Document:

f8k07110ex10i_goldamerican.htm

Exhibit 10.1

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED  (THE “ACT”) OR ANY OTHER APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION, AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT INCLUDING BUT NOT LIMITED TO REGULATION S PROMULGATED UNDER THE ACT. THESE SECURITIES CANNOT BE TRANSFERRED, OFFERED, OR SOLD IN THE UNITED STATES OR TO A “U.S. PERSON” (AS THAT TERM IS DEFINED IN REGULATION S PROMULGATED UNDER THE ACT) UNLESS SUCH SECURITIES ARE REGISTERED UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY AND ITS COUNSEL.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

	
SUBSCRIPTION AGREEMENT

	
FOR

GOLD AMERICAN MINING CORP.,

a Nevada corporation

This subscription agreement (this “Subscription Agreement”) is entered into by and between Gold American Mining Corp., a Nevada corporation (the “Company”), and the person or entity executing the Subscription Agreement (the “Subscriber”).  In this Subscription Agreement, the pronoun “it” means “he,” “she,” or “it,” as appropriate.  All terms not otherwise defined herein shall have the original meaning as defined in that certain Equity Issuance Agreement dated May 7, 2010 between the Company and Subscriber (the “Equity Issuance Agreement”). This Subscription Agreement is intended to be read in conjunction with the Company’s quarterly and annual reports and any definitive proxy statements (collectively, the “Reports”) filed with the Securities and Exchange Commission (“SEC”).  All of the Company’s SEC filings, including the Reports, may be reviewed and accessed via the SEC’s website at http://www.sec.gov.  (As used herein, Subscription Agreement, Shares Issuance Agreement and Reports shall collectively be referred to as the “Disclosure Documents”).

1.           Offering.  The Company is offering for sale to the Subscriber, and the Subscriber is offering to purchase from the Company, Units at the Unit Price determined to be $___ per Unit on the date hereof (the “Offering”), subject to the terms, conditions, acknowledgements, representations, and warranties stated herein and in the Equity Issuance Agreement.  Each Unit consists of one (1) share of common stock of the Company (“Share”) and one-half (1/2) of a share purchase warrant, such that the Subscriber must purchase two (2) Units to obtain a whole warrant (each a “Warrant”).  Each Warrant is exercisable for a period of two (2) years at an exercise price equal to 150% of the Unit Price on the date hereof, or  $___ per Share.

2.           Subscription.  The Subscriber hereby irrevocably subscribes to purchase from the Company the number of Units and at the aggregate purchase price (the “Purchase Price”) set forth on the execution page to this Subscription Agreement titled “SUBSCRIPTION AGREEMENT SIGNATURE PAGE.”

3.           Purchase.  The Subscriber shall have tendered and delivered an Advance to the Company in the amount representing the Purchase Price set forth on the Subscription Agreement Signature Page, along with the execution and delivery of this Subscription Agreement.

 

  

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4.           Acceptance or Rejection of Subscription.  The Subscriber understands and agrees that the Company reserves the right, in its sole discretion, to reject this subscription, in whole or in part if the Subscriber (a) failed to deliver the Advance as payment of the Purchase Price, (b) failed to deliver a completed Subscription Agreement, or (c) constitutes a “U.S. Person” as such term is defined in Rule 902(k) of Regulation S under the Securities Act of 1933, as amended (the “Act”), until there has been notice of acceptance of the Subscriber’s subscription.  In the event of rejection of this subscription, the Company and Subscriber shall take all actions deemed necessary or advisable to remedy such disqualifying matter causing rejection of the subscription.  Upon acceptance of the subscription by the Company, the Company will deliver to the Subscriber an “accepted” Subscription Agreement, and cause the Units to be promptly issued to the Subscriber.

5.           Subscriber’s Representations, Warranties, Covenants.  The Subscriber hereby represents, warrants and covenants to the Company as follows, realizing that the Company intends to rely on these representations, warranties, and covenants, which shall survive the acceptance of the Subscriber’s subscription by the Company:

5.1           Purchase For Own Account.  The Subscriber (a) is purchasing the Units, or Shares underlying the Warrants (the Units, Shares, Warrants and Shares underlying the Warrants are collectively referred to hereafter as the “Securities”) for its own benefit and account (not as a nominee or agent) for investment purposes only and not with an intent or view to, or for, resale, distribution or fractionalization thereof, in whole or in part, (b) has no present arrangement or intention to sell or distribute the Securities, or to grant participation in the Securities, and (c) does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person, or to any third person, with respect to any of the Securities.

5.2           Speculative Investment.  The Subscriber represents and warrants that it understands that an investment in the Securities is speculative and involves substantial risks, including the possible loss of the entire investment, and Subscriber represents and warrants that it is in a position to lose the entire amount of such investment.  In order to understand the risks involved with such investment, Subscriber represents and warrants that it has carefully read and understood the Disclosure Documents and “Risk Factors” set forth in Section 6 of this Subscription Agreement.

5.3           Independent Review.  In making the decision to invest in the Company and subscribe for Units, the Subscriber has (a) received, read and is familiar with the Subscription Agreement, Shares Issuance Agreement and Reports (b) been given access and the opportunity to ask any and all questions it had, and to receive answers from the Company or any person acting on its behalf concerning the Company, its business plan, management and current financial condition, and/or the terms and conditions of the offer and sale of the Units, and Subscriber has received complete and satisfactory answers to any such inquiries, (c) has relied solely upon the information contained within this Subscription Agreement or upon information obtained in its own investigation, and represents and warrants that neither the Company, nor any officer, employee, agent, or affiliate of the Company has made any representations other than those contained within this Subscription Agreement, (d) understands that the attorneys, accountants or other professionals who have been employed to perform services on the Company’s behalf have NOT been employed to represent the interests of the Subscriber, and understands that it should consult with and rely on its own counsel or advisors for independent legal, accounting, financial and tax advice concerning this investment in the Company, including but not limited to advice as to the legality of any resale of the Securities, tax or other consequences of such investment in the Company, and the suitability of the investment for the Subscriber, and (e) acknowledges that the Reports have been accessible and available for inspection and that the appropriate officers of the Company have been available to answer any questions concerning this investment.  The Subscriber represents and warrants it is solely responsible for its own due diligence investigation of the Company and its analysis of the merits and risks of an investment in the Company.

 

  

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5.4           Pre-existing Relationship with the Company or Sufficient Business and Financial Experience.  The Subscriber represents and warrants that: (i) it has a preexisting personal or business relationship with the Company or any of the Company’s officers, directors or controlling persons, or (ii) by reason of its business or financial experience or the business or financial experience of its professional advisors who are unaffiliated with and who are not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly, it could be reasonably assumed to have the capacity to protect its own interests in connection with the purchase of the Securities.  A “preexisting personal or business relationship” will be deemed to exist where the Subscriber has personal or business contacts with the Company, or any officer, director or controlling person of the Company, of such a nature and duration that would enable a reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of the Company or person with whom such relationship exists.

5.5           No Advertisement or General Solicitation.  The offer and sale of the Units has not been advertised through any article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or through any seminar or meeting whose attendees have been invited by any general solicitation or general advertising, and the Subscriber is not purchasing as a result of any such advertisement or solicitation.

5.6           Authority to Purchase the Units and to Execute Subscription Agreement.  The Subscriber has all the requisite power, authority and capacity to acquire and hold the Securities and to execute, deliver and comply with the terms of each of the instruments required to be executed and delivered by the Subscriber in connection with the subscription for the Units as contemplated by this Subscription Agreement, and such execution, delivery and compliance does not conflict with, or constitute a default under, any instruments governing the Subscriber, any law, regulation or order, or any agreement to which the Subscriber is a party or by which the Subscriber may be bound.  The Subscriber hereby adopts, accepts and agrees to be bound by all the terms and provisions of this Subscription Agreement, and, if this subscription is accepted in whole or in part, to perform and comply with any obligations therein imposed.

5.7           Partnership, Corporation or Trust.  If the Subscriber is a partnership, corporation or trust, the person executing this Subscription Agreement on its behalf represents and warrants that (i) it has made due inquiry to determine the truthfulness of the representations and warranties made pursuant to this Subscription Agreement, and (ii) it is duly empowered, authorized, and qualified (and if the Subscriber is a trust, by the trust agreement) to make this investment and to enter into and execute this Subscription Agreement on behalf of such entity.

5.8           Restricted Securities.  The Subscriber acknowledges that the Securities have not been registered or qualified under any federal or state securities laws in reliance upon exemptions from the registration requirements of such laws, and the Securities may not be transferred by the undersigned except in compliance with the registration requirements of such laws or pursuant to available exemptions from registration.  The offer and sale of the Securities has not been approved or disapproved by the SEC or any state regulatory authority, and any representation to the contrary is unlawful.

5.9           Legend.  The Subscriber understands and agrees that the certificate(s) or the documents representing the Securities will bear one or more restrictive legends determined by counsel to the Company to be necessary or appropriate in order to comply with United States federal or state securities law or to secure or protect any applicable exemptions from registration or qualification, including a legend in substantially the following form and the Subscriber agrees to abide by the terms thereof:

 

  

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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED  (THE “ACT”) OR ANY OTHER APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION, AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. THESE SECURITIES CANNOT BE TRANSFERRED, OFFERED, OR SOLD IN THE UNITED STATES OR TO A “U.S. PERSON” (AS THAT TERM IS DEFINED IN REGULATION S PROMULGATED UNDER THE ACT) UNLESS SUCH SECURITIES ARE REGISTERED UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE CORPORATION AND ITS COUNSEL. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

5.10           Compliance with Securities Law.  The Subscriber will not sell or otherwise transfer the Securities except as permitted under the Act and applicable United States state securities laws or an exemption therefrom, provided that the Subscriber delivers to the Company an opinion of counsel (which opinion and counsel are satisfactory to the Company) confirming the availability of such exemption upon the Company’s request.

5.11           Resale.  Subscriber may resell the Securities hereunder only pursuant to registration under the Act, or pursuant to an available exemption from registration and subject to an available exemption under Rule 144 promulgated under the Act (“Rule 144”). The Securities may be sold following six (6) months from the date Subscriber purchases the Securities so long as the Subscriber is not an “affiliate” of the Company and all the conditions set forth under Rule 144 have been satisfied.

5.12           Company’s Reliance on Information Provided.  The Subscriber understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Subscriber set forth herein to determine the applicability of such exemptions and the suitability of the Subscriber to acquire the Securities.

5.13           Not a U.S. Person.  The Subscriber represents and warrants that it is not a “U.S. person” as such term is defined in Rule 902(k) of Regulation S under the Act.  A definition of “U.S. person” includes but is not limited to the following: (i) any natural person resident of the U.S.; (ii) any partnership or corporation organized or incorporated under the laws of the U.S.; (iii) any estate of which any executor or administrator is a U.S. person; and (iv) any partnership or corporation if (1) organized or incorporated under the laws of any foreign jurisdiction, and (2) formed by a U.S. person principally for the purpose of investing in securities not registered under the Act, unless it is organized or incorporated, and owned, by accredited investors who are not natural persons, estates or trusts.  The Subscriber represents that it is a bona fide resident of, and is domiciled in, the country so designated on the signature page hereto.

5.14            No Written or Oral Representations. No person or entity, including the Company or agents of the Company, has made any written or oral representations or warranties, expressly or by implication to the Subscriber, (a) that any person will resell or repurchase the Securities, (b) that any person will refund the Purchase Price for the Units, (c) as to the future price or value of the Securities, (d) as to the appropriate or exact length of time that Subscriber will be required to hold the Securities, (e) as to the percentage of profit and/or amount or type of consideration, profit, or loss to be realized, if any, as a result of an investment in the Securities, or (f) as to the amount of distributions that the Company will make.

5.15            Subscription Rejection Right.  The Subscriber acknowledges that the Company reserves the right to reject its subscription, to accept any subscription in part only, or to prorate subscriptions, if the Subscriber (a) fails to deliver the Advance as payment of the Purchase Price, (b) fails to deliver a completed Subscription Agreement, or (c) constitutes a “U.S. Person” as such term is defined in Rule 902(k) of Regulation S under the Act.

 

  

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5.16            Subsequent Changes.  All information which the Subscriber has provided to the Company, including but not limited to all information given herein concerning itself, investor status, address, residence, financial position and knowledge and experience of financial and business matters are correct and complete as of the date of the execution of the Subscription Agreement, and that if there should be any material change in such information prior to this Subscription Agreement being accepted by the Company, the Subscriber will immediately provide the Company with such information.  The Subscriber will promptly notify the Company of any material fact or circumstance that would cause any of the foregoing representations to be untrue, incomplete, or misleading.

6.           Risk Factors.  In addition to the risks otherwise disclosed in the Reports and elsewhere in this Subscription Agreement, the Subscriber acknowledges and understands the risks involved with an investment to purchase the Units, including, but not limited to, the risks described below:

6.1           Speculative.  The Subscriber understands that an investment in the Securities is speculative and involves substantial risks, including the possible loss of the entire investment, and understands the risks and uncertainties discussed in this Subscription Agreement.

6.2           Investment Risk; No Operating History.  The Subscriber understands that the Company is currently in a development stage and has no operating history nor any history of profitability.  The Company reserves the right to obtain additional capital to develop its operations and complete its business plans.  There is no assurance that the Company can obtain additional capital to accomplish the foregoing or successfully complete its business plans.  As such, the Subscriber’s investment in the Company involves a high degree of risk which may result in a loss of all or substantially all of the Subscriber’s investment.

6.3           No Review of Fairness.  No federal or state agency has passed upon the Securities nor has made any finding, recommendation or determination as to the fairness of this investment.

6.4           No Representations Concerning Suitability.  The Company has made no representations or recommendations to the Subscriber concerning whether the purchase of the Securities is a suitable investment for it.  The Subscriber and its representative, if any, have the sole responsibility for determining whether this investment is suitable for the Subscriber.  The Company is not responsible to the Subscriber for making any such determination.

6.5           Unit Price May Fluctuate.  In accordance with the Shares Issuance Agreement, the Unit Price and the exercise price of the Warrants may fluctuate from time to time based upon market conditions and trading activity of the Company’s Common Stock.

6.6           Illiquid Investment.  The Subscriber’s investment in the Company is an illiquid investment, and the Subscriber must bear the economic risk of its investment.

6.7           The Securities Are Not Registered With The SEC Nor With Any State Securities Authorities.  The Securities will not be registered under the Act nor under any state securities laws nor the securities laws of any other country in reliance upon specific exemptions from registration under the provisions of the Act and applicable state securities laws and the laws of other countries.  The Securities issued will be deemed "restricted securities" and may not be sold, transferred or otherwise disposed of without an effective registration statement under the Act or an exemption therefrom.  As a result, the Securities may be transferred or resold only if the Securities have been registered or there is an available exemption from registration and the certificates representing the Securities will bear a legend to this effect.  The Securities are being offered in reliance upon an exemption from the registration provisions of the Act, pursuant to Regulation S promulgated thereunder.

 

  

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6.8           Dilution in Initial Equity Interest.  Any further issuance by the Company of any additional Securities of the Company will dilute any equity interest of the Subscriber.  No assurances can be given that the Company will not issue additional securities that will have the effect of diluting the equity interest of the Subscriber.

6.9           Due Diligence and Investigation.  The offer and sale of the Units is not underwritten by or being offered through investment bankers or underwriters.  There has not been an independent review of matters covered in the Subscription Agreement by any such professionals or other professionals.  Subscriber must rely solely upon its own investigation and analysis of the risks in making this investment decision.

6.10           No Established Public Trading Market.  Even though the Company’s Common Stock is traded over-the-counter by quotation on the OTC Bulletin Board under the symbol “AMNP” the Subscriber realizes there is no established public trading market for the Securities.

6.11           Penny Stock Regulations Affect the Company’s Stock Price, Which May Make it More Difficult to Sell.  Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the SEC. Penny stocks generally are equity securities with a price per share of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ Stock Market, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules.  The Securities are subject to the penny stock rules, and investors may find it more difficult to sell their securities.

7.           Indemnification.  The Subscriber agrees to indemnify and hold the Company and any person, if any, who controls the Company, within the meaning of Section 15 of the Act, and the Company’s officers, directors, agents, attorneys, and affiliates harmless from and against all damages, losses, costs and expenses, including reasonable attorneys’ fees and expenses reasonably incurred in the investigation or preparation in defense of any litigation commenced or threatened or any claim whatsoever, which they may incur by reason of the failure by the Subscriber to comply with the terms and conditions of this Subscription Agreement, or by reason of any misrepresentation or breach of any warranty or covenant made by the Subscriber herein, or in any document provided by the Subscriber to the Company in connection with the Subscriber’s investment in the Securities.  The Subscriber further agrees that the provisions of this Section shall survive (a) the sale, transfer or any attempted sale or transfer of all or a portion of the Securities, and (b) the death of the Subscriber.

 

  

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8.           Termination, Cancellation or Revocation.  The Subscriber agrees that it may not cancel, terminate, or revoke this Subscription Agreement or any agreement made by it hereunder and that this Subscription Agreement shall survive the death or disability of the Subscriber and shall be binding upon the Subscriber’s heirs, executors, administrators, successors, and assigns, who shall execute a substantially similar agreement.

9.           Modification.  Neither this Subscription Agreement nor any provisions hereof shall be modified, discharged or terminated except by an instrument in writing signed by the party against whom any modification, discharge or termination is sought.

10.           Notices.  Any notice, demand or other communication that any party hereto may be required, or may elect, to give to anyone interested hereunder shall be deemed given (a) three (3) business days after mailing if sent by registered or certified mail, return receipt requested, addressed to such address as may be given herein, (b) immediately if delivered personally at such address, including by overnight delivery service, or (c) immediately if communicated by facsimile to the person entitled to such notice, provided, however, that acknowledgment of the receipt of such facsimile notice is returned to the person giving notice, it being understood that such acknowledgment shall not be unreasonably withheld.

11.           Payment of Expenses.  Subject to the provisions of this Subscription Agreement, the Company, on the one hand, and the Subscriber, on the other hand, will pay all fees and expenses (including, without limitation, legal fees and expenses) incurred by them in connection with the transactions contemplated hereunder.

12.           Counterparts.  This Subscription Agreement may be executed through the use of separate signature pages (including by facsimile) or in any number of counterparts, and each of such counterparts shall, for all purposes, constitute one agreement binding on all the parties, notwithstanding that all parties are not signatories to the same counterpart.

13.           Binding Effect.  Except as otherwise provided herein, this Subscription Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns.  The obligation of the Subscriber and the agreements, representations, warranties and acknowledgments herein contained shall be deemed to be made by and be binding upon the Subscriber and the heirs, executors, administrators and successors of the Subscriber.

14.           Entire Agreement.  This instrument, including all appendices, exhibits and schedules attached hereto which have been incorporated by reference into this Subscription Agreement, contain the entire agreement of the parties with respect to the subject matter of this Subscription Agreement, and there are no representations, covenants or other agreements except as stated or referred to herein.

15.           Assignability.  This Subscription Agreement is not transferable or assignable by the Subscriber except as provided herein.

16.           Applicable Law.  This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of Nevada as applied to residents of that state entering into contracts wholly to be performed in that state, without regards to conflicts of laws principles.  The Subscriber hereby agrees that any suit, action, or proceeding arising out of or relating to this Subscription Agreement, any amendments or any replacements hereof, and any transactions or agreements relating hereto shall be brought in the courts of, or the Federal courts in, the State of Nevada, County of Washoe, and the Subscriber hereby irrevocably consents and submits to the jurisdiction of such courts for the purposes of any such suit, action or proceeding, and the Subscriber agrees that service of process on the Subscriber in such suit, action or proceeding may be made in the same way as is prescribed by this 

 

  

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Subscription Agreement for other notices.  The Subscriber hereby waives, and agrees not to assert against the Company or any assignee thereof, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, (a) any claim that he or she is not personally subject to the jurisdiction of the above-named courts or that his or her property is exempt or immune from setoff, execution or attachment, either prior to judgment or in execution thereof, and (b) to the extent permitted by applicable law, any claim that such suit, action or proceeding is brought in an inconvenient forum or that the venue of suit, action or proceeding is improper or that this subscription agreement or any amendments or any replacements hereof may not be enforced in or by such courts.  Venue for such actions as set forth above is intended to be inclusive.

17.           Waiver of Jury Trial.  The parties to this Subscription Agreement hereby waive any right that they may otherwise have to a trial by jury in any suit, action, or proceeding that arises out of or relates to this Subscription Agreement, any amendments to or any replacements of this Subscription Agreement, and any transactions or agreements relating to this Subscription Agreement.  The parties understand that, as a result of this waiver, the facts relating to any dispute that is covered by this waiver will be tried, if necessary, to a judge rather than to a jury.

18.           Severability.  If any provision or portion of this Subscription Agreement is held to be unenforceable or invalid for any reason, the remaining provisions and portions of this Subscription Agreement shall be unaffected by such holding.

 

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SUBSCRIPTION AGREEMENT SIGNATURE PAGE

 

In addition to the foregoing, the Subscriber hereby certifies that it (a) agrees to all the terms and conditions of this Subscription Agreement, (b) meets the suitability standards set forth in this Subscription Agreement, and (c) is a resident of the jurisdiction indicated below.

	
I.             NUMBER OF SUBSCRIBED UNITS.  Subscriber subscribes to purchase                  Units (at              per Unit) of the Company (“Units”).

 

II.            PURCHASE PRICE.  The total purchase price of the Units (the number of Units multiplied by price per Unit) is                   (the “Purchase Price”).

 

	  	  
	
III.          TYPE OF OWNERSHIP AND REQUIRED DOCUMENTS AND SIGNATURES

(please check one)

 

	  
	
oINDIVIDUAL OWNERSHIP (one signature required)

 

oJOINT TENANTS WITH RIGHTS OF SURVIVORSHIP (both or all parties must sign)

 

oCOMMUNITY PROPERTY (both husband and wife must sign)

 

oCOMMUNITY PROPERTY WITH RIGHTS OF SURVIVORSHIP (both husband and wife must sign)

 

	
oTENANTS IN COMMON (both or all parties must sign) (indicate the interest of each Subscriber)

 

oPARTNERSHIP

 

oLIMITED PARTNERSHIP (State:_______)

 

oLIMITED LIABILITY COMPANY (State:_______)

 

xCORPORATION (State:______)

 

oTRUST (Type:)

 

oOTHER (Please specify:                  )

 

 

	  
	
IV.          PURCHASER INFORMATION

 

                a. ZUG FINANCING GROUP                         

                         (Please print the exact name you desire to use for ownership.)

 

b.                                                                                                                     

                                            (Mailing address)

 

 

c.           Primary Country of Residence:                                                               

 

d.           Telephone No.:                                                     Fax No.:                                                     

 

e.           Social Security or Corporate ID Number:                                                                                               

 

	  

 

  

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V.            REGISTRATION AND DELIVERY DETAILS (if other than as set forth above).

 

	
    a)Registered Holder Custodian of securities (if different than Part IV above):

Name:   _______________________________________________

 

	
    b)Delivery details for securities certificates (if different than Part IV above):

 

Name:       ____________________________________

Address:    _______________________________

 

 

	  	  

Executed this  __day of _______________, 2010 at_____________________, ___________________.

(City)                                    (State/Country)

__________________________________                                    _____________________________________

Signature of Subscriber                                                                           Signature of Joint Subscriber

By:  ______________________________                               By:  _________________________________

Print Name and Title                                                                       Print Name and Title

\

 

 

	
********************

	
SUBSCRIPTION ACCEPTED:

 

 

 

	 	GOLD AMERICAN MINING CORP.	 
	 	a Nevada corporation	 
	 	 	 	 
	
Date:                                          , 2010

	
 

	/s/ 	 
	 	By: 	Johannes Petersen, President	 
	 	 	 	 
	 	 	 	 

10exhibit10_1.htm

Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADVISORY AGREEMENT

 

among

 

HINES REIT PROPERTIES, L.P.,

 

HINES ADVISORS LIMITED PARTNERSHIP

 

and

 

HINES REAL ESTATE INVESTMENT TRUST, INC.

 

July 1, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

 

  

TABLE OF CONTENTS

 

Page

 

ARTICLE 1 DEFINITIONS 

 

ARTICLE 2 APPOINTMENT 

 

ARTICLE 3 DUTIES OF THE ADVISOR 

3.01           Offering Services 

3.02           Acquisition Services 

3.03           Asset Management Services 

3.04           Shareholder Services 

3.05           Financing Services 

3.06           Disposition Services. 

 

ARTICLE 4 AUTHORITY OF THE ADVISOR 

4.01           General 

4.02           Powers of the Advisor 

4.03           Approval by Directors 

 

ARTICLE 5 BANK ACCOUNTS 

 

ARTICLE 6 RECORDS AND FINANCIAL STATEMENTS 

 

ARTICLE 7 LIMITATION ON ACTIVITIES 

 

ARTICLE 8 RELATIONSHIP WITH DIRECTORS AND OFFICERS 

 

ARTICLE 9 FEES 

9.01           Acquisition Fees 

9.02           Asset Management Fees 

9.03           Debt Financing Fees 

 

ARTICLE 10 EXPENSES 

10.01           General 

10.02           Reimbursement to Advisor 

10.03           Reimbursement to Company 

 

ARTICLE 11 OTHER SERVICES 

 

ARTICLE 12 RELATIONSHIP OF THE ADVISOR AND COMPANY;  OTHER ACTIVITIES OF THE ADVISOR 

12.01           Relationship 

12.02           Time Commitment 

12.03           Investment Opportunities and Allocation 

 

ARTICLE 13 THE HINES NAME 

 

ARTICLE 14 TERM AND TERMINATION OF THE AGREEMENT 

14.01           Term 

14.02           Termination by Either Party 

14.03           Termination by the Company 

14.04           Termination by the Advisor 

14.05           Payments on Termination and Survival of Certain Rights and Obligations 

14.06           Repurchase of Units 

 

ARTICLE 15 ASSIGNMENT 

 

ARTICLE 16 INDEMNIFICATION AND LIMITATION OF LIABILITY 

16.01           Indemnification by the Company 

16.02           Indemnification by the Advisor 

16.03           Advisor’s Liability 

 

ARTICLE 17 MISCELLANEOUS 

17.01           Notices 

17.02           Modification 

17.03           Severability 

17.04           Construction 

17.05           Entire Agreement 

17.06           Waiver 

17.07           Gender 

17.08           Titles Not to Affect Interpretation 

17.09           Counterparts 

  

  

 

  

ADVISORY AGREEMENT

 

This Advisory Agreement (this “Agreement”), dated as of July 1, 2010, is among Hines REIT Properties, L.P., a Delaware limited partnership, Hines Advisors Limited Partnership, a Texas limited partnership, and Hines Real Estate Investment Trust, Inc., a Maryland corporation.

 

W I T N E S S E T H

 

WHEREAS, the Company (as hereinafter defined) desires to avail itself of the knowledge, experience, sources of information, advice, assistance and certain facilities available to the Advisor (as hereinafter defined) and to have the Advisor undertake the duties and responsibilities hereinafter set forth herein on the terms set forth in this Agreement; and

 

WHEREAS, the Advisor is willing to undertake to render such services on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows:

 

ARTICLE 1

 

 

DEFINITIONS

 

The following defined terms used in this Agreement shall have the meanings specified below:

 

“Acquisition Expenses” has the meaning set forth in the Articles of Incorporation.

 

“Advisor” means (i) Hines Advisors Limited Partnership, a Texas limited partnership, or (ii) any successor advisor to the Company.

 

“Affiliate” has the meaning set forth in the Articles of Incorporation. For the purposes of this Agreement, the Advisor shall not be deemed to be an Affiliate of the Company, and vice versa.

 

“Articles of Incorporation” means the Second Amended and Restated Articles of Incorporation of the General Partner, as amended from time to time.

 

“Asset” or “Assets” means any and all real estate investments (real, personal or otherwise), tangible or intangible, owned or held by, or for the account of, the Company, whether directly or indirectly through another entity or entities, including interests in any Person or in joint ventures which directly or indirectly own real estate investments.

 

“Board of Directors” means the Board Directors of the General Partner.

 

“Bylaws” means the Amended and Restated Bylaws of the General Partner, as amended from time to time.

 

“Cash Amount” has the meaning set forth in the Limited Partnership Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time.

 

“Company” means Hines REIT Properties, L.P., a Delaware limited partnership. Within the context of discussions of the operations, business and administration of the Company, the term “Company” shall mean, collectively, Hines REIT Properties, L. P. and the General Partner for the purposes of this Agreement.

 

“Director” means a member of the Board of Directors of the General Partner.

 

“General Partner” means Hines Real Estate Investment Trust, Inc., a Maryland corporation and general partner of the Company.

 

“Gross Proceeds” has the meaning set forth in the Articles of Incorporation.

 

“Hines” means Hines Interests Limited Partnership and its Affiliates.

 

“Independent Director” has the meaning set forth in the Articles of Incorporation.

 

“Initial Asset Value” means (i) in the case of an Asset other than a loan or other financing, the gross purchase price of such Asset if it is acquired directly by the Company, including any debt attributable to such Asset or the principal amounts of any loans originated by the Company, or, if the Asset is held by entities in which the Company invests, the pro rata share of the gross asset value of the Asset, and (ii) in the case of a loan or other financing, the total amount committed under the loan or other financing.

 

“Limited Partnership Agreement” means the Amended and Restated Limited Partnership Agreement of Hines REIT Properties, L.P., as the same may be amended and restated from time to time.

 

“Managing Dealer” means Hines Real Estate Investments, Inc., a Delaware corporation, or such other entity selected by the Board of Directors to act as the managing dealer for the Offering.

 

“Offering” means a public offering of Securities pursuant to any Prospectus.

 

“Operating Expenses” has the meaning set forth in the Articles of Incorporation.

 

“Organizational and Offering Expenses” has the meaning set forth in the Articles of Incorporation.

 

“Participation Interest” has the meaning set forth in the Limited Partnership Agreement.

 

“Person” means an individual, corporation, partnership, estate, trust, a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity.

 

“Property Manager” means Hines Interests Limited Partnership, a Texas limited partnership, or an Affiliate thereof.

 

“Property Management and Leasing Agreement” means any Property Management and Leasing Agreement between the Company and the Property Manager.

 

“Prospectus” means the General Partner’s final prospectus for any public offering within the meaning of Section 2(10) of the Securities Act of 1933, as amended.

 

“REIT” means a “real estate investment trust” under Sections 856 through 860 of the Code.

 

“REIT Shares Amount” has the meaning set forth in the Limited Partnership Agreement.

 

“Securities” means any class or series of units or shares of the Company or the General Partner, including common shares and units or preferred shares and units and any other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.

 

“Shares” means shares of common stock of the General Partner, par value $.001 per share.

 

“Shareholders” means the registered holders of the outstanding Shares.

 

“Termination Date” means the date of termination of this Agreement.

 

“2%/25% Guidelines” has the meaning set forth in the Articles of Incorporation.

 

“Units” has the meaning set forth in the Limited Partnership Agreement.

 

ARTICLE 2

 

 

APPOINTMENT

 

The Company hereby appoints the Advisor to serve as its advisor on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.

 

ARTICLE 3

 

 

DUTIES OF THE ADVISOR

 

The Advisor is responsible for managing, operating, directing and supervising the operations and administration of the Company and its Assets to the fullest extent allowed by law. The Advisor shall, either directly or by engaging an Affiliate or third party, perform the following duties:

 

3.01 Offering Services

 

. The Advisor shall manage and supervise:

 

(i) development of the product offering, including the determination of the specific terms of the Securities to be offered by the General Partner and/or the Company, preparation of all offering and related documents, and obtaining all required regulatory approvals of such documents;

 

(ii) along with the Managing Dealer, approval of the participating broker dealers and negotiation of the related selling agreements;

 

(iii) preparation and approval of all marketing materials contemplated to be used by the Managing Dealer or others in the Offering of the General Partner’s Securities;

 

(iv) coordination of the due diligence process relating to participating broker dealers and their review of any Prospectus and other Offering and Company documents;

 

(v) creation and implementation of various technology and electronic communications related to the Offering of the General Partner’s Securities;

 

(vi) along with the Managing Dealer, negotiation and coordination with the transfer agent for the receipt, collection, processing and acceptance of subscription agreements, commissions, and other administrative support functions; and

 

(vii) all other services related to organization of the Company or an Offering, whether performed and incurred by the Advisor or its Affiliates.

 

3.02 Acquisition Services

 

.

 

(i) Serve as the Company’s investment and financial advisor and obtain certain relevant market research and economic and statistical data in connection with the Company’s Assets and investment objectives and policies;

 

(ii) Subject to Section 4.03 and Article 7 hereof and the investment objectives and policies of the Company: (a) locate, analyze and select potential investments; (b) structure and negotiate the terms and conditions of transactions pursuant to which investments in Assets will be made; (c) acquire Assets on behalf of the Company; and (d) arrange for financing on behalf of the Company;

 

(iii) Oversee the due diligence process;

 

(iv) Prepare reports regarding prospective investments which include recommendations and supporting documentation necessary for the Directors to evaluate the proposed investments;

 

(v) Obtain reports (which may be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of contemplated investments of the Company; and

 

(vi) Negotiate and execute approved investments, loans, debt financing and other transactions.

 

3.03 Asset Management Services

 

.

 

(i) Real Estate Services:

 

	
(a)  

	
Investigate, select, and, on behalf of the Company, engage and conduct business with such Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to consultants, accountants, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies and any and all Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services;

 

	
(b)  

	
Monitor applicable markets and obtain reports (which may be prepared by the Advisor or its Affiliates) where appropriate, concerning the value of investments of the Company;

 

	
(c)  

	
Monitor and evaluate the performance of investments of the Company; provide daily management services to the Company and perform and supervise the various management and operational functions related to the Company’s investments;

 

	
(d)  

	
Coordinate with the Property Manager on its duties under any Property Management and Leasing Agreement and assist in obtaining all necessary approvals of major property transactions as governed by the applicable Property Management and Leasing Agreement;

 

	
(e)  

	
Coordinate and manage relationships between the Company and any joint venture partners; and

 

	
(f)  

	
Consult with the officers and Directors of the General Partner and provide assistance with the evaluation and approval of potential property dispositions, sales or refinancings.

 

(ii) Accounting and Other Administrative Management Services

 

:

 

(a) Manage and perform the various administrative functions necessary for the management of the day-to-day operations of the Company;

 

(b) From time-to-time, or at any time reasonably requested by the Directors, make reports to the Directors on the Advisor’s performance of services to the Company under this Agreement;

 

(c) Coordinate with the Company’s independent accountants and auditors to prepare and deliver to the General Partner’s audit committee an annual report covering the Advisor’s compliance with certain material aspects of this Advisory Agreement;

 

(d) Provide or arrange for administrative services and items, legal and other services, office space, office furnishings, personnel and other overhead items necessary and incidental to the Company’s business and operations;

 

(e) Provide financial and operational planning services and portfolio management functions;

 

(f) Maintain accounting data and any other information requested concerning the activities of the Company as shall be required to prepare and file all periodic financial reports and returns required to be filed by the General Partner with the Securities and Exchange Commission and any other regulatory agency, including annual financial statements;

 

(g) Maintain all appropriate books and records of the Company;

 

(h) Oversee tax and compliance services and risk management services and coordinate with appropriate third parties, including independent accountants and other consultants, on related tax matters;

 

(i) Supervise the performance of such ministerial and administrative functions as may be necessary in connection with the daily operations of the Company;

 

(j) Provide the Company with all necessary cash management services;

 

(k) Manage and coordinate with the transfer agent the distribution process and payments to shareholders;

 

(l) Consult with the officers and Directors of the General Partner and assist the Directors in evaluating and obtaining adequate insurance coverage based upon risk management determinations;

 

(m) Provide the officers and Directors of the General Partner with timely updates related to the overall regulatory environment affecting the Company, as well as managing compliance with such matters, including but not limited to compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);

 

(n) Consult with the officers and Directors of the General Partner and the Board of Directors relating to the corporate governance structure and appropriate policies and procedures related thereto; and

 

(o) Oversee all reporting, record keeping, internal controls and similar matters in a manner to allow the General Partner to comply with applicable law including the Sarbanes-Oxley Act.

 

3.04 Shareholder Services

 

.

 

(i) Manage communications with shareholders, including answering phone calls, preparing and sending written and electronic reports and other communications; and

 

(ii) Establish technology infrastructure to assist in providing shareholder support and service.

 

3.05 Financing Services

 

(i) Identify and evaluate potential financing and refinancing sources, engaging a third-party broker if necessary;

 

(ii) Negotiate terms, arrange and execute financing agreements;

 

(iii) Manage relationships between the Company and its lenders; and

 

(iv) Monitor and oversee the service of the Company’s debt facilities and other financings.

 

3.06 Disposition Services.

 

(i) Consult with the Board of Directors and provide assistance with the evaluation and approval of potential Asset dispositions, sales or other liquidity events; and

 

(ii) Structure and negotiate the terms and conditions of transactions pursuant to which real estate investments may be sold.

 

ARTICLE 4

 

 

AUTHORITY OF THE ADVISOR

 

4.01 General

 

. All rights and powers to manage and control the day-to-day business and affairs of the Company shall be vested in the Advisor to the fullest extent allowed by law. The Advisor shall have the power to delegate all or any part of its rights and powers to manage and control the business and affairs of the Company to such officers, employees, Affiliates, agents and representatives of the Advisor or the Company as it may from time to time deem appropriate. Any authority delegated by the Advisor to any other Person shall be subject to applicable law and the limitations on the rights and powers of the Advisor specifically set forth in this Agreement or the Articles of Incorporation.

 

4.02 Powers of the Advisor

 

. Subject to the express limitations set forth in this Agreement, the power to direct the management, operation and policies of the Company shall to the fullest extent allowed by law be vested in the Advisor, which shall have the power by itself and shall be authorized and empowered on behalf and in the name of the Company to carry out any and all of the objectives and purposes of the Company and to perform all acts and enter into and perform all contracts and other undertakings that it may in its sole discretion deem necessary, advisable or incidental thereto to perform its obligations under this Agreement.

 

4.03 Approval by Directors

 

.

 

(i) Notwithstanding the foregoing, any investment in Assets, including any acquisition of an Asset by the Company or any investment by the Company in a joint venture, limited partnership or similar entity owning real estate investments, will require the prior approval of the Board of Directors. The Advisor will deliver to the Board of Directors all documents required by it to properly evaluate the proposed investment.

 

(ii) If the Articles of Incorporation require that a transaction be approved by the Independent Directors, the Advisor will deliver to the Independent Directors all documents required by them to properly evaluate the proposed investment in the Asset. The prior approval of a majority of the Independent Directors will be required for each transaction between the Company and the Advisor or its Affiliates.

 

ARTICLE 5

 

 

BANK ACCOUNTS

 

The Advisor will maintain one or more bank accounts in the name of the Company and will collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company. Notwithstanding the foregoing, no funds shall be commingled with the funds of the Advisor.

 

ARTICLE 6

 

 

RECORDS AND FINANCIAL STATEMENTS

 

The Advisor, in the conduct of its responsibilities to the Company, shall maintain adequate and separate books and records for the Company’s operations in accordance with United States generally accepted accounting principles (“GAAP”), which shall be supported by sufficient documentation to ascertain that such books and records are properly and accurately recorded. Such books and records shall be the property of the Company. Such books and records shall include all information necessary to calculate and audit the fees or reimbursements paid under this Agreement. The Advisor shall utilize procedures to attempt to ensure such control over accounting and financial transactions as is reasonably required to protect the Company’s assets from theft, error or fraudulent activity. All financial statements that the Advisor delivers to the Company shall be prepared on an accrual basis in accordance with GAAP, except for special financial reports which by their nature require a deviation from GAAP. The Advisor shall maintain the necessary liaison with the Company’s independent accountants and shall provide such accountants with such reports and other information as the Company shall request.

 

ARTICLE 7

 

 

LIMITATION ON ACTIVITIES

 

Notwithstanding any provision in this Agreement to the contrary, the Advisor shall not take any action which, in its sole judgment made in good faith, would (i) adversely affect the ability of the General Partner to qualify or continue to qualify to be taxed as a REIT, (ii) subject the Company or the General Partner to regulation under the Investment Company Act of 1940, as amended, (iii) violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company, the General Partner or their Securities, or (iv) violate the Articles of Incorporation or Bylaws. In the event that an action that would violate (i) through (iv) of the preceding sentence has been ordered by the Board of Directors acting on behalf of the General Partner, the Advisor shall notify the Board of Directors of the Advisor’s judgment of the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board of Directors. In such event the Advisor shall, to the fullest extent allowed by law, have no liability for acting in accordance with the specific instructions of the Board of Directors so given. Notwithstanding the foregoing, none of the Advisor, its Affiliates and none of their managers, directors, officers, employees and equityholders, shall be liable to the Company, the General Partner, the Board of Directors or the Shareholders for any act or omission by such Persons or individuals, except as provided in this Agreement. THE PARTIES HERETO INTEND THAT THE LIMITATION OF LIABILITY SET FORTH IN THIS SECTION BE CONSTRUED AND APPLIED AS WRITTEN NOTWITHSTANDING ANY RULE OF CONSTRUCTION TO THE CONTRARY. WITHOUT LIMITING THE FOREGOING, THE LIMITATION OF LIABILITY SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, APPLY NOTWITHSTANDING ANY STATE’S “EXPRESS NEGLIGENCE RULE” OR SIMILAR RULE THAT WOULD DENY COVERAGE BASED ON A PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE, GROSS NEGLIGENCE OR STRICT LIABILITY. IT IS THE INTENT OF THE PARTIES THAT, TO THE EXTENT PROVIDED IN THIS SECTION, THE LIMITATION OF LIABILITY SET FORTH HEREIN SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, APPLY TO A PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE, GROSS NEGLIGENCE OR STRICT LIABILITY. THE PARTIES AGREE THAT THIS PROVISION IS “CONSPICUOUS” FOR PURPOSES OF ALL STATE LAWS.

 

ARTICLE 8

 

 

RELATIONSHIP WITH DIRECTORS AND OFFICERS

 

Each of the Managers, Directors, officers and employees of the Advisor or any direct or indirect Affiliate of the Advisor may serve as Directors and as officers of the General Partner, except that no manager, director, officer or employee of the Advisor or any of its Affiliates who also is a Director or officer of the General Partner shall receive any compensation from the Company or General Partner for serving as a Director or officer other than reasonable reimbursement for travel and related expenses incurred in attending meetings of the Board of Directors.

 

ARTICLE 9

 

 

FEES

 

9.01 Acquisition Fees

 

. The Company shall pay the Advisor in cash as compensation for services described in Section 3.02 an acquisition fee of 0.50% of the Initial Asset Value of each investment. The Company shall also reimburse the Advisor for all expenses incurred by the Advisor in connection with such services as required by Article 10. The amount of such acquisition fees and expenses shall be subject to any limitations contained in the Articles of Incorporation. The Advisor shall submit an invoice to the Company following the closing or closings of each acquisition, accompanied by a computation of the fee. The fee shall be payable within ten business days after receipt of the invoice by the Company.

 

9.02 Asset Management Fees

 

. The Company shall pay the Advisor in cash as compensation for services described in Section 3.03 an asset management fee in accordance with this Section 9.02 as well as reimburse the Advisor for all expenses incurred by the Advisor in connection with such services as required by Article 10. Subject to any limitations contained in the Articles of Incorporation, this asset management fee shall be earned monthly and the amount of this asset management fee payable by the Company to the Advisor shall equal 0.0625% multiplied by the net equity invested in real estate investments as of the end of the applicable month. The Advisor shall submit a monthly invoice to the Company, accompanied by a computation of the asset management fee for the applicable period. The asset management fee shall be payable within ten business days after receipt of the invoice by the Company.

 

9.03 Debt Financing Fees

 

.  The Company shall pay the Advisor in cash as compensation for services described in Section 3.05 a debt financing fee equal to 1.0% of the amount obtained under any property loan or made available to us under any other debt financing. In no event will the debt financing fee be paid more than once in respect of the same debt.

 

ARTICLE 10

 

 

EXPENSES

 

10.01 General

 

. In addition to the compensation paid to the Advisor pursuant to Article 9 hereof, the Company shall pay directly or reimburse the Advisor for all of the expenses paid or incurred by the Advisor or Affiliates in connection with the services provided to the Company pursuant to this Agreement, including, but not limited to:

 

(i) all issuer costs, including expenses of the Company’s organization, actual legal, accounting, bona fide out-of-pocket itemized due diligence expenses, printing, filing fees, transfer agent costs, postage, escrow fees, data processing fees, advertising and sales literature and other Offering-related expenses; provided, however, the Company shall not reimburse the Advisor for any Organizational and Offering Expenses to the extent that such reimbursement would violate Section 9.6 of the Articles of Incorporation;

 

(ii) Acquisition Expenses incurred in connection with the selection and acquisition of Assets including such expenses incurred related to assets pursued or considered but not ultimately acquired by the Company;

 

(iii) expenses incurred in connection with obtaining debt financing for the Company;

 

(iv) the actual out-of-pocket cost of goods and services used by the Company or the General Partner and obtained from entities not Affiliated with the Advisor, including brokerage fees paid in connection with the purchase and sale of Assets;

 

(v) taxes and assessments on income or Assets and taxes as an expense of doing business and any other taxes otherwise imposed on the Company and its business or income;

 

(vi) out-of-pocket costs associated with insurance required in connection with the business of the Company or by its officers and Directors;

 

(vii) all out-of-pocket expenses in connection with payments to the Board of Directors and meetings of the Board of Directors and Shareholders;

 

(viii) personnel and related employment direct costs incurred by the Advisor or Affiliates (a) in performing the services described in Section 3.04 or (b) as otherwise approved by the Independent Directors, including but not limited to salary, benefits, burdens and overhead of all employees directly involved in the performance of such services, plus all out-of-pocket costs incurred;

 

(ix) out-of-pocket expenses of maintaining communications with Shareholders, including the cost of preparation, printing, and mailing annual reports and other Shareholder reports, proxy statements and other reports required by governmental entities;

 

(x) third-party audit, accounting and legal fees, and other fees for professional services relating to the operations of the Company and all such fees incurred at the request, or on behalf of, the Independent Directors or any committee of the Board of Directors;

 

(xi) personnel and related employment direct costs and overhead of the Advisor and its affiliates in connection with providing in-house professional services for the Company and the General Partner, including legal services, tax services, internal audit services, technology related services and services in connection with compliance with the Sarbanes-Oxley Act;

 

(xii) out-of-pocket costs for the Company to comply with all applicable laws, regulations and ordinances;

 

(xiii) expenses incurred in connection with disposition services; and

 

(xiv) all other out-of-pocket costs necessary for the operation of the Company and its Assets incurred by the Advisor in performing its duties hereunder.

 

Except as specifically provided for above in (i), (viii) and (xi) related to Organizational and Offering Expenses, shareholder services expenses, in-house professional services or as contemplated by Article 11, the expenses and payments subject to reimbursement by the Company in this Section 10.01 do not include personnel and related direct employment or overhead costs of the Advisor or Affiliates.

 

10.02 Reimbursement to Advisor

 

. Expenses incurred by the Advisor on behalf of the Company and payable pursuant to this Article 10 shall be reimbursed to the Advisor within 10 days after the Advisor provides the Company with an invoice and/or supporting documentation relating to such reimbursement.

 

10.03 Reimbursement to Company

 

. The Company shall not reimburse the Advisor during any fiscal quarter for Operating Expenses that, in the four consecutive fiscal quarters then ended (the “Expense Year”), exceed the 2%/25% Guidelines for such year (the “Excess Amount”), unless the Independent Directors determine that such excess was justified, based on unusual and non-recurring factors which they deem sufficient, in which case the Excess Amount may be reimbursed. Any Excess Amount paid to the Advisor during a fiscal quarter without the Independent Directors determining that such expenses were justified shall be repaid to the Company. Within 60 days after the end of any fiscal quarter of the Company for which total Operating Expenses for the Expense Year exceed the 2%/25% Guidelines and the Independent Directors determined that such expenses were justified, there shall be sent to the Shareholders a written disclosure of such fact, together with an explanation of the factors the Independent Directors considered in determining that such excess expenses were justified. Such determination shall be reflected in the minutes of the meetings of the Board of Directors.

 

ARTICLE 11

 

 

OTHER SERVICES

 

Should (i) the General Partner request that the Advisor or any manager, officer or employee thereof render services for the Company other than as set forth in this Agreement or (ii) there are changes to the regulatory environment in which the Advisor or Company operates that would increase significantly the level of services performed such that the costs and expenses borne by the Advisor for which the Advisor is not entitled to separate reimbursement for personnel and related employment direct costs and overhead under Article 10 of this Agreement would increase significantly, such services shall be separately compensated at such rates and in such amounts as are agreed by the Advisor and the Independent Directors, subject to the limitations contained in the Articles of Incorporation, and shall not be deemed to be services pursuant to the terms of this Agreement.

 

ARTICLE 12

 

 

RELATIONSHIP OF THE ADVISOR AND COMPANY;

 

OTHER ACTIVITIES OF THE ADVISOR

 

12.01 Relationship

 

. To the fullest extent allowed by law, the Company and the Advisor are not partners or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners or joint venturers. Nothing herein contained shall prevent the Advisor from engaging in other activities, including, without limitation, the rendering of advice to other Persons and the management of other programs advised, sponsored or organized by the Advisor or its Affiliates. Nor shall this Agreement limit or restrict the right of any manager, director, officer, employee, or equityholder of the Advisor or its Affiliates to engage in any other business or to render services of any kind to any other Person. The Advisor may, with respect to any investment in which the Company is a participant, also render advice and service to each and every other participant therein. The Advisor shall promptly disclose to the Board of Directors the existence of any condition or circumstance, existing or anticipated, of which it has knowledge, which creates or could create a conflict of interest between the Advisor’s obligations to the Company and its obligations to or its interest in any other Person.

 

12.02 Time Commitment

 

. The Advisor shall, and shall cause its Affiliates and their respective employees, officers and agents to, devote to the Company such time as shall be reasonably necessary to conduct the business and affairs of the Company in an appropriate manner consistent with the terms of this Agreement. The Company acknowledges that the Advisor and other Affiliates of Hines and their respective employees, officers and agents may also engage in activities unrelated to the Company and may provide services to Persons other than the Company or any of its Affiliates.

 

12.03 Investment Opportunities and Allocation

 

. The Advisor shall be required to use commercially reasonable efforts to present a continuing and suitable investment program to the Company which is consistent with the investment policies and objectives of the Company, but neither the Advisor nor any Affiliate of the Advisor shall be obligated generally to present any particular investment opportunity to the Company even if the opportunity is of character which, if presented to the Company, could be taken by the Company. In the event an investment opportunity is located, the allocation procedure set forth under the caption “Conflicts of Interest—Investment Opportunity Allocation Procedure” in the April 30, 2009 Prospectus (as may be amended from time to time) shall govern the allocation of the opportunity among the Company and Affiliates of the Advisor; provided, however, such allocation procedure may be revised as mutually agreed by the parties hereto from time to time.

 

ARTICLE 13

 

 

THE HINES NAME

 

The Advisor, Hines and their Affiliates have a proprietary interest in the name “Hines”. The Advisor hereby grants to the Company a non-transferable, non-assignable, non-exclusive royalty-free right and license to use the name “Hines” during the term of this Agreement. Accordingly, and in recognition of this right, if at any time the Company ceases to retain Hines or an Affiliate thereof to perform the services of the Advisor, the Company (including the General Partner) will, promptly after receipt of written request from Hines, cease to conduct business under or use the name “Hines” or any derivative thereof and the Company and the General Partner shall change the name of the Company and the General Partner to a name that does not contain the name “Hines” or any other word or words that might, in the reasonable discretion of the Advisor, be susceptible of indication of some form of relationship between the Company and the Advisor or any Affiliate thereof. At such time, the Company will also make any changes to any trademarks, servicemarks or other marks necessary to remove any references to the word “Hines”. Consistent with the foregoing, it is specifically recognized that the Advisor or one or more of its Affiliates has in the past and may in the future organize, sponsor or otherwise permit to exist other investment vehicles (including vehicles for investment in real estate) and financial and service organizations having “Hines” as a part of their name, all without the need for any consent (and without the right to object thereto) by the Company or the General Partner.

 

ARTICLE 14

 

 

TERM AND TERMINATION OF THE AGREEMENT

 

14.01 Term

 

. This Agreement shall have an initial term of one year from the date of the Agreement. This Agreement may be renewed for an unlimited number of successive one-year terms upon mutual consent of the parties. Any such renewal must be approved by a majority of the Independent Directors. The General Partner (through the Independent Directors) will evaluate the performance of the Advisor annually before renewing the Agreement, and each such renewal shall be for a term of no more than one year.

 

14.02 Termination by Either Party

 

. This Agreement may be terminated upon 60 days’ written notice without cause or penalty by either party.

 

14.03 Termination by the Company

 

. This Agreement may be terminated immediately by the Company upon (i) any fraudulent conduct, criminal conduct, willful misconduct or the negligent breach of fiduciary duty of or by the Advisor, (ii) a material breach of this Agreement by the Advisor not cured within 10 business days after the Advisor receives written notice of such breach, or (iii) an event of the bankruptcy of the Advisor or commencement of any bankruptcy or similar insolvency proceedings of the Advisor.

 

14.04 Termination by the Advisor

 

. This Agreement may be terminated immediately by the Advisor in the event of (i) the bankruptcy of the Company or commencement of any bankruptcy or similar insolvency proceedings of the Company, or (ii) any material breach of this Agreement by the Company not cured by the Company within 10 days after written notice thereof.

 

14.05 Payments on Termination and Survival of Certain Rights and Obligations

 

. Payments to the Advisor pursuant to this Section 14.05 shall be subject to the 2%/25% Guidelines to the extent applicable.

 

(i) After the Termination Date, the Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from the Company within 30 days after the effective date of such termination all unpaid reimbursements of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this Agreement.

 

(ii) The Advisor shall promptly upon termination:

 

(a)           pay over to the Company all money collected pursuant to this Agreement, if any, after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled;

 

(b)           deliver to the Directors a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Directors;

 

(c)           deliver to the Directors all assets and documents of the Company then in the custody of the Advisor; and

 

(d)           cooperate with the Company to provide an orderly transition of advisory functions.

 

Upon the expiration or termination of this Agreement, neither party shall have any further rights or obligations under this Agreement, except that Articles 13, 14, 16 and 17 shall survive the termination or expiration of this Agreement.

 

14.06 Repurchase of Units

 

.

 

In the event this Agreement expires without the consent of the Advisor, or is terminated for any reason other than by the Advisor pursuant to Section 14.02 or Section 14.04, the Company shall (to the fullest extent funds are legally available for such purpose) at the election of the Advisor or any of its Affiliates and at any time (and from time to time) after the effective date of such expiration or termination, purchase all or a portion of the Units or Participation Interest (as applicable) held by the Advisor and its Affiliates. The purchase price shall be paid in cash or, at the election of the seller, Shares, and shall be payable within 120 days after the Advisor or its Affiliates (as applicable) gives the Company written notice of its desire to sell all or a portion of the Units or Participation Interest held by such Person to the Company. The General Partner agrees to keep a sufficient number of authorized but unissued Shares available for issuance pursuant to this Section 14.06 and shall issue Shares as may be required hereunder. The purchase price of each interest in the Company pursuant to this Section 14.06 shall be (i) in the event the seller elects to receive cash, the Cash Amount the seller would receive under a redemption of such interests under Section 3.2 of the Limited Partnership Agreement assuming the Company paid cash for such redemption, or (ii) in the event the seller elects to receive Shares, the REIT Shares Amount the seller would receive under a redemption of such interests under Section 3.2 of the Limited Partnership Agreement assuming the Company paid Shares for such redemption.

 

ARTICLE 15

 

 

ASSIGNMENT

 

This Agreement may be assigned by the Advisor to an Affiliate with the consent of the General Partner by approval of a majority of the Independent Directors. The Advisor may assign any rights to receive fees or other payments under this Agreement without obtaining the approval of the Board of Directors. This Agreement shall not be assigned by the Company without the consent of the Advisor.

 

ARTICLE 16

 

 

INDEMNIFICATION AND LIMITATION OF LIABILITY

 

16.01 Indemnification by the Company

 

. The Company shall indemnify and hold harmless the Advisor and its Affiliates, including their respective managers, officers, directors, partners and employees, from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance, subject to any limitations imposed by the laws of the State of Texas, the Articles of Incorporation or Agreement of Limited Partnership of the Company, provided that: (i) the Advisor and its Affiliates have determined that the course of conduct which caused the loss or liability was in the best interests of the Company, (ii) the Advisor and its Affiliates were acting on behalf of or performing services for the Company, (iii) the indemnified claim was not the result of negligence, misconduct, or fraud of the indemnified person or resulted from a breach of the agreement by the Advisor, and (iv) in the event the loss , liability or expense arises from or out of an alleged violation of federal or state securities laws by the Advisor or its Affiliates, the conditions set forth in at least one of clauses (X), (Y) or (Z) of Section 12.2(b) of the Articles of Incorporation must be satisfied (deeming, for purposes of this Agreement, that the Advisor or its Affiliates are each an “Indemnitee” as such term is used in such clauses) for the Company to provide such indemnification. Any indemnification of the Advisor may be made only out of the net assets of the Company and not from the Shareholders.

 

16.02 Indemnification by the Advisor

 

. The Advisor shall indemnify and hold harmless the Company from contract or other liability, claims, damages, taxes or losses and related expenses, including attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and are incurred by reason of the Advisor’s bad faith, fraud, willful misconduct or reckless disregard of its duties, but the Advisor shall not be held responsible for any action of the Board of Directors in following or declining to follow any of the Advisor’s advice or recommendation. THE PARTIES HERETO INTEND THAT THE INDEMNITIES SET FORTH IN THIS AGREEMENT BE CONSTRUED AND APPLIED AS WRITTEN NOTWITHSTANDING ANY RULE OF CONSTRUCTION TO THE CONTRARY. WITHOUT LIMITING THE FOREGOING, THE INDEMNITIES SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, AND TO THE EXTENT PROVIDED IN THIS AGREEMENT, APPLY NOTWITHSTANDING ANY STATE’S “EXPRESS NEGLIGENCE RULE” OR SIMILAR RULE THAT WOULD DENY COVERAGE BASED ON AN INDEMNIFIED PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR STRICT LIABILITY OR GROSS NEGLIGENCE. IT IS THE INTENT OF THE PARTIES THAT, TO THE EXTENT PROVIDED IN THIS AGREEMENT, THE INDEMNITIES SET FORTH HEREIN SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, APPLY TO AN INDEMNIFIED PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR STRICT LIABILITY OR GROSS NEGLIGENCE. THE PARTIES AGREE THAT THIS PROVISION IS “CONSPICUOUS” FOR PURPOSES OF ALL STATE LAWS.

 

16.03 Advisor’s Liability

 

 

 

 

(i) Notwithstanding any other provisions of this Agreement, in no event shall the Company make any claim against the Advisor, or its Affiliates, on account of any good faith interpretation by the Advisor of the provisions of this Agreement (even if such interpretation is later determined to be a breach of this Agreement) or any alleged errors in judgment made in good faith and in accordance with this Agreement in connection with the operation of the operations of the Company hereunder by the Advisor or the performance of any advisory or technical services provided by or arranged by the Advisor. The provisions of this Section 16.03(i) shall not be deemed to release the Advisor from liability for its gross negligence.

 

(ii) The Company shall not object to any expenditures made by the Advisor in good faith in the course of its performance of its obligations under this Agreement or in settlement of any claim arising out of the operation of the Company unless such expenditure is specifically prohibited by this Agreement. The provisions of this Section 16.03(ii) shall not be deemed to release the Advisor from liability for its gross negligence.

 

(iii) IN NO EVENT WILL EITHER PARTY BE LIABLE FOR DAMAGES BASED ON LOSS OF INCOME, PROFIT OR SAVINGS OR INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES OF THE OTHER PARTY OR PERSON, INCLUDING THIRD PARTIES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE, AND ALL SUCH DAMAGES ARE EXPRESSLY DISCLAIMED. IN NO EVENT WILL THE ADVISOR’S AGGREGATE LIABILITY UNDER THIS AGREEMENT EVER EXCEED THE TOTAL AMOUNT OF FEES IT ACTUALLY RECEIVES FROM THE COMPANY PURSUANT TO ARTICLE 9.

 

(iv) THE PARTIES HERETO INTEND THAT THE RELEASE FROM LIABILITY SET FORTH IN SECTION 16.03 BE CONSTRUED AND APPLIED AS WRITTEN NOTWITHSTANDING ANY RULE OF CONSTRUCTION TO THE CONTRARY. WITHOUT LIMITING THE FOREGOING, THE RELEASE FROM LIABILITY SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, APPLY NOTWITHSTANDING ANY STATE’S “EXPRESS NEGLIGENCE RULE” OR SIMILAR RULE THAT WOULD DENY COVERAGE BASED ON A PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR STRICT LIABILITY. IT IS THE INTENT OF THE PARTIES THAT, TO THE EXTENT PROVIDED IN SECTION 16.03, THE RELEASE FROM LIABILITY SET FORTH HEREIN SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, APPLY TO A RELEASED PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR STRICT LIABILITY. THE PARTIES AGREE THAT THIS PROVISION IS “CONSPICUOUS” FOR PURPOSES OF ALL STATE LAWS.

 

ARTICLE 17

 

 

MISCELLANEOUS

 

17.01 Notices

 

. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is required by the Articles of Incorporation, the Bylaws, or accepted by the party to whom it is given, and shall be given by being delivered by hand or by overnight mail or other overnight delivery service to the addresses set forth herein:

 

To the Company, the General Partner or the Directors:

 

Hines REIT Properties, L.P.

c/o Hines Real Estate Investment Trust, Inc.

2800 Post Oak Blvd., Suite 5000

Houston, Texas 77056

To the Advisor:

 

Hines Advisors Limited Partnership

2800 Post Oak Blvd., Suite 5000

Houston, Texas 77056

Either party may at any time give notice in writing to the other party of a change in its address for the purposes of this Section 17.01.

 

17.02 Modification

 

. This Agreement shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing signed by all parties hereto, or their respective successors or assignees.

 

17.03 Severability

 

. The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

 

17.04 Construction

 

. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of Texas.

 

17.05 Entire Agreement

 

. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing.

 

17.06 Waiver

 

. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

17.07 Gender

 

. Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires.

 

17.08 Titles Not to Affect Interpretation

 

. The titles of Articles and Sections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

 

17.09 Counterparts

 

. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories

 

  

  

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

 

	  	
Hines REIT Properties, L.P.

 

By:Hines Real Estate Investment Trust, Inc.

Its:General Partner

 

 

By:  /s/ Charles N. Hazen                                                     

Name: Charles N. Hazen

Title:  President and Chief Executive Officer

 

	  	  
	  	
Hines Advisors Limited Partnership

 

By:Hines Advisors GP LLC

Its:General Partner

 

 

By:  /s/ Sherri W. Schugart                                                     

Name: Sherri W. Schugart

Title: Chief Financial Officer

 

	  	  
	  	
Hines Real Estate Investment Trust, Inc.

 

By:  /s/ Charles N. Hazen                                                     

Name: Charles N. Hazen

Title: President and Chief Executive Officer

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