.
3. OBLIGATIONS AND COMPENSATION OF DEALER MANAGER
3.1 The Company hereby appoints the Dealer Manager as its
agent and principal distributor for the purpose of selling for cash up
to a maximum of 44,000,000 Shares through Dealers, all of whom shall be
members of the National Association of Securities Dealers, Inc. (NASD).
The Dealer Manager may also sell Shares for cash directly to its own
clients and customers at the public offering price and subject to the
terms and conditions stated in the Prospectus. The Dealer Manager hereby
accepts such agency and distributorship and agrees to use its best
efforts to sell the Shares on said terms and conditions. The Dealer
Manager represents to the Company that (i) it is a member of the NASD;
(ii) it and its employees and representatives have all required licenses
and registrations to act under this Agreement; and (iii) it has
established and implemented anti-money laundering compliance programs in
accordance with applicable law, including applicable NASD rules, SEC
rules and the USA PATRIOT Act of 2001, reasonably expected to detect and
cause the reporting of suspicious transactions in connection with the
sale of Shares of the Company. The Dealer Manager agrees to be bound by
the terms of the Escrow Agreement executed as of _______________, 2005
among ________________, as escrow agent, the Dealer Manager and the
Company, a copy of which is enclosed (the "Escrow Agreement").
3.2 Promptly after the effective date of the Registration
Statement, the Dealer Manager and the Dealers shall commence the
offering of the Shares for cash to the public in jurisdictions in which
the Shares are registered or qualified for sale or in which such
offering is otherwise permitted. The Dealer Manager and the Dealers will
suspend or terminate offering of the Shares upon request of the Company
at any time and will resume offering the Shares upon subsequent request
of the Company.
3.3 Except as provided in the "Plan of Distribution" Section
of the Prospectus, as compensation for the services rendered by the
Dealer Manager, the Company agrees that it will pay to the Dealer
Manager selling commissions in the amount of 7.0% 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 (or 1.0% of the gross proceeds for
sales under the dividend reinvestment feature of the Company's dividend
reinvestment and automatic purchase plan). Notwithstanding the
foregoing, no commissions, payments or amount whatsoever will be paid to
the Dealer Manager under this Section 3.3 unless or until the gross
proceeds of the Shares sold are disbursed to the Company pursuant to
paragraph 3(a) of the Escrow Agreement. Until the Required Capital or
the Pennsylvania/Nebraska Required Capital (as applicable and as defined
in the Escrow Agreement) is obtained, investments will be held in escrow
and, if the Required Capital or the Pennsylvania/Nebraska Required
Capital, as applicable, is not obtained, investments will be returned to
the investors in accordance with the Prospectus. The Company will not
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be liable or responsible to any Dealer for direct payment of commissions
to such Dealer, it being the sole and exclusive responsibility of the
Dealer Manager for payment of commissions to Dealers. Notwithstanding
the above, at its discretion, the Company may act as agent of the Dealer
Manager by making direct payment of commissions to such Dealers without
incurring any liability therefor. With respect to Shares sold pursuant
to the Company's dividend reinvestment plan, the Dealer Manager agrees
to reduce its dealer manager fee to 1.0% of the gross proceeds of the
Shares sold pursuant to the dividend reinvestment plan.
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.
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.
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.
3.6 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
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Registration Statement, or in the Prospectus or any amendment or
supplement to the Prospectus or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and will reimburse each
Dealer or Dealer Manager, its officers and each such controlling person
for any legal or other expenses reasonably incurred by such Dealer or
Dealer Manager, its officers and directors, or such controlling person
in connection with investigating or defending such loss, claim, damage,
liability or action; provided that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of, or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company or Dealer
Manager by or on behalf of any Dealer or Dealer Manager specifically for
use with reference to such Dealer or Dealer Manager in the preparation
of the Registration Statement or any such post-effective amendment
thereof, any such Blue Sky Application or any such preliminary
prospectus or the Prospectus or any such amendment thereof or supplement
thereto; and further provided that the Company will not be liable in any
such case if it is determined that such Dealer or Dealer Manager was at
fault in connection with the loss, claim, damage, liability or action.
Notwithstanding the foregoing, the Company may not indemnify or hold
harmless the Dealer Manager, any Dealer or any of their affiliates in
any manner that would be inconsistent with the provisions of Section
II.G. of the Statement of Policy Regarding Real Estate Investment Trusts
of the North American Securities Administrators Association, Inc.
effective September 29, 1993, as amended (the "NASAA REIT Guidelines").
In particular, but without limitation, the Company may not indemnify or
hold harmless the Dealer Manager, any Dealer or any of their affiliates
for liabilities arising from or out of a violation of state or federal
securities laws, unless one or more of the following conditions are met:
(a) there has been a successful adjudication on the merits
of each count involving alleged securities law
violations;
(b) such claims have been dismissed with prejudice on the
merits by a court of competent jurisdiction; or
(c) a court of competent jurisdiction approves a settlement
of the claims against the indemnitee and finds that
indemnification of the settlement and the related costs
should be made, and the court considering the request
for indemnification has been advised of the position of
the SEC and of the published position of any state
securities regulatory authority in which the securities
were offered as to indemnification for violations of
securities laws.
4.2 The Dealer Manager will indemnify and hold harmless the
Company and each person or firm which has signed the Registration
Statement and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, from and against any
losses, claims, damages or liabilities to which any of the aforesaid
parties may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (a) any untrue statement
of a material fact contained (i) in the Registration Statement
(including the Prospectus as a part thereof) or any post-effective
amendment thereof or (ii) any Blue Sky Application, or (b) the omission
to state in the Registration Statement (including the Prospectus as a
part thereof) or any post-effective amendment thereof or in any Blue Sky
Application a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (c) any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, if used prior to the effective date of the
Registration Statement, or in the Prospectus, or in 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
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furnished to the Company by or on behalf of the Dealer Manager
specifically for use with reference to the Dealer Manager in the
preparation of the Registration Statement or any such post-effective
amendments thereof or any such Blue Sky Application or any such
preliminary prospectus or the Prospectus or any such amendment thereof
or supplement thereto, or (d) any unauthorized use of sales materials or
use of unauthorized verbal representations concerning the Shares by the
Dealer Manager, or (e) any failure to comply with applicable laws
governing money laundry abatement and anti-terrorist financing efforts,
including applicable NASD rules, SEC rules and the USA PATRIOT Act of
2001, and will reimburse the aforesaid parties, in connection with
investigation or defending such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability
which the Dealer Manager may otherwise have.
4.3 Each Dealer severally will indemnify and hold harmless
the Company, Dealer Manager and each of their directors (including any
persons named in any of the Registration Statements with his consent, as
about to become a director), each of their officers who has signed any
of the Registration Statements and each person, if any, who controls the
Company and the Dealer Manager within the meaning of Section 15 of the
Securities Act from and against any losses, claims, damages or
liabilities to which the Company, the Dealer Manager, any such director
or officer, or controlling person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon (a) any untrue statement or alleged untrue statement of a material
fact contained (i) in the Registration Statement (including the
Prospectus as a part thereof) or any post-effective amendment thereof or
(ii) in any Blue Sky Application, or (b) the omission or alleged
omission to state in the Registration Statement (including the
Prospectus as a part thereof or any post-effective amendment thereof or
in any Blue Sky Application a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
(c) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, if used prior to the effective
date of the Registration Statement, or in the Prospectus, or in any
amendment or supplement to the Prospectus or the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading in each
case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Company or the Dealer Manager by or on behalf of such Dealer
specifically for use with reference to such Dealer in the preparation of
the Registration Statement or any such post-effective amendments thereof
or any such Blue Sky Application or any such preliminary prospectus or
the Prospectus or any such amendment thereof or supplement thereto, or
(d) any unauthorized use of sales materials or use of unauthorized
verbal representations concerning the Shares by such Dealer or Dealer's
representations or agents in violation of Section VII of the Selected
Dealer Agreement or otherwise, or (e) any failure to comply with
applicable laws governing money laundry abatement and anti-terrorist
financing efforts, including applicable NASD rules, SEC rules and the
USA PATRIOT Act of 2001, and will reimburse the Company and the Dealer
Manager and any such directors or officers, or controlling person, in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which such Dealer may otherwise have.
4.4 Promptly after receipt by an indemnified party under
this Section 4 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this Section 4, notify in writing
the indemnifying party of the commencement thereof and the omission so
to notify the indemnifying party will relieve such indemnifying party
from any liability under this Section 4 as to the particular item for
which indemnification is then being sought, but not from any other
liability which it may have to any 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
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obligation to reimburse the indemnified party for reasonable legal and
other expenses (subject to Section 4.5) incurred by such indemnified
party in defending itself, except for such expenses incurred after the
indemnifying party has deposited funds sufficient to effect the
settlement, with prejudice, of the claim in respect of which indemnity
is sought. Any such indemnifying party shall not be liable to any such
indemnified party on account of any settlement of any claim or action
effected without the consent of such indemnifying party.
4.5 The indemnifying party shall pay all legal fees and
expenses of the indemnified party in the defense of such claims or
actions; provided, however, that the indemnifying party shall not be
obligated to pay legal expenses and fees to more than one law firm in
connection with the defense of similar claims arising out of the same
alleged acts or omissions giving rise to such claims notwithstanding
that such actions or claims are alleged or brought by one or more
parties against more than one indemnified party. If such claims or
actions are alleged or brought against more than one indemnified party,
then the indemnifying party shall only be obliged to reimburse the
expenses and fees of the one law firm that has been selected by a
majority of the indemnified parties against which such action is finally
brought; and in the event a majority of such indemnified parties is
unable to agree on which law firm for which expenses or fees will be
reimbursable by the indemnifying party, then payment shall be made to
the first law firm of record representing an indemnified party against
the action or claim. Such law firm shall be paid only to the extent of
services performed by such law firm and no reimbursement shall be
payable to such law firm on account of legal services performed by
another law firm.
4.6 The indemnity agreements contained in this Section 4
shall remain operative and in full force and effect regardless of (a)
any investigation made by or on behalf of any Dealer, or any person
controlling any Dealer or by or on behalf of the Company, the Dealer
Manager or any officer or director thereof, or by or on behalf of the
Company or the Dealer Manager, (b) delivery of any Shares and payment
therefor, and (c) any termination of this Agreement. A successor of any
Dealer or of any of the parties to this Agreement, as the case may be,
shall be entitled to the benefits of the indemnity agreements contained
in this Section 4.
5. SURVIVAL OF PROVISIONS
The respective agreements, representations and warranties of the Company
and the Dealer Manager set forth in this Agreement shall remain operative and in
full force and effect regardless of (a) any termination of this Agreement, (b)
any investigation made by or on behalf of the Dealer Manager or any Dealer or
any person controlling the Dealer Manager or any Dealer or by or on behalf of
the Company or any person controlling the Company, and (c) the acceptance of any
payment for the Shares.
6. APPLICABLE LAW; VENUE
This Agreement was executed and delivered in, and its validity,
interpretation and construction shall be governed by the laws of, the State of
Texas; provided however, that causes of action for violations of federal or
state securities laws shall not be governed by this Section. Venue for any
action brought hereunder shall lie exclusively in Dallas, Texas.
7. 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.
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8. SUCCESSORS AND AMENDMENT
8.1 This Agreement shall inure to the benefit of and be
binding upon the Dealer Manager and the Company and their respective
successors. Nothing in this Agreement is intended or shall be construed
to give to any other person any right, remedy or claim, except as
otherwise specifically provided herein. This Agreement shall inure to
the benefit of the Dealers to the extent set forth in Sections 1 and 4
hereof.
8.2 This Agreement may be amended by the written agreement
of the Dealer Manager and the Company.
9. TERM
This Agreement may be terminated by either party (i) immediately upon
notice to the other party in the event that the other party shall have
materially failed to comply with any of the material provisions of this
Agreement on its part to be performed during the term of this Agreement or if
any of the representations, warranties, covenants or agreements of such party
contained herein shall not have been materially complied with or satisfied
within the times specified or (ii) by either party on 60 days' written notice.
In any case, this Agreement shall expire at the close of business on the
effective date that the Offering is terminated. The provisions of Section 4
hereof shall survive such termination. In addition, the Dealer Manager, upon the
expiration or termination of this Agreement, shall (i) promptly deposit any and
all funds in its possession which were received from investors for the sale of
Shares into the appropriate escrow account or, if the minimum number of Shares
have been sold and accepted by the Company, into such other account as the
Company may designate; and (ii) promptly deliver to the Company all records and
documents in its possession which relate to the Offering and are not designated
as dealer copies. The Dealer Manager, at its sole expense, may make and retain
copies of all such records and documents, but shall keep all such information
confidential. The Dealer Manager shall use its best efforts to cooperate with
the Company to accomplish an orderly transfer of management of the Offering to a
party designated by the Company. Upon expiration or termination of this
Agreement, the Company shall pay to the Dealer Manager all commissions to which
the Dealer Manager is or becomes entitled under Section 3 at such time as such
commissions become payable.
10. CONFIRMATION
The Company hereby agrees and assumes the duty to confirm on its behalf
and on behalf of dealers or brokers who sell the Shares all orders for purchase
of Shares accepted by the Company. Such confirmations will comply with the rules
of the SEC and the NASD, and will comply with applicable laws of such other
jurisdictions to the extent the Company is advised of such laws in writing by
the Dealer Manager.
11. SUITABILITY OF INVESTORS
The Dealer Manager will offer Shares, and in its agreements with Dealers
will require that the Dealers offer Shares, only to persons who meet the
financial qualifications set forth in the Prospectus or in any suitability
letter or memorandum sent to it by the Company and will only make offers to
persons in the states in which it is advised in writing that the Shares are
qualified for sale or that such qualification is not required. In offering
Shares, the Dealer Manager will, and in its agreements with Dealers, the Dealer
Manager will require that the Dealers will, comply with the provisions of all
applicable rules and regulations relating to suitability of investors, including
without limitation, the provisions of Article III.C. of the NASAA REIT
Guidelines.
12. SUBMISSION OF ORDERS
12.1 Until such time as the Company has received and accepted
subscriptions for at least 200,000 shares and released the proceeds from
such subscriptions from escrow (or such greater amount as may be
applicable in respect of any greater escrow in respect of subscribers
from any state), those
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persons who purchase Shares will be instructed by the Dealer Manager or
the Dealer to make their checks payable to "_______________, as escrow
agent for Behringer Harvard Opportunity REIT I, Inc." Thereafter, in the
discretion of the Dealer Manager upon notice to the Dealer, those
persons who purchase shares will be instructed by the Dealer to make
their checks payable to "Behringer Harvard Opportunity REIT I, Inc." The
Dealer Manager and any Dealer receiving a check not conforming to the
foregoing instructions shall return such check directly to such
subscriber not later than the end of the next business day following its
receipt. Checks received by the Dealer Manager or Dealer that 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 that are "$250,000
broker-dealers" to instruct their customers to make their checks for
Shares subscribed for payable directly to the Dealer. In such case, the
Dealer will collect the proceeds of the subscribers' checks and issue a
check for the aggregate amount of the subscription proceeds made payable
to the order of the escrow agent, or if instructed by the Dealer Manager
as provided above, made payable to the order of the Company.
12.2 If a Dealer conducts its internal supervisory procedures
at the location where subscription documents and checks are initially
received, the Dealer shall forward (i) the subscription documents to the
Dealer Manager and (ii) the checks to the escrow agent or the Dealer
Manager, as applicable, by noon of the next business day following
receipt of the subscription documents and the check.
12.3 If a Dealer's internal supervisory procedures are to be
performed at a different location (the "Final Review Office"), the
subscription documents and check must be transmitted to the Final Review
Office by the end of the next business day following receipt of the
subscription documents and check by the Dealer. The Final Review Office
will, by the next business day following receipt of the subscription
documents and check, forward both the subscription documents and check
to the Dealer Manager as processing broker-dealer in order that the
Dealer Manager may complete its review of the documentation and process
the subscription documents and check.
12.4 Any check received by the Dealer Manager directly or as
processing broker-dealer from the Dealers will, in all cases, be
forwarded as soon as practicable, but in any event by the end of the
second business day following receipt by the Dealer Manager of the
subscription documents and check. Checks of rejected subscribers will be
promptly returned to such subscribers.
12.5 If requested by the Company, the Dealer Manager shall
obtain, and shall cause the Dealers to obtain, from subscribers for the
Shares, other documentation reasonably deemed by the Company to be
required under applicable law or as may be necessary to reflect the
policies of the Company. Such documentation may include, without
limitation, subscribers' written acknowledgement and agreement to the
privacy policies of the Company.
13. SELECTED INVESTMENT ADVISOR AGREEMENT
With respect to any provision of information concerning the Offering by
a selected investment advisor (the "Investment Advisor") presently registered
under the Investment Advisers Act of 1940, as amended, and presently and
appropriately registered in each state in which the Investment Advisor has
clients, the Company and the Investment Advisor shall enter into a Selected
Investment Advisor Agreement in substantially the form attached hereto as
Exhibit B.
14. NOTICES.
Any notice, approval, request, authorization, direction or other
communication under this Agreement shall be given in writing and shall be deemed
to be delivered when delivered in person or deposited in the United States mail,
properly addressed and stamped with the required postage, registered or
certified mail, return receipt requested, to the intended recipient as set forth
below:
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If to the Company: Behringer Harvard Opportunity REIT I, Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chairman of the Board
If to the Dealer Manager: Behringer Securities LP
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: President
Any party may change its address specified above by giving the other
party notice of such change in accordance with this Section 14.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us
as of the date first above written.
Very truly yours,
BEHRINGER HARVARD OPPORTUNITY REIT I, INC.
By:
--------------------------------------
Xxxxxx X. Xxxxxxx, III, Executive
Vice President
Accepted and agreed as of the
date first above written.
BEHRINGER SECURITIES LP
By: HARVARD PROPERTY TRUST, LLC
General Partner
By:
-----------------------------------
Xxxxxx X. Xxxxxxx, III, Executive
Vice President
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EXHIBIT A
BEHRINGER HARVARD OPPORTUNITY REIT I, INC.
Up to 44,000,000 Shares of Common Stock/$440,000,000
SELECTED DEALER AGREEMENT
Ladies and Gentlemen:
Behringer Securities LP, as the dealer manager ("Dealer Manager") for
Behringer Harvard Opportunity REIT I, Inc. (the "Company"), a Maryland
corporation, invites you (the "Dealer") to participate in the distribution of
shares of common stock ("Shares") of the Company subject to the following terms:
I. Dealer Manager Agreement
The Dealer Manager has entered into an agreement with the Company called
the Dealer Manager Agreement dated ________________, 2005, in the form attached
hereto as Exhibit A (the "Dealer Manager Agreement", the terms of the Dealer
Manager Agreement relating to the Dealer are incorporated herein by reference as
if set forth verbatim and capitalized terms not otherwise defined herein shall
have the meanings given them in the Dealer Manager Agreement). By your
acceptance of this Agreement, you will become one of the Dealers referred to in
the Dealer Manager Agreement and will be entitled and subject to the
indemnification provisions contained in the Dealer Manager Agreement, including
the provisions of the Dealer Manager Agreement wherein the Dealers severally
agree to indemnify and hold harmless the Company, the Dealer Manager and each
officer and director thereof, and each person, if any, who controls the Company
and the Dealer Manager within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"). Except as otherwise specifically stated herein,
all terms used in this Agreement have the meanings provided in the Dealer
Manager Agreement. The Shares are offered solely through broker-dealers who are
members of the National Association of Securities Dealers, Inc. ("NASD").
Dealer hereby agrees to use its best efforts to sell the Shares for cash
on the terms and conditions stated in the Prospectus. Nothing in this Agreement
shall be deemed or construed to make Dealer an employee, agent, representative
or partner of the Dealer Manager or of the Company, and Dealer is not authorized
to act for the Dealer Manager or the Company or to make any representations on
their behalf except as set forth in the Prospectus and such other printed
information furnished to Dealer by the Dealer Manager or the Company to
supplement the Prospectus ("supplemental information").
II. Submission of Orders
Until such time as the Company has received and accepted subscriptions
for at least 200,000 shares and released the proceeds from such subscriptions
from escrow (or such greater amount as may be applicable in respect of any
greater escrow in respect of subscribers from any state), those persons who
purchase Shares will be instructed by the Dealer Manager or the Dealer to make
their checks payable to "_______________, as escrow agent for Behringer Harvard
Opportunity REIT I, Inc." Thereafter, in the discretion of the Dealer Manager
upon notice to the Dealer, those persons who purchase shares will be instructed
by the Dealer to make their checks payable to "Behringer Harvard Opportunity
REIT I, Inc." Any Dealer receiving a check not conforming to the foregoing
instructions shall return such check directly to such subscriber not later than
the end of the next business day following its receipt. Checks received by the
Dealer which conform to the foregoing instructions shall be transmitted for
deposit pursuant to one of the methods in this Article II. The Dealer Manager
may authorize Dealer if Dealer is a "$250,000 broker-dealer" to instruct its
customers to make its checks for Shares subscribed for payable directly to the
Dealer, in which case the Dealer will collect the
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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, or
if the Company has received and accepted subscriptions for at least 200,000
shares and released the proceeds from such subscriptions from escrow, made
payable to the order of the Company. Transmittal of received investor funds will
be made in accordance with the following procedures:
(a) If the Dealer conducts its internal supervisory
procedures at the location where subscription documents and checks are
initially received, the Dealer shall forward (i) the subscription
documents to the Dealer Manager and (ii) the checks to the escrow agent
or the Dealer Manager, as applicable, by noon of the next business day
following receipt of the subscription documents and the check.
(b) If the internal supervisory procedures are to be
performed at a different location (the "Final Review Office"), the
subscription documents and check must be transmitted to the Final Review
Office by the end of the next business day following receipt of the
subscription documents and check by the Dealer. The Final Review Office
will, by the next business day following receipt of the subscription
documents and check, forward both the subscription documents and check
to the Dealer Manager as processing broker-dealer in order that the
Dealer Manager may complete its review of the documentation and process
the subscription documents and check.
If requested by the Company or the Dealer Manager, the Dealer shall
obtain from subscribers for the Shares, other documentation reasonably deemed by
the Company or the Dealer Manager to be required under applicable law or as may
be necessary to reflect the policies of the Company or the Dealer Manager. Such
documentation may include, without limitation, subscribers' written
acknowledgement and agreement to the privacy policies of the Company or the
Dealer Manager.
III. Pricing
Shares shall be offered to the public at the offering price of $10.00
per Share payable in cash. Except as otherwise indicated in the Prospectus or in
any letter or memorandum sent to the Dealer by the Company or Dealer Manager, a
minimum initial purchase of 200 Shares is required. Except as otherwise
indicated in the Prospectus, additional investments may be made in cash in
minimal increments of at least 2.5 Shares. The Shares are nonassessable. The
Dealer hereby agrees to place any order for the full purchase price.
IV. Dealers' Commissions
Except for discounts described in or as otherwise provided in the "Plan
of Distribution" Section of the Prospectus, the Dealer's selling commission
applicable to the total public offering price of Shares sold by Dealer which it
is authorized to sell hereunder is 7.0% 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 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 the gross proceeds of the
Shares sold are disbursed to the Company pursuant to
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paragraph 3(a) of the Escrow Agreement. Until the Required Capital or the
Pennsylvania/Nebraska Required Capital, as applicable and as defined in the
Escrow Agreement, is obtained, investments will be held in escrow and, if the
Required Capital or the Pennsylvania/Nebraska Required Capital, as applicable,
is not obtained, investments will be returned to the investors in accordance
with the Prospectus.
The parties hereby agree that the foregoing commission is not in excess
of the usual and customary distributors' or sellers' commission received in the
sale of securities similar to the Shares, that Dealer's interest in the offering
is limited to such commission from the Dealer Manager and Dealer's indemnity
referred to in Section 4 of the Dealer Manager Agreement, that the Company is
not liable or responsible for the direct payment of such commission to the
Dealer.
V. Payment
Payments of selling commissions will be made by the Dealer Manager (or
by the Company as provided in the Dealer Manager Agreement) to Dealer within 30
days of the receipt by the Dealer Manager of the gross commission payments from
the Company.
VI. Right to Reject Orders or Cancel Sales
All orders, whether initial or additional, are subject to acceptance by
and shall only become effective upon confirmation by the Company, which reserves
the right to reject any order for any or no reason. Orders not accompanied by a
Subscription Agreement and Signature Page and the required check in payment for
the Shares may be rejected. Issuance and delivery of the Shares will be made
only after actual receipt of payment therefor. If any check is not paid upon
presentment, or if the Company is not in actual receipt of clearinghouse funds
or cash, certified or cashier's check or the equivalent in payment for the
Shares within 15 days of sale, the Company reserves the right to cancel the sale
without notice. In the event an order is rejected, canceled or rescinded for any
reason, the Dealer agrees to return to the Dealer Manager any commission
theretofore paid with respect to such order.
VII. Prospectus and Supplemental Information
Dealer is not authorized or permitted to give and will not give, any
information or make any representation concerning the Shares except as set forth
in the Prospectus and supplemental information. The Dealer Manager will supply
Dealer with reasonable quantities of the Prospectus, any supplements thereto and
any amended Prospectus, as well as any supplemental information, for delivery to
investors, and Dealer will deliver a copy of the Prospectus and all supplements
thereto and any amended Prospectus to each investor to whom an offer is made
prior to or simultaneously with the first solicitation of an offer to sell the
Shares to an investor. The Dealer agrees that it will not send or give any
supplements thereto and any amended Prospectus to that investor unless it has
previously sent or given a Prospectus and all supplements thereto and any
amended Prospectus to that investor or has simultaneously sent or given a
Prospectus and all supplements thereto and any amended Prospectus with such
supplemental information. Dealer agrees that it will not show or give to any
investor or prospective investor or reproduce any material or writing which is
supplied to it by the Dealer Manager and marked "dealer only" or otherwise
bearing a legend denoting that it is not to be used in connection with the sale
of Shares to members of the public. Dealer agrees that it will not use in
connection with the offer or sale of Shares any material or writing which
relates to another Company supplied to it by the Company or the Dealer Manager
bearing a legend which states that such material may not be used in connection
with the offer or sale of any securities other than the Company to which it
relates. Dealer further agrees that it will not use in connection with the offer
or sale of Shares any materials or writings which have not been previously
approved by the Dealer Manager. Each Dealer agrees, if the Dealer Manager so
requests, to furnish a copy of any revised preliminary Prospectus to each person
to whom it has furnished a copy of any previous preliminary Prospectus, and
further agrees that it will itself mail or otherwise deliver all preliminary and
final Prospectuses required for 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
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transactions in the Shares for a period of 90 days from the effective date of
the Registration Statement or such longer period as may be required by the
Exchange Act. On becoming a Dealer, and in offering and selling Shares, Dealer
agrees to comply with all the applicable requirements under the Securities Act
and the Exchange Act. Notwithstanding the termination of this Agreement or the
payment of any amount to Dealer, Dealer agrees to pay Dealer's proportionate
share of any claim, demand or liability asserted against Dealer and the other
Dealers on the basis that Dealers or any of them constitute an association,
unincorporated business or other separate entity, including in each case
Dealer's proportionate share of any expenses incurred in defending against any
such claim, demand or liability.
VIII. License and Association Membership
Dealer's acceptance of this Agreement constitutes a representation to
the Company and the Dealer Manager that Dealer is a properly registered or
licensed broker-dealer, duly authorized to sell Shares under Federal and state
securities laws and regulations and in all states where it offers or sells
Shares, and that it is a member in good standing of the NASD. This Agreement
shall automatically terminate if the Dealer ceases to be a member in good
standing of such association, or in the case of a foreign dealer, so to conform.
Dealer agrees to notify the Dealer Manager immediately if Dealer ceases to be a
member in good standing, or in the case of a foreign dealer, so to conform. The
Dealer Manager also hereby agrees to comply with the Conduct Rules of the NASD,
including but not limited to Rules 2730, 2740, 2420, 2750 and 2790.
IX. Anti-Money Laundering Compliance Programs
Dealer represents to the Company and the Dealer Manager that Dealer has
established and implemented anti-money laundering compliance programs in
accordance with applicable law, including applicable NASD rules, SEC rules and
the USA PATRIOT Act of 2001, reasonably expected to detect and cause the
reporting of suspicious transactions in connection with the sale of Shares of
the Company.
X. Limitation of Offer
Dealer will offer Shares only to persons who meet the financial
qualifications set forth in the Prospectus or in any suitability letter or
memorandum sent to it by the Company or the Dealer Manager and will only make
offers to persons in the states in which it is advised in writing that the
Shares are qualified for sale or that such qualification is not required. In
offering Shares, Dealer will comply with the provisions of the NASD Conduct
Rules set forth in the NASD Manual, as well as all other applicable rules and
regulations relating to suitability of investors, including without limitation,
the provisions of Article III.C. of the Statement of Policy Regarding Real
Estate Investment Trusts of the North American Securities Administrators
Association, Inc.
XI. Termination
Dealer will suspend or terminate its offer and sale of Shares upon the
request of the Company or the Dealer Manager at any time and will resume its
offer and sale of Shares hereunder upon subsequent request of the Company or the
Dealer Manager. Any party may terminate this Agreement by written notice. Such
termination shall be effective 48 hours after the mailing of such notice. This
Agreement is the entire agreement of the parties and supersedes all prior
agreements, if any, between the parties hereto.
This Agreement may be amended at any time by the Dealer Manager by
written notice to the Dealer, and any such amendment shall be deemed accepted by
Dealer upon placing an order for sale of Shares after he has received such
notice.
XII. Privacy Laws
The Dealer Manager and Dealer (each referred to individually in this
section as "party") agree as follows:
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(a) Each party agrees to abide by and comply with (i) the
privacy standards and requirements of the Xxxxx-Xxxxx-Xxxxxx Act of 1999
("GLB Act"), (ii) the privacy standards and requirements of any other
applicable Federal or state law, and (iii) its own internal privacy
policies and procedures, each as may be amended from time to time.
(b) Each party agrees to refrain from the use or disclosure
of nonpublic personal information (as defined under the GLB Act) of all
customers who have opted out of such disclosures except as necessary to
service the customers or as otherwise necessary or required by
applicable law; and
(c) Each party shall be responsible for determining which
customers have opted out of the disclosure of nonpublic personal
information by periodically reviewing and, if necessary, retrieving a
list of such customers (the "List") as provided by each to identify
customers that have exercised their opt-out rights. In the event either
party uses or discloses nonpublic personal information of any customer
for purposes other than servicing the customer, or as otherwise required
by applicable law, that party will consult the List to determine whether
the affected customer has exercised his or her opt-out rights. Each
party understands that each is prohibited from using or disclosing any
nonpublic personal information of any customer that is identified on the
List as having opted out of such disclosures.
XIII. Notice
All notices will be in writing and will be duly given to the Dealer
Manager when mailed to 00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000,
and to Dealer when mailed to the address specified by Dealer herein.
XIV. Attorneys' Fees, Applicable Law and Venue
In any action to enforce the provisions of this Agreement or to secure
damages for its breach, the prevailing party shall recover its costs and
reasonable attorney's fees. This Agreement shall be construed under the laws of
the State of Texas and shall take effect when signed by Dealer and countersigned
by the Dealer Manager. Venue for any action (including arbitration) brought
hereunder shall lie exclusively in Dallas, Texas.
[SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on its behalf by its duly authorized agent.
THE DEALER MANAGER:
BEHRINGER SECURITIES LP
By: HARVARD PROPERTY TRUST, LLC
General Partner
By:
-------------------------------------
Xxxxxx X. Xxxxxxx III,
Executive Vice President
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We have read the foregoing Agreement and we hereby accept and agree to
the terms and conditions therein set forth. We hereby represent that the list
below of jurisdictions in which we are registered or licensed as a broker or
dealer and are fully authorized to sell securities is true and correct, and we
agree to advise you of any change in such list during the term of this
Agreement.
1. Identity of Dealer:
Name:___________________________________________________________________________
Type of entity:_________________________________________________________________
(corporation, partnership, proprietorship, etc.)
Organized in the State of:______________________________________________________
Licensed as broker-dealer in the following States:______________________________
________________________________________________________________________________
Tax I.D. #:_____________________________________________________________________
2. Person to receive notice pursuant to Section XIII:
Name:___________________________________________________________________________
Company:________________________________________________________________________
Address:________________________________________________________________________
City, State and Zip Code:_______________________________________________________
Telephone No.:__________________________________________________________________
Facsimile No.:__________________________________________________________________
AGREED TO AND ACCEPTED BY THE DEALER:
___________________________________________________
(Dealer's Firm Name)
By:________________________________________________
Signature
Name:______________________________________________
Title:_____________________________________________
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