EXHIBIT 1.1
BEHRINGER HARVARD REIT I, INC.
Up to 88,000,000 Shares of Common Stock/$880,000,000
DEALER MANAGER AGREEMENT
February ___, 2003
Behringer Securities LP
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
Behringer Harvard REIT I, Inc., a Maryland corporation (the "Company"), is
registering for public sale a maximum of 91,520,000 shares of its common stock,
$0.0001 par value per share (the "Offering"), of which amount 3,520,000 shares
are to be sold upon exercise of soliciting dealer warrants to be issued to
broker-dealers participating in the Offering having a purchase price of $0.0008
per warrant and exercise price of $12.00 (the "Soliciting Dealer Warrants"),
with the balance of 88,000,000 shares (the "Shares" or the "Stock") to be issued
and sold for $10.00 per share with an aggregate purchase price of $880,000,000
(80,000,000 Shares to be offered to the public and 8,000,000 Shares to be
offered pursuant to the Company's dividend reinvestment plan). There shall be a
minimum purchase by any one person of 100 Shares (except as otherwise indicated
in the Prospectus or in any letter or memorandum from the Company to Behringer
Securities LP (the "Dealer Manager")). Terms not defined herein shall have the
same meaning as in the Prospectus. In connection therewith, the Company hereby
agrees with you, the Dealer Manager, as follows:
1. Representations and Warranties of the Company
The Company represents and warrants to the Dealer Manager and each dealer with
whom the Dealer Manager has entered into or will enter into a Selected Dealer
Agreement in the form attached to this Agreement as Exhibit A (said dealers
being hereinafter called the "Dealers") that:
1.1 A registration statement with respect to the Company has been prepared by
the Company in accordance with applicable requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the applicable rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "SEC") promulgated thereunder, covering the Shares. Such
registration statement, which includes a preliminary prospectus, was initially
filed with the SEC on or about June 28, 2002. Copies of such registration
statement and each amendment thereto have been or will be delivered to the
Dealer Manager. (The registration statement and prospectus contained therein, as
finally amended and revised at the effective date of the registration statement,
are respectively hereinafter referred to as the "Registration Statement" and the
"Prospectus," except that if the Prospectus first filed by the Company pursuant
to Rule 424(b) under the Securities Act shall differ from the Prospectus, the
term "Prospectus" shall also include the Prospectus filed pursuant to Rule
424(b).)
1.2 The Company has been duly and validly organized and formed as a corporation
under the laws of the state of Maryland, with the power and authority to conduct
its business as described in the Prospectus.
1.3 The Registration Statement and Prospectus comply with the Securities Act and
the Rules and Regulations and do not contain any untrue statements of material
facts or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; provided,
however, that the foregoing provisions of this Section 1.3 will not extend to
such statements contained in or omitted from the Registration
Statement or Prospectus as are primarily within the knowledge of the Dealer
Manager or any of the Dealers and are based upon information furnished by the
Dealer Manager in writing to the Company specifically for inclusion therein.
1.4 The Company intends to use the funds received from the sale of the Shares as
set forth in the Prospectus.
1.5 No consent, approval, authorization or other order of any governmental
authority is required in connection with the execution or delivery by the
Company of this Agreement or the issuance and sale by the Company of the Shares,
except such as may be required under the Securities Act or applicable state
securities laws.
1.6 There are no actions, suits or proceedings pending or to the knowledge of
the Company, threatened against the Company at law or in equity or before or by
any federal or state commission, regulatory body or administrative agency or
other governmental body, domestic or foreign, which will have a material adverse
effect on the business or property of the Company.
1.7 The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this Agreement
by the Company will not conflict with or constitute a default under any charter,
bylaw, indenture, mortgage, deed of trust, lease, rule, regulation, writ,
injunction or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company, except to the extent
that the enforceability of the indemnity and/or contribution provisions
contained in Section 4 of this Agreement may be limited under applicable
securities laws.
1.8 The Company has full legal right, power and authority to enter into this
Agreement and to perform the transactions contemplated hereby, except to the
extent that the enforceability of the indemnity and/or contribution provisions
contained in Section 4 of this Agreement may be limited under applicable
securities laws.
1.9 At the time of the issuance of the Shares, the Shares will have been duly
authorized and validly issued, and upon payment therefor, will be fully paid and
nonassessable and will conform to the description thereof contained in the
Prospectus.
2. Covenants of the Company
The Company covenants and agrees with the Dealer Manager that:
2.1 It will, at no expense to the Dealer Manager, furnish the Dealer Manager
with such number of printed copies of the Registration Statement, including all
amendments and exhibits thereto, as the Dealer Manager may reasonably request.
It will similarly furnish to the Dealer Manager and others designated by the
Dealer Manager as many copies as the Dealer Manager may reasonably request in
connection with the offering of the Shares of: (a) the Prospectus in preliminary
and final form and every form of supplemental or amended prospectus; (b) this
Agreement; and (c) any other printed sales literature or other materials
(provided that the use of said sales literature and other materials has been
first approved for use by the Company and all appropriate regulatory agencies).
2.2 It will furnish such proper information and execute and file such documents
as may be necessary for the Company to qualify the Shares for offer and sale
under the securities laws of such jurisdictions as the Dealer Manager may
reasonably designate and will file and make in each year such statements and
reports as may be required. The Company will furnish to the Dealer Manager a
copy of such papers filed by the Company in connection with any such
qualification.
2.3 It will: (a) use its best efforts to cause the Registration Statement to
become effective; (b) furnish copies of any proposed amendment or supplement of
the Registration Statement or Prospectus to the Dealer Manager; (c) file every
amendment or supplement to the Registration Statement or the Prospectus that may
be required by the SEC; and (d) if at any time the SEC shall issue any stop
order suspending the effectiveness of the Registration Statement, it will use
its best efforts to obtain the lifting of such order at the earliest possible
time.
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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 88,000,000
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 February ___,
2003 among Xxxxx Fargo Bank Iowa, National Association, 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% of the gross proceeds of the Shares sold plus a dealer manager fee in the
amount of 2.5% of the gross proceeds of the Shares sold. Notwithstanding the
foregoing, no commissions, payments or amount whatsoever will be paid to the
Dealer Manager under this Section 3.3 unless or until 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 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.
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3.5 The Dealer Manager shall use and distribute in conjunction with the offer
and sale of any Shares only the Prospectus and such sales literature and
advertising as shall have been previously approved in writing by the Company.
3.6 The Dealer Manager shall cause Shares to be offered and sold only in those
jurisdictions specified in writing by the Company for whose account Shares are
then offered for sale, and such list of jurisdictions shall be updated by the
Company as additional states are added. The Company shall specify only such
jurisdictions in which the offering and sale of its Shares has been authorized
by appropriate state regulatory authorities. No Shares shall be offered or sold
for the account of the Company in any other states.
3.7 The Dealer Manager represents and warrants to the Company that it will not
represent or imply that the escrow agent, as identified in the Prospectus, has
investigated the desirability or advisability of investment in the Company, or
has approved, endorsed or passed upon the merits of the Shares or the Company,
nor will it use the name of said escrow agent in any manner whatsoever in
connection with the offer or sale of the Shares other than by acknowledgment
that it has agreed to serve as escrow agent.
4. Indemnification
4.1 The Company will indemnify and hold harmless the Dealers and the Dealer
Manager, their officers and directors and each person, if any, who controls such
Dealer or Dealer Manager within the meaning of Section 15 of the Securities Act
from and against any losses, claims, damages or liabilities, joint or several,
to which such Dealers or Dealer Manager, their officers and directors, or such
controlling person may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (a) any untrue statement or alleged
untrue statement of a material fact contained (i) in any Registration Statement
(including the Prospectus as a part thereof) or any post-effective amendment
thereto or in the Prospectus or any amendment or supplement to the Prospectus or
(ii) in any blue sky application or other document executed by the Company or on
its behalf specifically for the purpose of qualifying any or all of the Shares
for sale under the securities laws of any jurisdiction or based upon written
information furnished by the Company under the securities laws thereof (any such
application, document or information being hereinafter called a "Blue Sky
Application"), or (b) the omission or alleged omission to state in the
Registration Statement (including the Prospectus as a part thereof) or any
post-effective amendment thereof or in any Blue Sky Application a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (c) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, if used prior to the
effective date of the Registration Statement, or in the Prospectus or any
amendment or supplement to the Prospectus or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, and will reimburse each Dealer or Dealer
Manager, its officers and each such controlling person for any legal or other
expenses reasonably incurred by such Dealer or Dealer Manager, its officers and
directors, or such controlling person in connection with investigating or
defending such loss, claim, damage, liability or action; provided that the
Company will not be liable in any such case to the extent 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:
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(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 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
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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 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.
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6. Applicable Law; Venue
This Agreement was executed and delivered in, and its validity, interpretation
and construction shall be governed by the laws of, the State of Texas; provided
however, that causes of action for violations of federal or state securities
laws shall not be governed by this Section. Venue for any action brought
hereunder shall lie exclusively in Dallas, Texas.
7. Counterparts
This Agreement may be executed in any number of counterparts. Each counterpart,
when executed and delivered, shall be an original contract, but all
counterparts, when taken together, shall constitute one and the same Agreement.
8. Successors and Amendment
8.1 This Agreement shall inure to the benefit of and be binding upon the Dealer
Manager and the Company and their respective successors. Nothing in this
Agreement is intended or shall be construed to give to any other person any
right, remedy or claim, except as otherwise specifically 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.
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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 Those persons who purchase Shares will be instructed by the Dealer Manager
or the Dealer to make their checks payable to "Xxxxx Fargo Bank Iowa, N.A., as
escrow agent for Behringer Harvard REIT I, Inc." The Dealer Manager and any
Dealer receiving a check not conforming to the foregoing instructions shall
return such check directly to such subscriber not later than the end of the next
business day following its receipt. Checks received by the Dealer Manager or
Dealer which conform to the foregoing instructions shall be transmitted for
deposit pursuant to one of the methods described in this Section 12. Transmittal
of received investor funds will be made in accordance with the following
procedures. The Dealer Manager may authorize certain Dealers which are "$250,000
broker-dealers" to instruct their customers to make their checks for Shares
subscribed for payable directly to the Dealer. In such case, the Dealer will
collect the proceeds of the subscribers' checks and issue a check for the
aggregate amount of the subscription proceeds made payable to the order of the
escrow agent.
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 by noon of the next business day following receipt of the
subscription documents and the check.
12.3 If a Dealer's internal supervisory procedures are to be performed at a
different location (the "Final Review Office"), the subscription documents and
check must be transmitted to the Final Review Office by the end of the next
business day following receipt of the subscription documents and check by the
Dealer. The Final Review Office will, by the next business day following receipt
of the subscription documents and check, forward both the subscription documents
and check to the Dealer Manager as processing broker-dealer in order that the
Dealer Manager may complete its review of the documentation and process the
subscription documents and check.
12.4 Any check received by the Dealer Manager directly or as processing
broker-dealer from the Dealers will, in all cases, be forwarded to the escrow
agent as soon as practicable, but in any event by the end of the second business
day following receipt by the Dealer Manager of the subscription documents and
check. Checks of rejected subscribers will be promptly returned to such
subscribers.
12.5 If requested by the Company, the Dealer Manager shall obtain, and shall
cause the Dealers to obtain, from subscribers for the Shares, other
documentation reasonably deemed by the Company to be required under applicable
law or as may be necessary to reflect the policies of the Company. Such
documentation may include, without limitation, subscribers' written
acknowledgement and agreement to the privacy policies of the Company.
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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:
If to the Company: Behringer Harvard REIT I, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chairman of the Board
If to the Dealer Manager: Behringer Securities LP
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
Any party may change its address specified above by giving the other party
notice of such change in accordance with this Section 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 REIT I, INC.
By:
-------------------------------
Xxxxxx X. Xxxxxxxxx, President
Accepted and agreed as of the date
first above written.
BEHRINGER SECURITIES LP
By: HARVARD PROPERTY TRUST, LLC
General Partner
By:
-----------------------------------------------
Xxxxxx X. Xxxxxxx, III, Chief Operating Officer
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EXHIBIT A
BEHRINGER HARVARD REIT I, INC.
Up to 88,000,000 Shares of Common Stock/$880,000,000
SELECTED DEALER AGREEMENT
Ladies and Gentlemen:
Behringer Securities LP, as the dealer manager ("Dealer Manager") for Behringer
Harvard REIT I, Inc. (the "Company"), a Maryland corporation, invites you (the
"Dealer") to participate in the distribution of shares of common stock
("Shares") of the Company subject to the following terms:
I. Dealer Manager Agreement
The Dealer Manager has entered into an agreement with the Company called the
Dealer Manager Agreement dated February ___, 2003, in the form attached hereto
as Exhibit A (the "Dealer Manager Agreement", the terms of the Dealer Manager
Agreement relating to the Dealer are incorporated herein by reference as if set
forth verbatim and capitalized terms not otherwise defined herein shall have the
meanings given them in the Dealer Manager Agreement). By your acceptance of this
Agreement, you will become one of the Dealers referred to in the Dealer Manager
Agreement and will be entitled and subject to the indemnification provisions
contained in the Dealer Manager Agreement, including the provisions of the
Dealer Manager Agreement wherein the Dealers severally agree to indemnify and
hold harmless the Company, the Dealer Manager and each officer and director
thereof, and each person, if any, who controls the Company and the Dealer
Manager within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). Except as otherwise specifically stated herein, all terms
used in this Agreement have the meanings provided in the Dealer Manager
Agreement. The Shares are offered solely through broker-dealers who are members
of the National Association of Securities Dealers, Inc. ("NASD").
Dealer hereby agrees to use its best efforts to sell the Shares for cash on the
terms and conditions stated in the Prospectus. Nothing in this Agreement shall
be deemed or construed to make Dealer an employee, agent, representative or
partner of the Dealer Manager or of the Company, and Dealer is not authorized to
act for the Dealer Manager or the Company or to make any representations on
their behalf except as set forth in the Prospectus and such other printed
information furnished to Dealer by the Dealer Manager or the Company to
supplement the Prospectus ("supplemental information").
II. Submission of Orders
Those persons who purchase Shares will be instructed by the Dealer to make their
checks payable to "Xxxxx Fargo Bank Iowa, N.A., as escrow agent for Behringer
Harvard REIT I, Inc." Any Dealer receiving a check not conforming to the
foregoing instructions shall return such check directly to such subscriber not
later than the end of the next business day following its receipt. Checks
received by the Dealer which conform to the foregoing instructions shall be
transmitted for deposit pursuant to one of the methods in this Article II. The
Dealer Manager may authorize Dealer if Dealer is a "$250,000 broker-dealer" to
instruct its customers to make its checks for Shares subscribed for payable
directly to the Dealer, in which case the Dealer will collect the proceeds of
the subscriber's checks and issue a check made payable to the order of the
escrow agent for the aggregate amount of the subscription proceeds. Transmittal
of received investor funds will be made in accordance with the following
procedures:
(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 by noon of
the next business day following receipt of the subscription documents
and the check.
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(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 100 Shares is required. Except as otherwise
indicated in the Prospectus, additional investments may be made in cash in
minimal increments of at least 2.5 Shares. The Shares are nonassessable. The
Dealer hereby agrees to place any order for the full purchase price.
IV. Dealers' Commissions
Except for discounts described in or as otherwise provided in the "Plan of
Distribution" Section of the Prospectus, the Dealer's selling commission
applicable to the total public offering price of Shares sold by Dealer which it
is authorized to sell hereunder is 7% of the gross proceeds of Shares sold by it
and accepted and confirmed by the Company, which commission will be paid by the
Dealer Manager. For these purposes, a "sale of Shares" shall occur if and only
if a transaction has closed with a securities purchaser pursuant to all
applicable offering and subscription documents and the Company has thereafter
distributed the commission to the Dealer Manager in connection with such
transaction. The Dealer hereby waives any and all rights to receive payment of
commissions due until such time as the Dealer Manager is in receipt of the
commission from the Company. The Dealer affirms that the Dealer Manager's
liability for commissions payable is limited solely to the proceeds of
commissions receivable associated therewith. In addition, as set forth in the
Prospectus, the Dealer Manager may reallow out of its dealer manager fee a
marketing fee and due diligence expense reimbursement of up to 1.5% of 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.
The Dealer Manager will assign Soliciting Dealer Warrants (as defined in the
Dealer Manager Agreement) to the Dealer as set forth in the "Plan of
Distribution" Section of the Prospectus and pursuant to the terms of the Warrant
Purchase Agreement dated February ___, 2003, in the form attached hereto as
Exhibit B (the "Warrant Purchase Agreement"). As provided in the Warrant
Purchase Agreement, a record of the assignment of such Soliciting Dealer
Warrants will be maintained by the Company in book-entry form only (until such
time as the Company begins issuing certificates evidencing its Soliciting Dealer
Warrants, which shall be no later than such time as the Company begins issuing
certificates for its Shares) on a quarterly basis commencing 60 days after the
date on which Shares are first sold pursuant to the Offering.
Dealer acknowledges and agrees that no commissions, payments or amount
whatsoever will be paid to the Dealer unless or until the gross proceeds of the
Shares sold are disbursed to the Company pursuant to paragraph 3(a) of the
Escrow Agreement. Until the Required Capital or the Pennsylvania/Nebraska
Required Capital, as applicable and as defined in the Escrow Agreement, is
obtained, investments will be held in escrow and, if the Required Capital or
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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 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
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amount to Dealer, Dealer agrees to pay Dealer's proportionate share of any
claim, demand or liability asserted against Dealer and the other Dealers on the
basis that Dealers or any of them constitute an association, unincorporated
business or other separate entity, including in each case Dealer's proportionate
share of any expenses incurred in defending against any such claim, demand or
liability.
VIII. License and Association Membership
Dealer's acceptance of this Agreement constitutes a representation to the
Company and the Dealer Manager that Dealer is a properly registered or licensed
broker-dealer, duly authorized to sell Shares under Federal and state securities
laws and regulations and in all states where it offers or sells Shares, and that
it is a member in good standing of the NASD. This Agreement shall automatically
terminate if the Dealer ceases to be a member in good standing of such
association, or in the case of a foreign dealer, so to conform. Dealer agrees to
notify the Dealer Manager immediately if Dealer ceases to be a member in good
standing, or in the case of a foreign dealer, so to conform. The Dealer Manager
also hereby agrees to comply with the Conduct Rules of the NASD, including but
not limited to Rules 2730, 2740, 2420 and 2750.
IX. Anti-Money Laundering Compliance Programs
Dealer represents to the Company and the Dealer Manager that Dealer has
established and implemented anti-money laundering compliance programs in
accordance with applicable law, including applicable NASD rules, SEC rules and
the USA PATRIOT Act of 2001, reasonably expected to detect and cause the
reporting of suspicious transactions in connection with the sale of Shares of
the Company.
X. Limitation of Offer
Dealer will offer Shares only to persons who meet the financial qualifications
set forth in the Prospectus or in any suitability letter or memorandum sent to
it by the Company or the Dealer Manager and will only make offers to persons in
the states in which it is advised in writing that the Shares are qualified for
sale or that such qualification is not required. In offering Shares, Dealer will
comply with the provisions of the NASD Conduct Rules set forth in the NASD
Manual, as well as all other applicable rules and regulations relating to
suitability of investors, including without limitation, the provisions of
Article III.C. of the Statement of Policy Regarding Real Estate Investment
Trusts of the North American Securities Administrators Association, Inc.
XI. Termination
Dealer will suspend or terminate its offer and sale of Shares upon the request
of the Company or the Dealer Manager at any time and will resume its offer and
sale of Shares hereunder upon subsequent request of the Company or the Dealer
Manager. Any party may terminate this Agreement by written notice. Such
termination shall be effective 48 hours after the mailing of such notice. This
Agreement is the entire agreement of the parties and supersedes all prior
agreements, if any, between the parties hereto.
This Agreement may be amended at any time by the Dealer Manager by written
notice to the Dealer, and any such amendment shall be deemed accepted by Dealer
upon placing an order for sale of Shares after he has received such notice.
XII. Privacy Laws
The Dealer Manager and Dealer (each referred to individually in this section as
"party") agree as follows:
(a) Each party agrees to abide by and comply with (i) the privacy standards and
requirements of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 ("GLB Act"), (ii) the privacy
standards and requirements of any other applicable Federal or state law, and
(iii) its own internal privacy policies and procedures, each as may be amended
from time to time.
(b) Each party agrees to refrain from the use or disclosure of nonpublic
personal information (as defined under
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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 0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, and to
Dealer when mailed to the address specified by Dealer herein.
XIV. Attorneys' Fees, Applicable Law and Venue
In any action to enforce the provisions of this Agreement or to secure damages
for its breach, the prevailing party shall recover its costs and reasonable
attorney's fees. This Agreement shall be construed under the laws of the State
of Texas and shall take effect when signed by Dealer and countersigned by the
Dealer Manager. Venue for any action (including arbitration) brought hereunder
shall lie exclusively in Dallas, Texas.
[SIGNATURES ON FOLLOWING PAGES]
-14-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on its behalf by its duly authorized agent.
THE DEALER MANAGER:
BEHRINGER SECURITIES LP
By: HARVARD PROPERTY TRUST, LLC
General Partner
By:
-----------------------
Xxxxxx X. Xxxxxxx III,
Chief Operating Officer
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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.:
------------------------------------------------------------------
-16-
AGREED TO AND ACCEPTED BY THE DEALER:
---------------------------------------
(Dealer's Firm Name)
By:
------------------------------------
Signature
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT B
BEHRINGER HARVARD REIT I, INC.
SELECTED INVESTMENT ADVISOR AGREEMENT
THIS SELECTED INVESTMENT ADVISOR AGREEMENT (the "Agreement") is made and entered
into as of the day indicated on Exhibit A attached hereto and by this reference
incorporated herein, between Behringer Harvard REIT I, Inc., a Maryland
corporation (the "Company"), and the selected investment advisor (the
"Investment Advisor") identified in Exhibit A hereto.
WHEREAS, the Company is offering up to 88,000,000 shares of its common stock
(the "Shares") to the general public, pursuant to a public offering (the
"Offering") of the Shares pursuant to a prospectus (the "Prospectus") filed with
the Securities and Exchange Commission (the "SEC"), 8,000,000 of which Shares
are being offered pursuant to the Company's dividend reinvestment plan (the
"DRIP"); and
WHEREAS, the Investment Advisor is an entity, as designated in Exhibit A hereto,
organized and presently in good standing in the state or states designated in
Exhibit A hereto, presently registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and presently registered or
licensed as an investment advisor by the appropriate regulatory agency of each
state in which the Investment Advisor has clients, or exempt from such
registration requirements; and
WHEREAS, the Company has a currently effective registration statement on Form
S-11, including a final prospectus, for the registration of the Shares under the
Securities Act of 1933, as amended (such registration statement, as it may be
amended, and the prospectus and exhibits on file with the SEC, as well as any
post-effective amendments or supplements to such registration statement or
prospectus after the effective date of registration, being herein respectively
referred to as the "Registration Statement" and the "Prospectus"); and
WHEREAS, the offer and sale of the Shares shall be made pursuant to the terms
and conditions of the Registration Statement and the Prospectus and, further,
pursuant to the terms and conditions of all applicable federal securities laws
and the applicable securities laws of all states in which the Shares are offered
and sold; and
WHEREAS, the Company desires to give the clients of the Investment Advisor the
opportunity to purchase the Shares, and the Investment Advisor is willing and
desires to provide its clients with information concerning the Shares and the
procedures for subscribing for the Shares upon the following terms and
conditions;
NOW, THEREFORE, in consideration of the premises and terms and conditions
thereof, it is agreed between the Company and the Investment Advisor as follows.
1. Purchase of Shares.
1.1 Subject to the terms and conditions herein set forth, the Company hereby
makes available for purchase by the clients of the Investment Advisor a portion
of the Shares described in the Registration Statement. The Investment Advisor
hereby covenants, warrants and agrees that, in regard to any purchase of the
Shares by its clients, it will comply with all of the terms and conditions of
the Registration Statement and the Prospectus, all applicable state and federal
laws, including the Securities Act of 1933, as amended, the Investment Advisers
Act of 1940, as amended, and any and all regulations and rules pertaining
thereto, heretofore or hereafter issued by the SEC. Neither the Investment
Advisor nor any other person shall have any authority to give any information or
make any representations in connection with the Shares other than as contained
in the Registration Statement and Prospectus, as amended and supplemented, and
as is otherwise expressly authorized in writing by the Company.
1.2 Clients of the Investment Advisor may, following receipt of written notice
by the Investment Advisor from the Company of the effective date of the
Registration Statement, purchase the Shares according to all such terms as are
contained in the Registration Statement and the Prospectus. The Investment
Advisor shall comply with all requirements set forth in the Registration
Statement and the Prospectus. The Investment Advisor shall use and distribute,
in connection with the Shares, only the Prospectus and, if necessary, any
separate prospectus relating solely to the DRIP, and such sales literature and
advertising materials that shall conform in all respects to any restrictions of
local law and the applicable requirements of the Securities Act of 1933, as
amended, and that has been approved in writing by the Company. The Company
reserves the right to establish such additional procedures as it may deem
necessary to ensure compliance with the requirements of the Registration
Statement, and the Investment Advisor shall comply with all such additional
procedures to the extent that it has received written notice thereof.
1.3 All monies received for purchase of any of the Shares shall be forwarded by
the Investment Advisor to Behringer Securities LP for delivery to Xxxxx Fargo
Bank Iowa, N.A. (the "Escrow Agent"), where such monies will be deposited in an
escrow account established by the Company solely for such subscriptions. The
Investment Advisor shall return any check not made payable "Xxxxx Fargo Bank
Iowa, Behringer Harvard REIT I, Inc." directly to the subscriber who submitted
the check. Subscriptions will be executed as described in the Registration
Statement or as directed by the Company. Each Investment Advisor receiving a
subscriber's check will deliver such check to Behringer Securities LP no later
than the close of business of the first business day after receipt of the
subscription documents by the Investment Advisor.
1.4 During the term of this Agreement, the Company shall have full authority to
take such action as it may deem advisable in respect to all matters pertaining
to the performance of the Investment Advisor under this Agreement.
1.5 The Shares may be purchased by clients of the Investment Advisor only where
the Shares may be legally offered and sold, only by such persons in such states
who shall be legally qualified to purchase the Shares, and only by such persons
in such states in which the Investment Advisor is registered as an investment
advisor or exempt from any applicable registration requirements.
1.6 The Investment Advisor shall have no obligation under this Agreement to
advise its clients to purchase any of the Shares.
1.7 The Investment Advisor will use every reasonable effort to assure that
Shares are purchased only by investors who:
(a) meet the investor suitability standards, including the minimum
income and net worth standards established by the Company and set
forth in the Prospectus, and minimum purchase requirements set
forth in the Registration Statement;
(b) can reasonably benefit from an investment in the Company based on
each prospective investor's overall investment objectives and
portfolio structure;
(c) are able to bear the economic risk of the investment based on each
prospective investor's overall financial situation; and
(d) have apparent understanding of: (i) the fundamental risks of the
investment; (ii) the risk that the prospective investor may lose
the entire investment; (iii) the lack of liquidity of the Shares;
(iv) the restrictions on transferability of the Shares; (v) the
background and qualifications of the employees and agents of
Behringer Advisors LP, the advisor to the Company; and (vi) the
tax consequences of an investment in the Shares.
2
1.8 The Investment Advisor will make the determinations required to be made by
it pursuant to Section 1.7 hereof based on information it has obtained from each
prospective investor, including, at a minimum, but not limited to, the
prospective investor's age, investment objectives, investment experience,
income, net worth, financial situation and other investments of the prospective
investor, as well as any other pertinent factors deemed by the Investment
Advisor to be relevant.
1.9 In addition to complying with the provisions of Section 1.8 above, and not
in limitation of any other obligations of the Investment Advisor to determine
suitability imposed by state or federal law, the Investment Advisor agrees that
it will comply fully with the following provisions:
(a) The Investment Advisor shall have reasonable grounds to believe,
based upon information provided by the investor concerning his or
her investment objectives, other investments, financial situation
and needs, and upon any other information known by the Investment
Advisor, that (i) each client of the Investment Advisor that
purchases Shares is or will be in a financial position appropriate
to enable him or her to realize to a significant extent the
benefits (including tax benefits) of an investment in the Shares,
(ii) each client of the Investment Advisor that purchases Shares
has a fair market net worth sufficient to sustain the risks
inherent in an investment in the Shares (including potential loss
and lack of liquidity), and (iii) the Shares otherwise are or will
be a suitable investment for each client of the Investment Advisor
that purchases Shares, and the Investment Advisor shall maintain
files disclosing the basis upon which the determination of
suitability was made;
(b) The Investment Advisor shall not execute any transaction involving
the purchase of Shares in a discretionary account without prior
written approval of the transactions by the investor;
(c) The Investment Advisor shall have reasonable grounds to believe,
based upon the information made available to it, that all material
facts are adequately and accurately disclosed in the Registration
Statement and provide a basis for evaluating the Shares;
(d) In making the determination set forth in subparagraph (a) above,
the Investment Advisor shall evaluate items of compensation,
physical properties, tax aspects, financial stability and
experience of the Company's sponsor, conflicts of interest and
risk factors, appraisals, as well as any other information deemed
pertinent by it;
(e) The Investment Advisor shall inform each prospective investor of
all pertinent facts relating to the liquidity and marketability of
the Shares.
1.10 The Investment Advisor agrees to retain in its files, for a period of at
least six years, information that will establish that each purchaser of Shares
falls within the permitted class of investors.
1.11 The Investment Advisor either (i) shall not purchase shares for its own
account or (ii) shall hold for investment any Shares purchased for its own
account.
1.12 The Investment Advisor hereby confirms that it is familiar with Securities
Act Release No. 4968 and Rule 15c2-8 under the Securities Exchange Act of 1934,
as amended, relating to the distribution of preliminary and final prospectuses,
and confirms that it has complied and will comply therewith.
1.13 The Investment Advisor shall deliver a copy of Section 260.141.11 of the
California Corporate Securities Law of 1968 to each client of the Investment
Advisor that purchases Shares and resides in California.
1.14 A sale of Shares shall be deemed to be completed only after the Company
receives a properly completed subscription agreement for Shares from the
Investment Advisor evidencing the fact that the investor had received a
3
final Prospectus at least five full business days prior to the completion date,
together with payment of the full purchase price of each purchased Share from a
buyer who satisfies each of the terms and conditions of the Registration
Statement and Prospectus, and only after such subscription agreement has been
accepted in writing by the Company.
1.15 Clients of an Investment Advisor who have been advised by such Investment
Advisor on an ongoing basis regarding investments other than in the Company, and
who are not being charged by such Investment Advisor, through the payment of
commissions or otherwise, direct transaction based fees in connection with the
purchase of the Shares, may reduce the amount of selling commissions payable
with respect to the purchase of their shares down to zero.
1.16 If requested by the Company, the Investment Advisor shall 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.
2. Compensation to Investment Advisor.
The Company shall pay no fees, commissions or other compensation to the
Investment Advisor.
3. Association of the Company with Other Advisors and Dealers.
It is expressly understood between the Company and the Investment Advisor that
the Company may cooperate with broker-dealers who are registered as
broker-dealers with the National Association of Securities Dealers, Inc. (the
"NASD") or with other investment advisors registered under the Investment
Advisers Act of 1940, as amended. Such broker-dealers and investment advisors
may enter into agreements with the Company on terms and conditions identical or
similar to this Agreement and shall receive such rates of commission or other
fees as are agreed to between the Company and the respective broker-dealers and
investment advisors and as are in accordance with the terms of the Registration
Statement.
4. Conditions of the Investment Advisor's Obligations.
The Investment Advisor's obligations hereunder are subject, during the full term
of this Agreement and the Offering, to (a) the performance by the Company of its
obligations hereunder and compliance by the Company with the covenants set forth
in Section 7 hereof; and (b) the conditions that: (i) the Registration Statement
shall become and remain effective; and (ii) no stop order shall have been issued
suspending the effectiveness of the Offering.
5. Conditions to the Company's Obligations.
The obligations of the Company hereunder are subject, during the full term of
this Agreement and the Offering, to the conditions that: (a) at the effective
date of the Registration Statement and thereafter during the term of this
Agreement while any Shares remain unsold, the Registration Statement shall
remain in full force and effect authorizing the offer and sale of the Shares;
(b) no stop order suspending the effectiveness of the Offering or other order
restraining the offer or sale of the Shares shall have been issued nor
proceedings therefor initiated or threatened by any state regulatory agency or
the SEC; and (c) the Investment Advisor shall have satisfactorily performed all
of its obligations hereunder and complied with the covenants set forth in
Section 6 hereof.
6. Covenants of the Investment Advisor.
The Investment Advisor covenants, warrants and represents, during the full term
of this Agreement, that:
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6.1 The Investment Advisor is, and shall remain, registered as an investment
advisor under the Investment Advisers Act of 1940, as amended, and registered or
licensed as an investment advisor by the appropriate regulatory agency of each
state in which the advisor has clients, or is exempt from such registration
requirements.
6.2 Neither the Investment Advisor nor any person associated with the Investment
Advisor is registered, or is required to be registered, as a broker-dealer or
registered representative with the SEC, NASD self-regulatory organization, or
state securities commission.
6.3 The Investment Advisor shall comply with all applicable federal and state
securities laws, including, without limitation, the disclosure and compensation
requirements of the Investment Advisers Act of 1940, as amended, and the
provisions thereof requiring disclosure of the existence of this Agreement and
the compensation to be paid to the Investment Advisor hereunder.
6.4 The Investment Advisor shall maintain the records required by Section 204 of
the Investment Advisers Act of 1940, as amended, and Rule 204-2 thereunder in
the form and for the periods required thereby.
6.5 Investment Advisor represents to the Company that Investment Advisor has
established and implemented anti-money laundering compliance programs in
accordance with applicable law, including applicable 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.
7. Covenants of the Company.
The Company covenants, warrants and represents, during the full term of this
Agreement, that:
7.1 It shall use its best efforts to maintain the effectiveness of the
Registration Statement and to file such applications or amendments to the
Registration Statement as may be reasonably necessary for that purpose.
7.2 It shall inform the Investment Advisor whenever and as soon as it receives
or learns of any order issued by the SEC, any state regulatory agency or any
other regulatory agency which suspends the effectiveness of the Registration
Statement or prevents the use of the Prospectus or which otherwise prevents or
suspends the offering or sale of the Shares, or receives notice of any
proceedings regarding any such order.
7.3 It shall use its best efforts to prevent the issuance of any order described
herein at Section 7.2 hereof and to obtain the lifting of any such order if
issued.
7.4 It shall give the Investment Advisor written notice when the Registration
Statement becomes effective and shall deliver to the Investment Advisor such
number of copies of the Prospectus, and any supplements and amendments thereto,
which are finally approved by the SEC, as the Investment Advisor may reasonably
request for sale of the Shares.
7.5 It shall promptly notify the Investment Advisor of any post-effective
amendments or supplements to the Registration Statement or Prospectus, and shall
furnish the Investment Advisor with copies of any revised Prospectus and/or
supplements and amendments to the Prospectus and/or any prospectus relating
solely to the DRIP.
7.6 It shall keep the Investment Advisor fully informed of any material
development to which the Company is a party or which concerns the business and
condition of the Company.
7.7 It shall use its best efforts to cause, at or prior to the time the
Registration Statement becomes effective, the qualification of the Shares for
offering and sale under the securities laws of such states as the Company shall
elect.
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8. Privacy Laws.
The Company and the Investment Advisor (each referred to individually in this
section as "party") agree as follows:
8.1 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;
8.2 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
8.3 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.
9. Payment of Costs and Expenses.
The Investment Advisor shall pay all costs and expenses incident to the
performance of its obligations under this Agreement.
10. Indemnification.
10.1 The Investment Advisor agrees to indemnify, defend and hold harmless the
Company, its affiliates and their or its officers, directors, trustees,
employees and agents, against all losses, claims, demands, liabilities and
expenses, joint or several, including reasonable legal and other expenses
incurred in defending such claims or liabilities, whether or not resulting in
any liability to the Company, its affiliates and their or its officers,
directors, trustees, employees or agents, which they or any of them may incur
arising out of (i) the offer or sale (as such term is defined in the Securities
Act of 1933, as amended) by the Investment Advisor, or any person acting on its
behalf, of any Shares pursuant to this Agreement, if such loss, claim, demand,
liability, or expense arises out of or is based upon an untrue statement or
alleged untrue statement of a material fact, or any omission or alleged omission
of a material fact, other than a statement, omission, or alleged omission by the
Investment Advisor which is also, as the case may be, contained in or omitted
from the Prospectus or the Registration Statement and which statement or
omission was not based on information supplied to the Company by such Investment
Advisor; (ii) the breach by the Investment Advisor, or any person acting on its
behalf, of any of the terms and conditions of this Agreement; or (iii) the
negligence, malpractice or malfeasance of the Investment Advisor. This indemnity
provision shall survive the termination of this Agreement.
10.2 The Company agrees to indemnify, defend and hold harmless the Investment
Advisor, its officers, directors, employees and agents, against all losses,
claims, demands, liabilities and expenses, including reasonable legal and other
expenses incurred in defending such claims or liabilities, which they or any of
them may incur, including, but not limited to, alleged violations of the
Securities Act of 1933, as amended, but only to the extent that such losses,
claims, demands, liabilities and expenses shall arise out of or be based upon
(i) any untrue statement of a material fact contained in the Prospectus or the
Registration Statement, as filed and in effect with the SEC, or in any amendment
or supplement thereto, or in any application prepared or approved in writing by
counsel to the Company and filed with any state regulatory agency in order to
register or qualify the Shares under the securities laws thereof (the "Blue Sky
applications"), or (ii) any omission or alleged omission to state therein a
6
material fact required to be stated in the Prospectus or the Registration
Statement or the Blue Sky applications, or necessary to make such statements,
and any part thereof, not misleading; provided, that any such untrue statement,
omission or alleged omission is not based on information included in any such
document which was supplied to the Company, or any officer of the Company by
such Investment Advisor; provided, further, in each case that such claims or
liabilities did not arise from Investment Advisor's own negligence, malpractice
or malfeasance. This indemnity provision shall survive the termination of this
Agreement.
10.3 No indemnifying party shall be liable under the indemnity provisions
contained in Sections 10.1 and 10.2 above unless the party to be indemnified
shall have notified such indemnifying party in writing promptly after the
summons or other first legal process giving information of the nature of the
claim served upon the party to be indemnified, but failure to notify an
indemnifying party of any such claim shall not relieve it from any liabilities
that it may have to the indemnified party against whom action is brought other
than on account of its indemnity agreement contained in Sections 10.1 and 10.2
above. In the case of any such claim, if the party to be indemnified notified
the indemnifying party of the commencement thereof as aforesaid, the
indemnifying party shall be entitled to participate at its own expense in the
defense of such claim. If it so elects, in accordance with arrangements
satisfactory to any other indemnifying party or parties similarly notified, the
indemnifying party has the option to assume the entire defense of the claim,
with counsel who shall be satisfactory to such indemnified party and all other
indemnified parties who are defendants in such action; and after notice from the
indemnifying party of its election so to assume the defense thereof and the
retaining of such counsel by the indemnifying party, the indemnifying party
shall not be liable to such indemnified party under Sections 10.1 and 10.2 above
for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof, other than for the reasonable costs of
investigation.
11. Term of Agreement.
This Agreement shall become effective on the date on which this Agreement is
executed by the Company and the Investment Advisor. The Investment Advisor and
the Company may each prevent this Agreement from becoming effective, without
liability to the other, by written notice before the time this Agreement
otherwise would become effective. After this Agreement becomes effective, either
party may terminate it at any time for any reason by giving thirty (30) days'
written notice to the other party; provided, however, that this Agreement shall
in any event automatically terminate at the first occurrence of any of the
following events: (a) the Registration Statement for offer and sale of the
Shares shall cease to be effective; (b) the Offering shall be terminated; or (c)
the Investment Advisor's license or registration to act as an investment advisor
shall be revoked or suspended by any federal, self-regulatory or state agency
and such revocation or suspension is not cured within ten (10) days from the
date of such occurrence. In any event, this Agreement shall be deemed suspended
during any period for which such license is revoked or suspended.
12. Survival of Provisions.
The respective representations and warranties of the Company and the Investment
Advisor set forth in this Agreement and the covenants set forth in Section 10
hereof shall remain in full force and effect regardless of (a) any termination
of this Agreement, (b) any investigation made by or on behalf of the Investment
Advisor or any authorized representative of or person controlling the Investment
Advisor, and (c) the acceptance of any payment for the Shares.
13. Notices.
All notices and communications hereunder shall be in writing and shall be deemed
to have been given and delivered when deposited in the United States mail,
postage prepaid, registered or certified mail, to the applicable address set
forth below.
7
If sent to the Company:
BEHRINGER HARVARD REIT I, INC.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chief Operating Officer
If sent to the Investment Advisor: to the person whose name and address are
identified in Exhibit A hereto.
14. Successors.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and shall not be assigned or transferred by the Investment Advisor by
operation of law or otherwise.
15. Miscellaneous.
15.1 This Agreement shall be construed in accordance with the applicable laws of
the State of Texas. Venue for any action (including arbitration) brought
hereunder shall lie exclusively in Dallas, Texas.
15.2 Nothing in this Agreement shall constitute the Investment Advisor as in
association with or in partnership with the Company.
15.3 This Agreement, including Exhibit A hereto, embodies the entire
understanding, between the parties to the Agreement, and no variation,
modification or amendment to this Agreement shall be deemed valid or effective
unless it is in writing and signed by both parties hereto.
15.4 If any provision of this Agreement shall be deemed void, invalid or
ineffective for any reason, the remainder of the Agreement shall remain in full
force and effect.
15.5 This Agreement may be executed in counterpart copies, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument comprising this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year indicated on Exhibit A hereto.
SELECTED INVESTMENT ADVISOR: COMPANY:
BEHRINGER HARVARD REIT I, INC.
-----------------------------------
(Name of Investment Advisor)
By: By:
------------------------------- -----------------------------------
Print Name: Print Name:
------------------ ----------------------
Title: Title:
----------------------- ---------------------------
----------------------------------- ---------------------------------------
Witness Witness
8
EXHIBIT A
TO
SELECTED INVESTMENT ADVISOR AGREEMENT
OF
BEHRINGER HARVARD REIT I, INC.
This Exhibit A is attached to and made a part of that certain Selected
Investment Advisor Agreement, dated as of the ___ day of ____________________,
200_, by and between Behringer Harvard REIT I, Inc., (the "Company") and
____________________________ (the "Advisor").
1. Date of Agreement: ____________________, 200__
2. Identity of Advisor:
Name:
_____________________________________________________________________
Type of Entity:
___________________________________________________________
State Organized in:
_______________________________________________________
Qualified to Do Business and in Good Standing in:
_________________________
Registered as an Investment Advisor in the Following States:
______________
_________________________________________________
3. Name and Address for Notice Purposes:
Name:
_____________________________________________________________________
Title:
____________________________________________________________________
Company:
__________________________________________________________________
Address:
__________________________________________________________________
City, State and Zip Code:
_________________________________________________
Telephone Number (including area code):
___________________________________
4. Please complete the following for our records:
(a) How many registered investment advisors are with your firm?
__________________________________________________________________
(Please enclose a current list.)
(b) Does your firm publish a newsletter? [ ] Yes [ ] No
What is/are the frequency of the publication(s)? [ ] Weekly
[ ] Monthly [ ] Quarterly
[ ] Bi-weekly [ ] Bi-monthly[ ]
Other (please specify)
____________________________________________
PLEASE PLACE BEHRINGER HARVARD REIT I, INC. ON YOUR MAILING LIST
AND PROVIDE A SAMPLE OF THE PUBLICATION IF AVAILABLE.
9
(c) Does your firm have regular internal mailings, or bulk package
mailings to its registered investment advisors? [ ] Yes [ ] No
PLEASE PLACE BEHRINGER HARVARD REIT I, INC. ON YOUR MAILING LIST
AND PROVIDE A SAMPLE OF THE PUBLICATION IF AVAILABLE.
(d) Does your firm have a computerized electronic mail (E-Mail) system
for your registered investment advisors? [ ] Yes [ ] No
If so, please provide e-mail address:
_______________________________
(e) Website address:
____________________________________________________
Person responsible:
_________________________________________________
10
