Document:

vproex101.htm

 

 

Exhibit 10.1

SHARE SALE AGREEMENT

THIS AGREEMENT is made this                    day of                                                                           2011

BETWEEN:

	
1.

	
VIROPRO, INC., a company incorporated under the laws of the State of Nevada with its head office located at 4199 Campus Drive, Suite 550, Irvine, CA 92612 ("Purchaser") of the one part;

  AND

	
2.

	
The persons whose names and particulars are as set out in Schedule 1 (collectively referred to as the “Vendors" and each of them shall also be referred to as a "Vendor") of the other part.

WHEREAS:

	
A.

	
ALPHA BIOLOGICS SDN. BHD. (Company No. 606545-H) (“the Company”), a company with limited liability incorporated in Malaysia, is a bio-manufacturing organisation offering US FDA/EMEA current Good Manufacturing Practices (cGMP) compliant services to the worldwide pharmaceutical and biotechnology industry. The registered office address and other particulars relating to the Company are as contained in Schedule 2.

	
B.

	
As at the date of this Agreement, the Vendors are the legal and beneficial owners of the Sale Shares (as defined below) and the Vendors each hold the Sale Shares in the proportion set out against their respective names in Column B of  Schedule 3.

	
C.

	
The Purchaser is a public company engaged in the business of biotechnology Contract Research, Development and GMP Manufacturing, involving various aspects of microbial and cell culture operations and has at the date hereof, 340,808,570 common stocks have been issued as fully paid-up.

	
D.

	
The Purchaser has been listed on the Pink Sheet since July 2009.

	
E.

	
The Purchaser has set forth a business plan that calls for the acquisition of existing business units complementing its offer of biotech Contractual R&D and Manufacturing Services. The Purchaser recognizes the potential of Alpha to add value to the growth of the Purchaser and hence desires to purchase the Sale Shares in the manner and upon the terms set out in this Agreement.

  

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F.

	
Consequently, the Vendors have agreed to sell, and the Purchaser has agreed to purchase, all the Sale Shares for the Consideration Shares (as defined below) and on the terms and subject to the conditions contained in this Agreement.

NOW IT IS HEREBY AGREED as follows:-

	
1.

	
DEFINITIONS AND INTERPRETATION

	
1.1

	
For the purposes of this Agreement the following words and phrases shall have the following meaning, unless the context requires otherwise:

	
“Accounts”

	  	
Means in relation to any financial year :

 

(a)  the audited balance sheet as at the respective accounts date in respect of that financial year; and

 

(b)  the audited profit and loss account in respect of that financial year,

 

prepared by the auditors of the Company or the Purchaser (as the case may be) on a consistent basis in accordance with accounting principles, standards and practices generally accepted at the date hereof in Malaysia and the United States of America respectively, together with any notes, reports or statements included in or annexed to them;

 

	
“Pink Sheet”

	  	
Means the US Over-the-Counter market where the Viropro Stocks are trading.

 

	
“Business”

	  	
Means the business as described in Schedule 2;

 

	
“Business Day”

	  	
Means a day (other than a Saturday, a Sunday or a gazetted public holiday) on which commercial banks are open for business in Malaysia;

 

	
“Charter Documents”

	  	
Means the Memorandum and Articles of Association of Alpha and the charter and constitutional documents of the Purchaser (as the case may be);

 

	
“Company”

	  	
Means the company stated in Schedule 2;

 

	
“Companies Act”

	  	
Means the Companies Act, 1965 (Act 125) of Malaysia and any modification or re-enactment thereof ;

 

	
“Completion”

	  	
Means completion of the sale and purchase of the Sale Shares as specified in Clause 7 herein;

 

	
“Completion Date”

	  	
Means a Business Day to be agreed upon by the parties which day shall be no later than seven (7) Business Days from the Unconditional Date or such other date as the parties hereto may mutually agree in writing;

 

	
“Cut-Off Date”

	  	
Means 12 months from the date of this Agreement or such later date as may be mutually agreed between the parties hereto;

 

	
“Consideration Shares”

	  	
Has the meaning ascribed to it in Clause 5. herein;

 

	
“disposal”

	  	
includes any sale, assignment, exchange, transfer, concession, lease, surrender of lease, licence, release of security, or the granting of any option or right or interest whatsoever or any agreement for any of the same and “dispose” means to make a disposal;

 

	
“Encumbrance”

	  	
Means any mortgage, assignment of receivables, debenture, lien, charge, pledge, title retention, right to acquire, security interest, options, pre-emptive rights, rights of first refusal and any other encumbrance or condition whatsoever;

 

	
“Last Accounts”

	  	
Means the Accounts in respect of the financial year ended on the Last Accounts Date;

 

	
“Last Accounts Date”

	  	
Means December 31, 2010;

 

	
“MLEP”

	  	
Means Michelle Leanne Edythe Peake (Passport No. L9992714);

 

	
“Parties”

	  	
Means the Vendors and the Purchaser and where the context admits, “Party” shall mean any one of them;

 

	
“Purchase Price”

	  	
Means the consideration for the purchase of the Sale Shares referred to in Clause 5.1 herein;

 

	
“Register of Members”

	  	
Means the register of member maintained by the Company pursuant to the Act;

 

	
“Ringgit Malaysia” or “RM”

 

	  	
Means the lawful currency of Malaysia;

 

	
“Sale Shares”

	  	
Means in relation to each Vendor, the number of ordinary shares of RM1.00 each as at the Completion Date in the issued and paid-up share capital of the Company as set out against their name in Column B of Schedule 3;

 

	
“Springhill”

	  	
Means Spring Hill Bioventures Sdn Bhd (Company No. 591528-H);

 

	
“taxes” or “taxation”

	  	
Means all forms of taxation whether of Malaysia, the United States of America or elsewhere, including all state or local taxation, past, present and deferred (including without limitation, income tax (including without limitation, net income and gross income), corporate, value added, occupation, real and personal property, social security, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, occupation, premium or windfall profit taxes, estate duty, stamp duty, customs and other import or export duties, or charges of any kind whatsoever, estimated and other taxes, together with any interest and levies and all penalties, charges, costs, fines and additions to tax) payable by or due, or any additional amounts imposed by any government, governmental agency, statutory body or any revenue authority;

 

	
“THG Capital”

	  	
THG Capital Sdn Bhd (Company No. 599993-V);

 

	
“United States Dollar” or “USD”

 

	  	
Means the lawful currency of the United States of America;

 

	
“Warranties”

	  	
Means the representations, warranties, undertakings and indemnities made by the Purchaser or the Vendors (as the case may be) referred to in Clauses 8, 9 and 10 herein;

 

	
“VPRO Stocks”

	  	
Means common stocks of par value USD 0.001 each in the capital of the Purchaser.

 

	
1.2

	
In this Agreement, unless there is something in the subject or context inconsistent with such construction or unless it is otherwise expressly provided –

	
  

	
1.2.1

	
words denoting one gender include all other genders and words denoting the singular include the plural and vice versa;

	
  

	
1.2.2

	
words denoting persons include corporations, and vice versa, and also include their respective heirs, personal representatives, successors in title or permitted assigns, as the case may be;

	
  

	
1.2.3

	
words and phrases, definitions of which are given in the Act, shall be construed as having the meaning thereby attributed to them;

	
  

	
1.2.4

	
where a word or phrase is given a defined meaning in this Agreement any other part of speech or other grammatical form in respect of such word or phrase has a corresponding meaning;

	
  

	
1.2.5

	
where a word or phrase indicates an exception to any of the provisions of this Agreement, and a wider construction is possible, such word or phrase is not to be construed ejusdem generis with any foregoing words or phrases and where a word or phrase serves only to illustrate or emphasize any of the provisions of this Agreement such word or phrase is not to be construed, or to take effect, as limiting the generality of such

provision;

  

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1.2.6

	
any reference to a recital, appendix, sub-paragraph, paragraph, sub-clause, clause or party is to the relevant recital, appendix, sub-paragraph, paragraph, sub-clause, clause or party of, or to, this Agreement and any reference to this Agreement or any of the provisions hereof includes all amendments and modifications made to this Agreement from time to time in force;

	
  

	
1.2.7

	
any reference to a statutory provision includes any modification, consolidation or reenactment thereof for the time being in force, and all statutory instruments or orders made pursuant thereto;

	
  

	
1.2.8

	
any reference to "pay", or cognate expressions, includes payments made in cash or by way of bank drafts (drawn on a bank licensed to carry on banking business under the provisions of the Banking and Financial Institutions Act 1989 of Malaysia) effected through inter-bank transfers to the account of the payee, giving the payee access to immediately available, freely transferable, cleared funds;

	
  

	
1.2.9

	
any reference to "writing", of cognate expressions, includes any communication effected by telex, cable, facsimile transmission or other comparable means;

	
  

	
1.2.10

	
any reference to a "business day" is to a day (not being a gazetted or ungazetted public holiday, a Saturday or Sunday) on which banks (including merchant banks) licensed to carry on banking business under the provisions of the Banking and Financial Institutions Act 1989 of Malaysia, are open for business in Kuala Lumpur and any reference to a "day", "week", "month" or "year" is to that day, week, month or year in accordance with the Gregorian calendar; and

	
  

	
1.2.11

	
if any period of time is specified from a given day, or the day of a given act or event, it is to be calculated exclusive of that day and if any period of time falls on a day, which is not a business day, then that period is to be deemed to only expire on the next business day.

	
1.3

	
The Recitals to this Agreement shall have effect and be construed as an integral part of this Agreement, but in the event of any conflict or discrepancy between any of the provisions of this Agreement such conflict or discrepancy shall, for the purposes of the interpretation and enforcement of this Agreement, be resolved by giving the provisions contained in the clauses of this Agreement priority and precedence over the provisions contained in the Recitals to this Agreement.

	
1.4

	
The table of contents, headings and sub-headings in this Agreement are inserted merely for convenience of reference and shall be ignored in the interpretation and construction of any of the provision herein contained.

  

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2.           SALE AND PURCHASE OF THE SALE SHARES

	
2.1

	
Subject to the terms and conditions of this Agreement, the Vendors (each as to those number of the Sale Shares specified against its name in Column B of Schedule 3) shall collectively sell as legal and beneficial owners of, and the Purchaser, shall purchase, all the Sale Shares free from all Encumbrances and together with all rights and benefits as at the Completion Date and thereafter attaching thereto.

3.           CONDITIONS PRECEDENT

	
3.1

	
The sale and purchase herein shall be conditional upon the following matters having been obtained or fulfilled on or before the Cut-Off Date:-

	
  

	
(a)

	
the Warranties contained herein remaining true and not misleading in any respect at Completion, as if repeated at Completion and at all times between the date of this Agreement and the Completion Date;

	
  

	
(b)

	
the Parties having performed all of the covenants and agreements required to be performed or caused to be performed by it under this Agreement on or before the Completion Date;

	
  

	
(c)

	
the approval of the shareholders of the Purchaser (if required), in relation to the following:

	
  

	
(i)

	
the allotment and issue of the Consideration Shares to the Vendors on the terms and conditions of this Agreement; and

	
  

	
(ii)

	
authorising the execution of and the performance by it of its obligations under this Agreement and of any other documents to be executed by it pursuant to this Agreement;

	
  

	
(d)

	
the approval of the shareholders of Springhill and THG Capital (if required) for the sale of the Sale Shares;

	
  

	
(e)

	
the approval of the Stockholders for the change of control and the terms of this Agreement during the Stockholders Meeting to be held April 28, 2011 or at such other time as the case may be;

	
  

	
(f)

	
the approval of and/or notification to (as the case may be) of the following entities: (i) Penang Development Corporation; (ii) the Ministry of International Trade and Industry of Malaysia; and (iii) Bank Pembangunan Malaysia Berhad;

  

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(g)

	
all other consents, permits, licences and approvals required to be obtained under any and all applicable laws for the sale and purchase of the Sale Shares; and

	
  

	
(h)

	
neither the Purchaser nor the Vendors having received notice of any injunction or other order, directive or notice restraining or prohibiting the consummation of the transactions contemplated by this Agreement or there being no action seeking to restrain or prohibit the consummation thereof, or seeking damages in connection therewith, which is pending or any such injunction, other order or action which is threatened.

	
3.2

	
Each of the Parties shall provide such information and assistance as may be reasonably required by the party seeking the requisite approvals or notifications.

	
3.3

	
Any Party receiving any letter regarding any of the approvals, consents or waivers from the parties (“Authorities”) referred to in Clause 3.1 shall immediately send a copy of such letter to the other Party.  Any such approval, consent or waiver containing one or more condition(s) which adversely affects any Party and such Party (acting in good faith) finds that condition unacceptable (“Affected Party”), the Affected Party shall be entitled by written notice to the other Parties to elect one of the following options within fourteen (14) Business Days (“Action Period”) from the date the Affected Party receives a copy of that Authority’s letter containing that unacceptable condition(s):-

	
  

	
(a)

	
to appeal against the unacceptable condition(s); or

	
  

	
(b)

	
to accept such unacceptable condition(s).

In default of any election made under paragraphs (a) or (b) above, the Parties shall be deemed to have accepted the condition(s) and that Authority’s approval containing such condition(s) shall be deemed obtained on the expiry of the Action Period for the purpose of satisfying the relevant condition.

	
3.4

	
If the Affected Party elects to appeal against the decision of an Authority in respect of unacceptable condition(s) (“Appeal”), the Party liaising with such Authority (the “Liaison”) shall so appeal within fourteen (14) Business Days from the date the Liaison receives the Affected Party’s letter electing to so appeal.  If the Appeal is not allowed or only partially allowed, any party who is adversely affected by the decision of the Appeal and who (acting in good faith) finds any condition(s) unacceptable shall be entitled by written notice to the other Parties to, reject the unacceptable condition as modified (if at all) by the decision of the Appeal within fourteen (14) Business Days from its receipt of the letter of that Authority from the Liaison containing the decision of the Appeal; and in such an event that Authority’s approval shall be deemed not to have been obtained.  In default of any rejection made under this paragraph, the Parties shall be deemed to have accepted the condition(s) and that Authority’s approval containing such condition(s) shall be deemed obtained on the expiry of the said fourteen (14) Business Days for the purpose of satisfying the relevant condition.

  

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3.5

	
In the event the Appeal is allowed fully, then that Authority’s approval in respect of which such unacceptable conditions are imposed as modified by the decision of the Appeal shall be deemed to have been obtained for the purposes of satisfying the relevant condition and in so far as the Affected Party is concerned on the date of the Parties’ receipt of the letter of that Authority from the Liaison containing the decision of the Appeal and such unacceptable conditions as so modified by the successful Appeal shall be deemed to be accepted by the Affected Party for the purpose of satisfying the relevant condition.

	
3.6

	
In the event that an Affected Party (acting in good faith) elects to reject any unacceptable condition(s) contained in any Authorities’ approvals pursuant to paragraphs (b), (c) or (d) of Clauses 3.1, then that Affected Party shall be entitled by written notice to the other Parties to immediately terminate this Agreement and each of the Parties shall be released and discharged from their respective obligations and shall have no claim against the other for costs, damages, compensation or otherwise arising from this Agreement.

	
3.7

	
In the event that an approval or decision of an Authority given on appeal or otherwise does not impose any condition(s), that approval or decision shall be deemed to have been obtained for the purposes of Clause 3.1 for the purpose of satisfying the relevant condition on the date of the Parties’ receipt of the letter of that Authority from the Liaison containing the approval or decision of the Authority.

	
3.8

	
For the avoidance of doubt, the Affected Party may request for only one (1) Appeal.

	
3.9

	
If any of the conditions specified in Clause 3.1 is not fulfilled or mutually waived in writing by the Purchaser and the Vendors on or before the Cut-off Date, this Agreement shall ipso facto cease and determine, each of the Parties shall be released and discharged from their respective obligations and shall have no claim against the other for costs, damages, compensation or otherwise arising from this Agreement save and except for any antecedent breach.

	
3.10

	
Upon the last of the conditions specified in Clause 3.1 having been obtained or deemed to have been obtained, this Agreement shall become unconditional ("Unconditional Date") and the parties shall proceed to completion in accordance with the terms herein.

  

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4.           PROVISION OF WORKING CAPITAL

	
4.1

	
No later than February 28, 2011, the Purchaser shall remit United States Dollar Three Hundred Thousand (USD300,000.00) as working capital for the Company.

	
4.2

	
The Purchaser shall further remit up to a further sum of United States Dollar Two Hundred Thousand (USD200,000.00) as additional working capital for the Company if required and requested by the Company.

	
4.3

	
Without prejudice to Clauses 4.1 and 4.2, the Purchaser hereby undertakes and covenants with the Vendors that the Purchaser will invest up to United States Dollar Five Million (USD5,000,000.00) in the Company by way of equity or debt capital to fund the operations and working capital needs of the Company (including without limitation to fulfill the warranties stated in Clauses 8.1(a) and (b)).

	
4.4

	
For the avoidance of doubt, it is hereby agreed that the Vendors would not have entered into this Agreement to sell the Sale Shares without the representations and warranties of the Purchaser as stated in this Clause and in this Agreement.

 

 

5.           CONSIDERATION FOR THE SALE SHARES

	
5.1

	
The consideration for the purchase of the Sale Shares (“Purchase Price”) shall be the sum stated in Column C of Schedule 3.

	
5.2

	
The Purchase Price shall be satisfied by the allotment and issue to each of the Vendors the Consideration Shares set out against the name of each Vendor as stated in Column D of Schedule 3 (“Consideration Shares”) of new VPRO Stocks (thereby valuing each new VPRO Stock at USD0.04) credited as fully paid-up and ranking pari passu in all respects with the existing issued common stocks of the Purchaser on the Completion Date.

6.           PRE-COMPLETION

	
6.1

	
Pending Completion, the Purchaser shall ensure and procure that they and their subsidiaries and the Vendors shall ensure and procure that Alpha and its subsidiaries will comply with the following, except with the prior written consent of each other:

  

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(a)

	
not do, allow or procure any act or omission which would constitute a breach of any of the Warranties if they were given on or at any time before Completion by reference to the facts and circumstances then existing;

	
  

	
(b)

	
no action is taken which is inconsistent with the provisions of this Agreement or the consummation of the transactions contemplated by this Agreement;

	
  

	
(c)

	
carry on business in the normal course;

	
  

	
(d)

	
not do anything that is not in their ordinary course of business;

	
  

	
(e)

	
not reduce their share capital in any way or reclassify or alter the terms their issued securities;

	
  

	
(f)

	
not buy back any of their shares;

	
  

	
(g)

	
not announce, declare or pay any dividend or other distribution to their shareholders, other than pay dividends declared prior to the date of this agreement;

	
  

	
(h)

	
not issue any shares except pursuant to the conversion of any issued securities or exercise of options under an employee share option scheme;

	
  

	
(i)

	
not grant any options over their shares;

	
  

	
(j)

	
not alter the provisions of their Charter Documents;

	
  

	
(k)

	
not sell, transfer or dispose or otherwise jeopardize of the whole or any part of business, undertakings or assets otherwise than in the ordinary course of their business;

	
  

	
(l)

	
not, otherwise than in the ordinary course of their business and consistent with their past practice –

	
  

	
(i)

	
increase the remuneration of, or otherwise vary the terms of employment of any of their directors or employees;

	
  

	
(ii)

	
accelerate the rights of any directors  or employees to compensation or benefits, except where such acceleration occurs automatically the terms of an existing agreement or scheme;

	
  

	
(iii)

	
pay any of their directors or employees a termination payment.

  

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(m)

	
not lend any money outside the normal course of business, which will not include advances to their joint venture companies for on-going developments and investments;

	
  

	
(n)

	
borrow any money or give any debenture, mortgage, charge or other Encumbrance over any of its assets or undertaking unless it is in the ordinary course of business and does not exceed the aggregate sum of USD1,000,000 (or its equivalent in Ringgit Malaysia);

	
  

	
(o)

	
not enter into capital expenditure commitments, hire purchase, leasing, rental or conditional sale agreements or arrangements unless it is in the ordinary course of business;

	
  

	
(p)

	
not enter into capital expenditure commitments, hire purchase, leasing, rental or conditional sale agreements or arrangements outside the ordinary course of business that exceed the aggregate sum of USD1,000,000 (or its equivalent in Ringgit Malaysia);

	
  

	
(q)

	
not enter into any agreement which is outside the ordinary course of its business or which is of an onerous nature;

	
  

	
(r)

	
not give any financial or other guarantees, securities or indemnities for any purpose other than to its subsidiaries in the ordinary course of business;

	
  

	
(s)

	
not commence any litigation or compromise or settle any claim, dispute or other matter in which it is involved where the value involved exceeds USD1,000,000 (or its equivalent in Ringgit Malaysia), but does not include any legal action taken to defend against suits or legal actions taken brought by third parties.

7.           COMPLETION

	
7.1

	
Subject to Clause 3, Completion shall take place on the Completion Date at the office of the Company (or at such other place as may be agreed by the parties in writing) where all of the events described below shall occur.

	
7.2

	
At Completion, subject to Clause 7.5, the Vendors shall deliver the share certificates in respect of the Sale Shares, together with valid and registrable share transfer forms in respect of all the Sale Shares duly executed by each of the Vendors in favour of the Purchaser.

	
7.3

	
Subject to Clause 7.5, on the Completion Date and against compliance with the respective provisions of Clause 7.2, the Purchaser shall:

  

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(a)

	
allot and issue to, and register the share certificates relating to the Consideration Shares in the name of each Vendor or his/her nominee(s) that number of Consideration Shares set out against the name of each Vendor as stated in Column E of Schedule 3; and

	
  

	
(b)

	
deliver or procure to be delivered to each Vendor the share certificates for the Consideration Shares.

	
7.4

	
Without prejudice to any other remedies available, if in any respect the provisions of this Clause are not fully complied with by the Vendors or, as the case may be, by the Purchaser on the Completion Date, the party not in default may (without prejudice to its other rights and remedies conferred by law or otherwise):

	
  

	
(a)

	
proceed to Completion so far as practicable (without prejudice to their rights hereunder); or

	
  

	
(b)

	
sue for specific performance; or

	
  

	
(c)

	
rescind this Agreement and sue for damages.

	
7.5

	
None of the parties shall be obliged to perform any of its obligations under Clauses 7.2 and 7.3 unless (simultaneously with such performance) all the other parties perform their respective obligations under such Clauses.

	
7.6

	
In the event that Completion should not take place due to any failure to satisfy any or all the conditions precedent mentioned in Clause 3 or the occurrence of any event which is beyond the control of the parties hereto, this Agreement shall ipso facto cease and none of the parties hereto shall have any claim against the others, save (a) for antecedent breaches of any Warranties, and (b) as provided for in this Agreement, and all the rights and obligations of the parties hereto shall cease.

8.           POST-COMPLETION

	
8.1

	
The Purchaser hereby represents, warrants and undertakes to each of the Vendors and its successors in title (with the intent that the provisions of this Clause 8.1 shall continue to have full force and effect notwithstanding Completion) that:

	
  

	
(a)

	
the Purchaser shall procure the replacement of the fixed deposit of RM5,000,000.00 placed by Springhill with HSBC Bank Malaysia (as security for credit facilities given by Bank Pembangunan Malaysia Berhad

  

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to the Company) with such security as may be acceptable to Bank Pembangunan Malaysia Berhad. Springhill will provide administrative and liaison assistance to the Purchaser in this regard;

	
  

	
(b)

	
The Purchaser shall provide funds to the Company to enable the Company to repay the debt owed by the Company to Springhill (which as at the date of this Agreement is Ringgit Malaysia Eight Million Five Hundred and Seventy Five Thousand (RM8,575,000.00)) as and when demanded by Springhill. Springhill will provide administrative and liaison assistance to the Purchaser in this regard;

	
  

	
(c)

	
Dr. Rajiv Datar, Dr. Scott Brown and Claude Gingras shall not sell more than 10% annually of the VPRO Stocks held by them for a period of three (3) years from the Completion Date. In this regard, the Purchaser shall, prior to the Completion Date, procure that Dr. Rajiv Datar, Dr. Scott Brown and Claude Gingras execute a letter of undertaking in form and content acceptable to the Vendors for this purpose; and

	
  

	
(d)

	
Dr. Rajiv Datar, Dr. Scott Brown and Claude Gingras shall form part of the management team of the Company upon employment terms to be agreed by each of them with the Purchaser.

9.           WARRANTIES

	
9.1

	
The Vendors hereby jointly and severally represent, warrant and undertake to and with the Purchaser and its successors in title (with the intent that the provisions of this Clause 9.1 shall continue to have full force and effect notwithstanding Completion) that:

	
  

	
(e)

	
each of the Vendors is currently, and will be on Completion, the legal and beneficial owner of such number of the Sale Shares as set out against its name in Column B of Schedule 3;

	
  

	
(f)

	
each of the Vendors is, and shall on Completion be, entitled to sell and transfer or procure the transfer of such number of the Sale Shares as set out against its name in Schedule 3 to the Purchaser and/or its nominee(s), free from all and any Encumbrances together with all rights and benefits attaching thereto as at the Completion Date and no other person has or shall have any rights of pre-emption or other similar rights over such Sale Shares; and

	
  

	
(g)

	
on Completion, the Sale Shares are and shall have been duly authorised, validly issued, allotted and fully paid-up.

	
9.2

	
The Vendors and the Purchaser hereby represent, warrant and undertake to and with each other and their respective successors in title (with the intent that the provisions of this Clause 9.2 shall continue to have full force and effect notwithstanding Completion) that:.

  

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(a)

	
the Warranties will be correct as at the Completion Date, subject only to any matters which are expressly provided for under the terms of this Agreement;

	
  

	
(b)

	
the Warranties will be fulfilled down to, and will be true and correct in all respects and not misleading at, Completion as if they had been entered into afresh at Completion and that the Vendors and the Purchaser (as the case may be) shall not do, allow or procure any act or omission before Completion which would constitute a breach of any of the Warranties if they were given at Completion or which would make any of the Warranties inaccurate or misleading if they were so given; and

	
  

	
(c)

	
if after the signing of this Agreement and before Completion, any event actually known to the Parties shall occur or matter arises which results or may result in any of the Warranties being unfulfilled, untrue, misleading or incorrect in any respect at Completion, the said Party shall immediately notify the other Party in writing fully thereof prior to Completion and the notifying Party shall make any investigation and/or do all such acts concerning the event or matter which the other Party may require.

	
9.3

	
Each Party acknowledges that other Party has entered into this Agreement in full reliance upon and on the basis of each of the Warranties contained herein.

	
9.4

	
Each of the Warranties shall be construed as a separate Warranty and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other term of this Agreement.

	
9.5

	
No claim hereunder shall be deemed to have made unless notice of such claim was made in writing specifying in reasonable detail the event of default to which the claim relates and the nature of the breach and the amount claimed.

	
9.6

	
Nothing in this clause shall derogate from each Party’s obligation to mitigate any loss which it suffers in consequence of a breach of the Warranties.

10.           WARRANTIES AS TO AUTHORITY

	
10.1

	
The Purchaser and each of the Vendors (who is a corporate body) hereby represents, warrants and undertakes to and with the other Party and their respective successors-in-title (with the intent that the provisions of this Clause 10.1 shall continue to have full force and effect notwithstanding Completion) that:

  

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(a)

	
it has full power and authority to execute and deliver this Agreement and the agreements contemplated herein, and to consummate the transactions contemplated hereby and thereby and that this Agreement and all such other agreements and obligations entered into and undertaken in connection with the transactions contemplated hereby constitute its valid and legally binding obligations, enforceable against it in accordance with their respective terms and the execution and delivery of, and the performance by it of its obligations under, this Agreement shall not:

	
  

	
(i)

	
result in a breach of its Charter Documents and do not infringe, or constitute a default under, any directive, instrument, contract, document or agreement to which it is a party or by which it is bound; and/or

	
  

	
(ii)

	
result in a breach of any law, rule, regulation, ordinance, order, judgment or decree of or undertaking to any court, government body, statutory authority or regulatory, administrative or supervisory body (including without limitation, any relevant stock exchange or securities commission/council) to which it is a party or by which it is bound, whether in Malaysia, the United States of America or elsewhere;

	
  

	
(b)

	
it is a company duly incorporated and validly existing under the laws of the country of its incorporation and has all requisite power and authority (corporate and otherwise) to own its assets and properties and to carry on its business as now being conducted and that it has the power to enter into, exercise its rights and perform and comply with its obligations under this Agreement;

	
  

	
(c)

	
all actions, conditions and things required to be taken, fulfilled and done (including without limitation, the obtaining of any necessary consents) in order (i) to enable it to lawfully enter into, exercise its rights and perform and comply with its obligations under this Agreement, (ii) to ensure that those obligations are legally binding and enforceable in accordance with their respective terms, and (iii) to make this Agreement admissible in evidence in the courts of Malaysia and the United States of America have been taken, fulfilled and done;

	
  

	
(d)

	
no order has been made or petition presented or resolution passed for its winding-up or administration or judicial management;

	
  

	
(e)

	
no distress, execution or other process has been levied on any asset owned or used by it; and

  

Page 13

  

 

	
  

	
(f)

	
no person has appointed or threatened to appoint or become entitled to appoint a receiver or receiver and manager or other similar officer of its business or assets or any part of them.

	
10.2

	
MLEP hereby represents, warrants and undertakes to and with the Purchaser and its successors-in-title (with the intent that the provisions of this Clause 10.2 shall continue to have full force and effect notwithstanding Completion) that:

	
  

	
(a)

	
she has full capacity to execute and deliver this Agreement and the agreements contemplated herein, and to consummate the transactions contemplated hereby and thereby and that this Agreement and all such other agreements and obligations entered into and undertaken in connection with the transactions contemplated hereby constitute her valid and legally binding obligations, enforceable against her in accordance with their respective terms and the execution and delivery of, and the performance by her of her obligations under, this Agreement shall not:

	
  

	
(i)

	
result in a breach of, or constitute a default under, any directive, instrument, contract, document or agreement to which she is a party or by which she is bound; and/or

	
  

	
(ii)

	
result in a breach of any law, rule, regulation, ordinance, order, judgment or decree of or undertaking to any court, government body, statutory authority or regulatory, administrative or supervisory body (including without limitation, any relevant stock exchange or securities commission/council) to which she is a party or by which he is bound, whether in Malaysia, the United States of America or elsewhere;

	
  

	
(b)

	
all actions, conditions and things required to be taken, fulfilled and done (including without limitation, the obtaining of any necessary consents) in order (i) to enable her to lawfully enter into, exercise her rights and perform and comply with her obligations under this Agreement, (ii) to ensure that those obligations are legally binding and enforceable in accordance with their respective terms, and (iii) to make this Agreement admissible in evidence in the courts of Malaysia and the United States of America have been taken, fulfilled and done;

	
  

	
(c)

	
no order has been made or petition presented for her bankruptcy;

	
  

	
(d)

	
no distress, execution or other process has been levied on any asset owned by her; and

  

Page 14

  

 

	
  

	
(e)

	
no person has appointed or threatened to appoint or become entitled to appoint an official assignee or other similar officer of her assets or any part of them.

11.           INDEMNITY

	
11.1

	
Each party hereby irrevocably undertakes to keep the other party and its officers, directors, employees, representatives and agents fully and effectively indemnified against any and all losses, costs, damages, claims, demands, actions, proceedings, liabilities, obligations, judgements, deficiencies, assessments, suits, arbitrations and expenses whatsoever (including but not limited to all legal costs or attorney's fees on a full indemnity basis) that the non-defaulting party or any of its officers, directors, employees, representatives or agents may pay, incur or suffer, directly or indirectly, in connection with or arising from any misrepresentation by the defaulting party in any material respect under the terms of this Agreement or for any breach of any term or condition hereof and/or any default by the defaulting party of their respective obligations under this Agreement.

	
11.2

	
Any liability hereunder to the non-defaulting party by the defaulting party may in whole or in part be released, compounded or compromised, or time or indulgence may be given, by the non-defaulting party in its absolute discretion without in any way prejudicing or affecting its rights against the defaulting party. Any release or waiver or compromise shall be in writing and shall not be deemed to be a release, waiver or compromise of similar conditions in the future.

12.           CONFIDENTIALITY

	
12.1

	
Each of the parties hereto hereby agrees to keep strictly secret and confidential, and shall not under any circumstances whatsoever, disclose to any person or entity which is not a party hereto, the terms of this Agreement.

	
12.2

	
Notwithstanding Clause 12.1, the confidentiality obligation under Clause 12.1 shall not apply to:

	
  

	
(a)

	
any information obtained from any party hereto which becomes generally known to the public, other than by reason of any willful or negligent act or omission of any party hereto or any of their agents, advisers, directors, officers, employees or representatives;

	
  

	
(b)

	
any information which is required to be disclosed pursuant to any applicable laws or to any competent governmental or statutory authority or pursuant to rules or regulations of any relevant regulatory, administrative or supervisory body in Malaysia or the United States of America;

	
  

	
(c)

	
any information which is required to be disclosed pursuant to any legal process issued by any court or tribunal whether in Malaysia, the United States of America or elsewhere; and

	
  

	
(d)

	
any information disclosed by any of the parties to their respective bankers, financial advisers, consultants and legal or other advisers for the purpose of this Agreement.

13.           RESTRICTION ON ANNOUNCEMENTS

	
13.1

	
Save as may be required to be disclosed pursuant to any applicable laws or to any competent governmental or statutory authority or rules or regulations of any relevant regulatory, administrative or supervisory body (including, without limitation, any relevant stock exchange or securities commission/council), each party undertakes that prior to Completion it will not make any announcement in connection with this Agreement unless the other parties hereto shall have given their respective consents to such announcement (which consent may not be unreasonably withheld).

14.           COSTS

	
14.1

	
Each party to this Agreement shall bear its own legal and other costs and expenses of and incidental to this Agreement and the sale and purchase of the Sale Shares hereby agreed to be made. The Purchaser shall bear all stamp duty payable in connection with this Agreement and the transfer of the Sale Shares.

15.           GENERAL

	
15.1

	
This Agreement shall be binding upon and inure for the benefit of the successors and estates of the parties hereto.

	
15.2

	
The parties shall not assign or transfer all or any part of their respective rights under this Agreement or delegate their performance under this Agreement without the prior written approval of the other party (except as expressly permitted by any of the provisions of this Agreement), and any assignment, transfer or delegation which is made without such prior written approval shall constitute a breach of this Agreement.

	
15.3

	
The parties shall do and execute or procure to be done and executed all such further acts, deeds, things and documents as may be necessary to give effect to the terms of this Agreement, and to provide such assistance and record as the other parties may request in connection with any tax return, tax investigation or audit, judicial or administrative proceeding or other similar matter relating to the Company.

	
15.4

	
This Agreement and the documents referred to in it, constitute the entire agreement and understanding of the parties relating to the subject matter of this Agreement and supersedes all prior and contemporaneous agreements or correspondence or understanding, express or implied, oral or written.

	
15.5

	
Save as expressly provided herein, any right of termination conferred upon the Purchaser or the Vendors shall be in addition to and without prejudice to all other rights and remedies available to it and no exercise or failure to exercise such a right of termination shall constitute a waiver of any such other right or remedy.

	
15.6

	
As both parties have participated in the drafting of this Agreement, the parties hereto agree that any applicable rule requiring the construction of this Agreement or any provision hereof against the party drafting this Agreement shall not apply.

16.           ILLEGALITY

	
16.1

	
The illegality, invalidity or unenforceability of any provision of this Agreement under the law of any jurisdiction shall not affect its legality, validity or enforceability under the law of any other jurisdiction nor the legality, validity or enforceability of any other provision.

17.           NOTICES

	
17.1

	
Any notice required to be given by any party hereto to any other party shall be deemed validly served by hand delivery or by prepaid registered letter or by facsimile or by a recognised courier service sent to its address or facsimile number given herein or such other address or facsimile number as may from time to time be notified for this purpose.

	
17.2

	
Any such notice or communication shall be deemed to have been served:

	
  

	
(a)

	
if delivered by hand, at the time of delivery; or

	
  

	
(b)

	
if posted by prepaid registered letter, at the expiration of three (3) days after the envelope containing the same shall have been put into the post; or

	
  

	
(c)

	
if sent by facsimile, upon the receipt by the sender of the confirmation note indicating that the notice or communication has been sent in full to the recipient's facsimile machine, or such other similar medium of receipt; or

	
  

	
(d)

	
if sent by courier, at the expiration of two (2) days after the package containing the same shall have been received by the relevant courier company.

	
17.3

	
In proving such service it shall be sufficient to prove that delivery by hand was made or that the envelope containing such notice or document was properly addressed and posted as a prepaid registered letter or that the facsimile confirmation note indicates the transmission was successful, or the package as the case may be containing such notice or document was properly addressed and sent to the relevant courier company.

18.           REMEDIES AND WAIVERS

	
18.1

	
No failure on the part of any party to this Agreement to exercise, and no delay on its part in exercising, any right or remedy under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

19.           TIME OF ESSENCE

	
19.1

	
Any date, time or period mentioned in any provision of this Agreement may be extended by mutual agreement between the parties hereto (or such of the parties as may be affected thereby) but as regards any date or period (whether or not extended as aforesaid), time shall be of the essence.

20.           COUNTERPARTS

	
20.1

	
This Agreement may be signed in any number of counterparts, all of which taken together shall constitute one and the same instrument. Any party may enter into this Agreement by signing any such counterpart and each counterpart may be signed and executed by the parties and transmitted by facsimile transmission and shall be as valid and effectual as if executed as an original.

21.           GOVERNING LAW & DISPUTE RESOLUTION

	
21.1

	
This Agreement shall be governed by, and construed in accordance with, the laws of Malaysia.

	
21.2

	
If any dispute arises between the Parties hereto during the subsistence of this Agreement or thereafter, in connection with the validity, interpretation, implementation or alleged material breach of any provision of this Agreement or regarding a question, including the question as to whether the termination of this Agreement by one Party hereto has been legitimate, the Parties hereto shall endeavor to settle such dispute amicably. The attempt to bring about an amicable settlement is considered to have failed as soon as one of the Parties hereto, after reasonable attempts, which attempt shall continue for not less than thirty (30) days, gives notice thereof to the other Party in writing.

	
21.3

	
All disputes, controversies and differences of opinion arising out of or in connection with this Agreement or for the breach hereof which cannot be settled amicably by the Parties hereto shall be settled by arbitration in accordance with the UNCITRAL Model Law on Commercial Arbitration.

	
21.4

	
The number of arbitrators shall be three (3).  The Parties shall, within 30 (Thirty) days of receiving a notice from the other Party, appoint one arbitrator each and shall intimate the same to the other Parties.  For the purposes of clarity, the Parties agree that the Vendors shall jointly appoint one arbitrator, the Purchaser shall appoint one arbitrator and the arbitrators so appointed shall appoint the third arbitrator.

	
21.5

	
The arbitrators so nominated shall choose amongst themselves, the chairman of the arbitral panel.  In the event any Party fails to appoint an arbitrator within the time frames specified in this clause, the other Party shall be entitled to make an application to the relevant competent court in accordance with the procedure specified in the UNCITRAL Model Law on Commercial Arbitration for appointment of an arbitrator (at the cost of the defaulting party) and the arbitrator so nominated shall be deemed to be the arbitrator nominated by the defaulting party.

	
21.6

	
The decision of the arbitral panel shall be final and binding on the Parties.

	
21.7

	
The venue of arbitration shall be London, England. The Parties shall continue to fulfill their obligations under this Agreement pending the final resolution of the dispute and the Parties shall not have the right to suspend their obligations under this Agreement by virtue of any dispute being referred to arbitration.

	
21.8

	
The arbitral proceedings shall be conducted in the English language. Nothing in this clause shall prejudice the rights of the parties hereto to seek injunctive relief from the courts. The award of the arbitrator shall be final and binding upon the Parties.

22.           SUBMISSION TO JURISDICTION

	
22.1

	
All the parties agree that the courts of Malaysia and the United States of America are to have jurisdiction to settle any disputes which may arise in connection with the legal relationships established by this Agreement (including, without limitation, claims for set-off or counterclaim) or otherwise arising in connection with this Agreement.

	
22.2

	
All the parties hereby irrevocably waive any objections on the ground of venue or forum non convenience or any similar grounds.

	
22.3

	
All the parties hereby irrevocably consent to service of process by mail or in any other manner permitted by the relevant law.

	
22.4

	
All the parties hereby consents generally in respect of any legal action or proceeding arising out of or in connection with this Agreement to the giving of any relief or the issue of any process in connection with such action or proceeding including, without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such action or proceeding.

	
22.5

	
All the parties hereby agree that the submission to the jurisdiction of the courts in Malaysia the United States of America referred to in this Clause shall not (and shall not be construed so as to) limit the right of any party to take proceedings against any of the other parties hereto in any other court of competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by applicable law.

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

  

Page 15

  

SCHEDULE 1

PARTICULARS OF VENDORS

	
Column A

	
Column B

	
Column C

 

	
Name of Vendor

	
Company No./

Passport No.

 

	
Address

	
Springhill Bioventures Sdn Bhd

(company incorporated in

Malaysia)

	
591528-H

	
Level 14, Uptown 1,

No. 1 Jalan SS21/58,

Damansara Uptown,

47400 Petaling Jaya,

Selangor, Malaysia.

 

	
THG Capital Sdn Bhd

(company incorporated in

Malaysia)

	
599993-V

	
50-07-02, 7th Floor,

Wisma UOA Damansara,

No. 50 Jalan Dungun,

Damansara Heights,

50490 Kuala Lumpur, Malaysia

 

	
Michelle Leanne Edythe Peake

(an Australian citizen)

	
XXXXXXX

	
No.XXXXX, Jalan Pantai Miami,

Miami Green Resort,

Batu Ferringhi,

11100 Penang, Malaysia

 

  

Page 16

  

SCHEDULE 2

PARTICULARS OF THE COMPANY

	
Name

	
ALPHA BIOLOGICS SDN BHD

 

	
Incorporation No.

 

	
606545-H

	
Registered Office:

 

	  
	
Authorised Share Capital

 

	
RM40,000,000 divided into 40,000,000 ordinary shares of RM1.00 each

 

	
Issued and Paid-up Share Capital (as at the date of this Agreement)

 

	
RM37,689,002 comprising 37,689,002 ordinary shares of RM1.00 each

	
Shareholders and

Percentage of Equity Held

 

	
1.Springhill Bioventures Sdn Bhd (64.78%)

2.THG Capital Sdn Bhd (35.02%)

3.Michelle Leanne Edythe Peake (0.20%)

 

	
Auditors

	
Ernst & Young of Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur, Malaysia

 

	
Business

 

	
Principal activity of the Company is manufacturing of monoclonal antibodies and other biological drugs

 

  

Page 17

  

SCHEDULE 3

SALE SHARES, PURCHASE PRICE & CONSIDERATION SHARES

	
Column A

	
Column B

	
Column C

	
Column D

 

	
Vendor

	
Sale Shares

	
Purchase Price

(USD)

	
Consideration Shares (new VPRO Stocks)

 

	
Springhill Bioventures Sdn Bhd

 

	
24,415,088

	
13,603,884.97

	
340,097,124

	
THG Capital Sdn Bhd

 

	
13,197,914

	
7,353,786.45

	
183,844,211

	
Michelle Leanne Edythe Peake

 

	
76,000

	
42,346.57

	
1,058,664

	
TOTAL

 

	
37,689,002

	
21,000,000.00

	
525,000,000

POST-COMPLETION SHAREHOLDING OF VIROPRO, INC

	
Column A

	
Column B

 

	
Column C

	
Shareholder

	
Common stocks in the capital of Viropro Inc

 

	
Percentage of Shareholding

	
Springhill Bioventures Sdn Bhd

 

	
340,097,124

	
38.60%

	
THG Capital Sdn Bhd

 

	
183,844,211

	
20.87%

	
Michelle Leanne Edythe Peake

 

	
1,058,664

	
0.12%

	
Other Shareholders

 

	
356,046,667

	
40.41%

	
TOTAL

 

	
881,046,667

	
100.00%

  

Page 18

  

IN WITNESS WHEREOF this Agreement has been entered into on the date appearing at the head hereof.

The Purchaser

	
SIGNED by

	
)

	  	
)

	
for and on behalf of

	
) /s/ Rajiv Datar

	
VIROPRO, INC.

	
)

	
in the presence of:

	
)

	  	  

/s/ Claude Gingras

 

The Vendors

	
SIGNED by

	
)

	  
	  	
)

	  
	
for and on behalf of

	
)

	  
	
SPRINGHILL BIOVENTURES SDN BHD

	  	
) /s/ Kim Tan

	
(Company No. 591528-H)

	
)

	  
	
in the presence of:

	
)

	  
	  	  	  
	  	  	  
	  	  	  
	
/s/ Michelle Elanne Edythe Peake

	  	  

  

Page 19

  

	
SIGNED by

	
)

	  	
)

	
for and on behalf of

	
)

	
THG CAPITAL SDN BHD

	
) /s/ M. Lei

	
(Company No. 599993-V)

	
)

	
in the presence of:

	
)

	  	  
	  	  
	  	  
	
/s/

	  

	
SIGNED by

	
)

	  	  	  
	
MICHELLE ELANNE EDYTHE PEAKE

	
) /s/ Michelle Elanne Edythe Peake

	  	  	  
	
in the presence of:

	
)

	  	  	  

 

 Page 20Exhibit 10.1

 

THIRD AMENDED AND RESTATED

 

ADVISORY MANAGEMENT AGREEMENT

 

This THIRD AMENDED AND RESTATED ADVISORY MANAGEMENT AGREEMENT (this “Agreement”) is entered into on this the 5th day of July, 2011, by and between BEHRINGER HARVARD OPPORTUNITY REIT II, INC., a Maryland corporation (the “Company”), and BEHRINGER HARVARD OPPORTUNITY ADVISORS II, LLC, a Texas limited liability company (the “Advisor”).

 

W I T N E S S E T H

 

WHEREAS, the Company and the Advisor previously entered that certain Second Amended and Restated Advisory Management Agreement dated February 15, 2010 that is currently effective through January 4, 2012 (the “Original Agreement”); and

 

WHEREAS, the Company is commencing the Follow-on Offering (as defined below) and in connection with such offering desires to amend certain terms of the Original Agreement; and

 

WHEREAS, the Company desires to continue to avail itself of the experience, sources of information, advice, assistance and certain facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of, the Board, all as provided herein; and

 

WHEREAS, the Advisor is willing to undertake to provide these services, subject to the supervision of the Board, on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby amend and restate the Original Agreement as follows:

 

ARTICLE ONE

 

DEFINITIONS

 

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

 

Acquisition Expenses.  A non-accountable acquisition expense reimbursement in the amount of: (i) 0.25% of the funds paid for purchasing an Asset, including any debt attributable to the Asset, plus 0.25% of the funds budgeted for development, construction or improvement in the case of Assets that the Company acquires and intends to develop, construct or improve or (ii) 0.25% of the funds advanced in respect of a loan or other investment.  In addition, to the extent the Advisor directly provides services formerly provided or usually provided by third parties, including without limitation accounting services related to the preparation of audits required by the Securities and Exchange Commission, property condition reports, title services, title insurance, insurance brokerage or environmental services related to the preparation of environmental assessments in connection with a prospective or completed investment (the “Additional Services”), the direct employee costs and burden to the Advisor of providing the Additional Services shall be Acquisition Expenses.  Acquisition Expenses also include any investment-

 

 

related expenses due to third parties in the case of a completed investment, including, but not limited to legal fees and expenses, travel and communications expenses, costs of appraisals, accounting fees and expenses, third-party brokerage or finder’s fees, title insurance, premium expenses and other closing costs.  Acquisition Expenses also include any payments made to (i) a prospective seller of an asset, (ii) an agent of a prospective seller of an asset, or (iii) a party that has the right to control the sale of an asset intended for investment by the Company that are not refundable and that are not ultimately applied against the purchase price for such asset (“Non-Refundable Payments”).

 

Acquisition Fees.  Any and all fees and commissions, exclusive of Acquisition Expenses but including the Acquisition and Advisory Fees, paid by any Person to any other duly qualified and licensed Person (including any fees or commissions paid by or to any duly qualified and licensed Affiliate of the Company or the Advisor) in connection with making or investing in Mortgages or other loans or the purchase, development or construction of an Asset, including, without limitation, real estate commissions, selection fees, investment banking fees, third party seller’s fees (to the extent the Company agrees to pay any such fees as part of an acquisition), Development Fees, Construction Fees, non-recurring management fees, loan fees, points or any other fees of a similar nature. Excluded shall be Development Fees and Construction Fees paid to any Person not affiliated with the Sponsor in connection with the actual development and construction of any Property.

 

Acquisition and Advisory Fees.  The fees payable to the Advisor pursuant to Section 3.01(b).

 

Advisor.  Behringer Harvard Opportunity Advisors II, LLC, a Texas limited liability company, any successor advisor to the Company, or any Person to which Behringer Harvard Opportunity Advisors II, LLC or any successor advisor subcontracts all or substantially all of its functions.

 

Affiliate or Affiliated.  As to any Person, (i) any Person directly or indirectly owning, controlling, or holding, with the power to vote, 10% or more of the outstanding voting securities of such other Person; (ii) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by such other Person; (iii) any Person, directly or indirectly, controlling, controlled by, or under common control with such other Person; (iv) any executive officer, director, trustee or general partner of such other Person; and (v) any legal entity for which such Person acts as an executive officer, director, trustee or general partner.

 

Articles of Incorporation.  The Articles of Incorporation of the Company filed with the Maryland State Department of Assessments and Taxation in accordance with the Maryland General Corporation Law, as amended or restated from time to time.

 

Assets.  Properties, Mortgages, loans and other direct or indirect investments (other than investments in bank accounts, money market funds or other current assets) owned by the Company, directly or indirectly through one or more of its Affiliates or Joint Ventures or through other investment interests.

 

Asset Management Fee.  The fee payable to the Advisor for day-to-day professional management services in connection with the Company and its investments in Assets pursuant to Section 3.01(a) of this Agreement.

 

Average Invested Assets.  For a specified period, the average of the aggregate book value of the Assets before deduction for depreciation, bad debts or other non-cash reserves, computed by taking the average of the values at the end of each month during the period.

 

Board.  The Board of Directors of the Company.

 

2

 

Bylaws.  The bylaws of the Company, as the same are in effect from time to time.

 

Change of Control.  Any (i) event (including, without limitation, issue, transfer or other disposition of Shares of capital stock of the Company or equity interests in the Partnership, merger, share exchange or consolidation) after which any “person” (as that term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company or the Partnership representing greater than 50% of the combined voting power of the Company’s or the Partnership’s then outstanding securities, respectively; provided, that, a Change of Control shall not be deemed to occur as a result of any widely distributed public offering of the Shares or (ii) direct or indirect sale, transfer, conveyance or other disposition (other than pursuant to clause (i)), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company or the Partnership, taken as a whole, to any “person” (as that term is used in Sections 13(d) and 14(d) of the Exchange Act).

 

Code.  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 the 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.  Behringer Harvard Opportunity REIT II, Inc., a corporation organized under the laws of the State of Maryland.  Unless the context clearly indicates otherwise, references to the Company shall include its direct and indirect subsidiaries, including the Partnership.

 

Construction Fee.  A fee or other remuneration for acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or to provide major repairs or rehabilitations on a Property.

 

Contract Purchase Price.  The amount (i) actually paid and/or budgeted in respect of the purchase, development, construction or improvement of a Property, (ii) of funds advanced with respect to a Mortgage or other loan or (iii) actually paid and/or budgeted in respect to the purchase of other Assets, in each case exclusive of Acquisition Fees and Acquisition Expenses but including any debt attributable to such acquired Assets.

 

Cost of Investment.  For each Asset, (i) with respect to an Asset wholly owned by the Company or any wholly owned subsidiary, the Fully Loaded Cost, and (ii) in the case of an Asset owned by any Joint Venture or in some other manner in which the Company is a co-venturer or partner or otherwise a co-owner, (A) the Fully Loaded Cost if the Company (or any subsidiary) controls the Asset; owns a majority interest, directly or indirectly, in the Asset; or provides a substantial amount of services in the acquisition, development, or management of the Asset (as determined by a majority of the Independent Directors) or (B) the portion of the Fully Loaded Cost that is attributable to the Company’s investment in the Joint Venture or other interest in such Asset if the Company does not control, own a majority of, or provide substantial services in the acquisition, development, or management of, the Asset.

 

Dealer Manager.  Behringer Securities LP, an Affiliate of the Advisor, or such Person selected by the Board to act as the dealer manager for an Offering.

 

Development Fee.  A fee for the packaging of an Asset, including the negotiation and approval of plans, and any assistance in obtaining zoning and necessary variances and financing for a specific development Property, either initially or at a later date.

 

Director.  A member of the Board.

 

3

 

Distributions.  Any dividends or other distributions of money or other property by the Company to Stockholders, including distributions that may constitute a return of capital for federal income tax purposes but excluding distributions that constitute the redemption of any Shares and excluding distributions on any Shares before their redemption.

 

Exchange Act.  The Securities Exchange Act of 1934, as amended from time to time, or any successor statute thereto.  Reference to any provision of the Exchange Act 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.

 

FINRA.  Financial Industry Regulatory Authority.

 

Follow-on Offering.  The Company’s second public offering of primary Shares pursuant to Registration Statement no. 333-169345.

 

Fully Loaded Cost.  The Contract Purchase Price of an Asset at the time of acquisition (exclusive of closing costs), plus the amount actually paid and/or budgeted for the development, construction or improvement of the Asset, inclusive of expenses related thereto, plus the amount of any subsequent debt attributable to such Asset.

 

Gross Proceeds.  The aggregate purchase price of all Shares sold for the account of the Company through an Offering, without deduction for Selling Commissions, volume discounts, any marketing support and due diligence expense reimbursement or Organization and Offering Expenses.  For the purpose of computing Gross Proceeds, the purchase price of any Share for which reduced Selling Commissions are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the Company are not reduced) shall be deemed to be the full amount of the Offering price per Share pursuant to the Prospectus for the Offering without reduction.

 

Independent Director.  A Director who is not on the date of determination, and within the last two years from the date of determination has not been, directly or indirectly associated with the Sponsor or the Advisor by virtue of (i) ownership of an interest in the Sponsor, the Advisor or any of their Affiliates, other than the Company, (ii) employment by the Sponsor, the Company, the Advisor or any of their Affiliates, (iii) service as an officer or director of the Sponsor, the Advisor or any of their Affiliates, other than as a Director of the Company, (iv) performance of services for the Company, other than as a Director of the Company, (v) service as a director or trustee of more than three real estate investment trusts organized by the Sponsor or advised by the Advisor, or (vi) maintenance of a material business or professional relationship with the Sponsor, the Advisor or any of their Affiliates.  Notwithstanding the foregoing, and consistent with (v) above, serving as a director of or receiving director fees from or owning an interest in a REIT or other real estate program organized by the Sponsor or advised or managed by the Advisor or its Affiliates shall not, by itself, cause a Director to be deemed associated with the Sponsor or the Advisor.  A business or professional relationship is considered material if the aggregate annual gross revenue derived by the Director from the Sponsor, the Advisor and their Affiliates (excluding fees for serving as a director of the Company or other REIT or real estate program organized or advised or managed by the Advisor or its Affiliates) exceeds five percent of either the Director’s annual gross income during either of the last two years or the Director’s net worth on a fair market value basis.  An indirect association with the Sponsor or the Advisor shall include circumstances in which a Director’s spouse, parent, child, sibling, mother- or father-in-law, son- or daughter-in-law, or brother- or sister-in-law is or has been associated with the Sponsor, the Advisor, any of their Affiliates, or the Company.

 

Initial Offering.  The Company’s initial public offering of primary Shares pursuant to Registration Statement no. 333-140887.

 

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Intellectual Property Rights.  All rights, titles and interests, whether foreign or domestic, in and to any and all trade secrets, confidential information rights, patents, invention rights, copyrights, service marks, trademarks, know-how, or similar intellectual property rights and all applications and rights to apply for such rights, as well as any and all moral rights, rights of privacy, publicity and similar rights and license rights of any type under the laws or regulations of any governmental, regulatory, or judicial authority, foreign or domestic and all renewals and extensions thereof.

 

Joint Ventures.  A legal organization formed to provide for the sharing of the risks and rewards in an enterprise co-owned and operated for mutual benefit by two or more business partners and established to acquire or hold Assets.

 

Listing or Listed.  The filing of a Form 8-A to register any class of the Company’s securities on a national securities exchange and an original listing application related thereto; provided, that the Shares shall not be deemed to be Listed until trading in the Shares shall have commenced on the relevant national securities exchange.

 

Mortgages.  In connection with mortgage financing provided, invested in or purchased by the Company, all of the notes, deeds of trust, security interests or other evidence of indebtedness or obligations, which are secured or collateralized by Real Property owned by the borrowers under such notes, deeds of trust, security interests or other evidence of indebtedness or obligations.

 

NASAA Guidelines.  The Statement of Policy Regarding Real Estate Investment Trusts adopted by the North American Securities Administrators Association, Inc. on May 7, 2007, and in effect on the date hereof.

 

Net Income.  For any period, the Company’s total revenues applicable to that period, less the total expenses applicable to the period other than additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of the Assets.

 

Offering.  Any public offering of Shares pursuant to an effective registration statement filed under the Securities Act, other than a public offering of Shares under a distribution reinvestment plan.

 

Organization and Offering Expenses.  Any and all costs and expenses incurred by and to be paid by the Company in connection with an Offering, the formation of the Company, and including the qualification and registration of the Offering and the marketing and distribution of its Shares, including, without limitation:  total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys); expenses for printing, engraving, amending registration statements and supplementing prospectuses; mailing and distribution costs; reimbursement of bona fide due diligence expenses of broker-dealers; salaries of employees while engaged in sales activity, such as preparing supplemental sales literature; telephone and other telecommunication costs; all advertising and marketing expenses, including the costs related to investor and broker-dealer meetings; charges of transfer agents, registrars, trustees, escrow holders, depositories and experts; filing, registration and qualification fees and taxes relating to the Offering under federal and state laws; and accountants’ and attorneys’ fees.

 

Partnership.  Behringer Harvard Opportunity OP II, LP, a Delaware limited partnership, through which the Company may own Assets or otherwise conduct its operations.

 

Person.  An individual, corporation, association, business trust, estate, trust, partnership, limited liability company or other legal entity.

 

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Property or Properties.  As the context requires, any, or all, respectively, of the Real Property acquired by the Company, either directly or indirectly (whether through Joint Ventures or other investment interests, regardless of whether the Company consolidates the financial results of these entities).

 

Proprietary Property.  All modeling algorithms, tools, computer programs, know-how, methodologies, processes, technologies, ideas, concepts, skills, routines, subroutines, operating instructions and other materials and aides used in performing the duties set forth in Section 2.02 that relate to advice regarding current and potential Assets, and all modifications, enhancements and derivative works of the foregoing.

 

Prospectus.  Prospectus has the meaning set forth in Section 2(a)(10) of the Securities Act, including a preliminary prospectus, an offering circular as described in Rule 253 of the General Rules and Regulations under the Securities Act or, in the case of an intrastate offering, any document by whatever name known, utilized for the purpose of offering and selling securities of the Company.

 

Real Property or Real Estate.  Land, rights in land (including leasehold interests), and any buildings, structures, improvements, furnishings, fixtures and equipment located on or used in connection with land and rights or interests in land.

 

REIT.  A corporation, trust, association or other legal entity (other than a real estate syndication) that is engaged primarily in investing in interests in Real Estate (including fee ownership and leasehold interests) or in loans secured by Real Estate or both in accordance with Sections 856 through 860 of the Code.

 

Sale or Sales.  (i) Any transaction or series of transactions whereby: (A) the Company or the Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including the lease of any Property consisting of a building only, and including any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (B) the Company or the Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Company or the Partnership in any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture directly or indirectly (except as described in other subsections of this definition) in which the Company or the Partnership as a co-venturer or partner sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including any event with respect to any Property which gives rise to insurance claims or condemnation awards; (D) the Company or the Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, conveys or relinquishes its interest in any Mortgage or other loan or portion thereof (including with respect to any Mortgage or other loan, all payments thereunder or in satisfaction thereof other than regularly scheduled interest payments of amounts owed pursuant to the Mortgage or other loan) and any event with respect to a Mortgage or other loan which gives rise to a significant amount of insurance proceeds or similar awards; or (E) the Company or the Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other Asset not previously described in this definition or any portion thereof, but (ii) not including any transaction or series of transactions specified in clause (i) (A) through (E) above in which the proceeds of such transaction or series of transactions are reinvested in one or more Assets within 180 days thereafter.

 

Securities Act.  The Securities Act of 1933, as amended from time to time, or any successor statute thereto.  Reference to any provision of the Securities Act shall mean the provision as in effect from

 

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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.

 

Selling Commissions.  Any and all commissions payable to underwriters, dealer managers or other broker-dealers in connection with the sale of Shares, including, without limitation, commissions payable to Behringer Securities LP.

 

Shares.  Any shares of the Company’s common stock, par value $0.0001 per share.

 

Soliciting Dealers.  Broker-dealers who are members of FINRA, or that are exempt from broker-dealer registration, and who, in either case, have executed participating broker or other agreements with the Dealer Manager to sell Shares.

 

Sponsor.  Sponsor has the meaning ascribed to such term in the Articles of Incorporation.

 

Stockholders.  The record holders of the Company’s Shares as maintained in the books and records of the Company or its transfer agent.

 

Termination Date.  The date of termination of this Agreement.

 

Texas Tax Code.  The Texas Tax Code as amended by Texas H.B. 3, 79th Leg., 3rd C.S. (2006).  Reference to any provision of the Texas Tax Code Act shall mean the provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable administrative rules as in effect from time to time.

 

Total Operating Expenses.  All costs and expenses paid or incurred by the Company, as determined under generally accepted accounting principles, which are in any way related to the operation of the Company or to Company business, including the Asset Management Fee, but excluding (i) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration, and other fees, printing and other expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves, (v) Acquisition Fees and Acquisition Expenses, (vi) real estate commissions on the Sale of Assets, and (vii) other fees and expenses connected with the acquisition, disposition, management and ownership of real estate interests, mortgage loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property).

 

Value of Investment.  For each Asset, if available, (i) with respect to an Asset wholly owned by the Company or any wholly owned subsidiary, the Asset’s value established by the most recent independent valuation report (without reduction for depreciation, bad debts or other non-cash reserves), and (ii) in the case of an Asset owned by any Joint Venture or in some other manner in which the Company is a co-venturer or partner or otherwise a co-owner, (A) the Asset’s value established by the most recent independent valuation report (without reduction for depreciation, bad debts or other non-cash reserves) if the Company (or any subsidiary) controls the Asset; owns a majority interest, directly or indirectly, in the Asset; or provides a substantial amount of services in the acquisition, development, or management of the Asset (as determined by a majority of the Independent Directors) or (B) the portion of the Asset’s value established by the most recent independent valuation report (without reduction for depreciation, bad debts or other non-cash reserves) that is attributable to the Company’s investment in the Joint Venture or other interest in such Asset if the Company does not control, own a majority of, or provide substantial services in the acquisition, development, or management of, the Asset.  Nothing in

 

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this definition is intended to obligate the Advisor to obtain independent valuations at any point in time beyond those specified in the Company’s Prospectus.

 

ARTICLE II

 

THE ADVISOR

 

2.01                        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.

 

2.02                        Duties of the Advisor.  The Advisor shall be deemed to be in a fiduciary relationship to the Company and its Stockholders.  Subject to Section 2.08, the Advisor undertakes to use its commercially reasonable best efforts to present to the Company potential investment opportunities consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the Board.  In performing its duties, subject to the supervision of the Board and consistent with the provisions of the Company’s most recent Prospectus for Shares, the Articles of Incorporation and Bylaws, the Advisor shall, either directly or by engaging a duly qualified and licensed Affiliate of the Advisor or other duly qualified and licensed Person:

 

(a)                                  provide the Company with research and economic and statistical data in connection with the Assets and investment policies;

 

(b)                                 manage the Company’s day-to-day operations and perform and supervise the various administrative functions reasonably necessary for the management and operations of the Company;

 

(c)                                  maintain and preserve the books and records of the Company, including stock books and records reflecting a record of the Stockholders and their ownership of the Company’s Shares;

 

(d)                                 investigate, select, and, on behalf of the Company, engage and conduct business with the duly qualified and licensed Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but not limited to duly qualified and licensed consultants, accountants, correspondents, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, builders, developers, property owners, mortgagors, property management companies, transfer agents and any and all agents for any of the foregoing, including duly qualified and licensed Affiliates of the Advisor, and duly qualified and licensed Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services, including but not limited to entering into contracts in the name of the Company with any of the foregoing;

 

(e)                                  consult with the officers and the Board and assist the Board in the formulation and implementation of the Company’s financial policies, and, as necessary, furnish the Board with advice and recommendations with respect to the making of investments consistent with the investment objectives and policies of the Company and in connection with any borrowings proposed to be undertaken by the Company;

 

(f)                                    subject to the provisions of Sections 2.02(h) and 2.03 hereof, (i) locate, analyze and select potential investments in Assets, (ii) structure and negotiate the terms and conditions of

 

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transactions pursuant to which investment in Assets will be made; (iii) make investments in Assets on behalf of the Company or the Partnership in compliance with the investment objectives and policies of the Company; (iv) arrange for financing and refinancing and make other changes in the asset or capital structure of, and dispose of, reinvest the proceeds from the sale of, or otherwise deal with the investments in, Assets; and (v) enter into leases of Property and service contracts for Assets with duly qualified and licensed Persons and, to the extent necessary, perform all other operational functions for the maintenance and administration of the Assets, including the servicing of Mortgages;

 

(g)                                 provide the Board with periodic reports regarding prospective investments in Assets;

 

(h)                                 obtain the prior approval of the Board (including a majority of all Independent Directors) for any and all investments in Assets;

 

(i)                                     negotiate on behalf of the Company with banks or lenders for loans to be made to the Company, negotiate on behalf of the Company with investment banking firms and broker-dealers, and negotiate private sales of Shares and other securities of the Company or obtain loans for the Company, as and when appropriate, but in no event in such a way so that the Advisor shall be acting as broker-dealer or underwriter; and provided, further, that any fees and costs payable to third parties incurred by the Advisor in connection with the foregoing shall be the responsibility of the Company;

 

(j)                                     obtain reports (which may be prepared by or for the Advisor or its Affiliates), where appropriate, concerning the value of investments or contemplated investments of the Company in Assets;

 

(k)                                  from time to time, or at any time reasonably requested by the Board, make reports to the Board of its performance of services to the Company under this Agreement;

 

(l)                                     assist the Company in arranging for all necessary cash management services;

 

(m)                               deliver to or maintain on behalf of the Company copies of all appraisals obtained in connection with the investments in Assets;

 

(n)                                 upon request of the Company, act, or obtain the services of duly qualified and licensed others to act, as attorney-in-fact or agent of the Company in making, acquiring and disposing of Assets, disbursing, and collecting the funds, paying the debts and fulfilling the obligations of the Company and retaining counsel or other advisors to assist in handling, prosecuting and settling any claims of the Company, including foreclosing and otherwise enforcing mortgage and other liens and security interests comprising any of the Assets;

 

(o)                                 supervise the preparation and filing and distribution of returns and reports to governmental agencies and to Stockholders and other investors and act on behalf of the Company;

 

(p)                                 provide office space, equipment and personnel as required for the performance of the foregoing services as Advisor;

 

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(q)                                 assist the Company in preparing all reports and returns required by the Securities and Exchange Commission, Internal Revenue Service and other state or federal governmental agencies; and

 

(r)                                    do all things necessary to assure its ability to render the services described in this Agreement.

 

2.03                        Authority of Advisor.

 

(a)                                  Pursuant to the terms of this Agreement (including the restrictions included in this Section 2.03 and in Section 2.06), and subject to the continuing and exclusive authority of the Board over the management of the Company, the Board hereby delegates to the Advisor the authority to (i) locate, analyze and select investment opportunities, (ii) structure the terms and conditions of transactions pursuant to which investments will be made or acquired for the Company or the Partnership, (iii) acquire Properties, make and acquire Mortgages and other loans and invest in other Assets in compliance with the investment objectives and policies of the Company, (iv) arrange for financing or refinancing of Assets, (v) enter into leases for the Properties and service contracts for the Assets with duly qualified and licensed non-affiliated and Affiliated Persons, including oversight of non-affiliated and Affiliated Persons that perform property management, acquisition, advisory, disposition or other services for the Company, (vi) oversee duly qualified and licensed property managers and other Persons who perform services for the Company, and (vii) arrange for, or provide, accounting and other record-keeping functions at the Asset level.

 

(b)                                 Notwithstanding the foregoing, any investment in Assets by the Company or the Partnership (as well as any financing acquired by the Company or the Partnership in connection with the investment), will require the prior approval of the Board (including a majority of the Independent Directors).

 

(c)                                  The prior approval of a majority of the Independent Directors and a majority of the Board not otherwise interested in the transaction will be required for each transaction with the Advisor or its Affiliates.

 

(d)                                 If a transaction requires approval by the Board, the Advisor will deliver to the Directors all documents required by them to properly evaluate the proposed transaction.

 

The Board may, at any time upon the giving of notice to the Advisor, modify or revoke the authority set forth in this Section 2.03.  If and to the extent the Board so modifies or revokes the authority contained herein, the Advisor shall henceforth submit to the Board for prior approval the proposed transactions involving investments in Assets as thereafter require prior approval; provided, however, that the modification or revocation shall be effective upon receipt by the Advisor and shall not be applicable to investment transactions to which the Advisor has committed the Company prior to the date of receipt by the Advisor of the notification.

 

2.04                        Bank Accounts.  The Advisor may establish and maintain one or more bank accounts in its own name for the account of the Company or in the name of the Company and may collect and deposit into any account or accounts, and disburse from any account or accounts, any money on behalf of the Company, under the terms and conditions as the Board may approve; provided that no funds of the Company or the Partnership shall be commingled nor shall any of such funds be commingled with the funds of the Advisor; and the Advisor shall from time to time render accountings of the collections and payments to the Board, its Audit Committee and the auditors of the Company.

 

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2.05                        Records; Access.  The Advisor shall maintain records of all its activities hereunder and make the records available for inspection by the Board and by counsel, auditors and authorized agents of the Company, at any time or from time to time during normal business hours.  The Advisor shall at all reasonable times have access to the books and records of the Company.

 

2.06                        Limitations on Activities.  Anything else in this Agreement to the contrary notwithstanding, the Advisor shall refrain from taking any action which, in its sole judgment made in good faith, would (a) adversely affect the status of the Company as a REIT, (b) subject the Company to regulation under the Investment Company Act of 1940, as amended, or (c) violate any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company, the Shares or any of the Company’s securities, or otherwise not be permitted by the Articles of Incorporation or Bylaws, except if the action shall be ordered by the Board, in which case the Advisor shall notify promptly the Board of the Advisor’s judgment of the potential impact of the action and shall refrain from taking the action until it receives further clarification or instructions from the Board. In such event the Advisor shall have no liability for acting in accordance with the specific instructions of the Board so given.  The Advisor, its directors, officers, employees and stockholders, and the directors, officers, employees and stockholders of the Advisor’s Affiliates shall not be liable to the Company or to the Board or Stockholders for any act or omission by the Advisor, its directors, officers, employees or stockholders, or for any act or omission of any Affiliate of the Advisor, its directors, officers or employees or stockholders except as provided in Section 5.02 of this Agreement.

 

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

 

2.08                        Other Activities of the Advisor.  Nothing herein contained shall prevent the Advisor or its Affiliates from engaging in other activities, including, without limitation, the rendering of advice to other Persons (including other REITs) 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 director, officer, employee, or stockholder 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 report to the Board 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.  The Advisor or its Affiliates shall promptly disclose to the Board knowledge of such condition or circumstance.  The Advisor shall inform the Board at least quarterly of the investment opportunities that have been offered to other programs with similar investment objectives sponsored by the Sponsor, Advisor, Director or their Affiliates.  If the Sponsor, Advisor, Director or Affiliates thereof have sponsored other investment programs with similar investment objectives which have investment funds available at the same time as the Company, it shall be the duty of the Board (including the Independent Directors) to adopt the method set forth in the Company’s most recent Prospectus for its Shares or another reasonable method by which investments are to be allocated to the competing investment entities and to use their best efforts to apply such method fairly to the Company.

 

2.09                        Payment of Certain Organization and Offering Expenses.  The Company shall pay directly all Organization and Offering Expenses considered underwriting compensation by FINRA.  Such payments, other than Selling Commissions and the dealer manager fee, shall apply towards the limit on 

 

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Organization and Offering Expenses reimbursable by the Company to the Advisor pursuant to Section 3.02(a)(i) below.

 

ARTICLE III

 

COMPENSATION AND REIMBURSEMENT OF SPECIFIED COSTS

 

3.01                        Fees.

 

(a)                                  Asset Management Fee.  The Company shall pay the Advisor a monthly Asset Management Fee on the 15th day of each month in an amount equal to 1/12 th of 1.0% of the sum of, for each and every Asset, the higher of the Cost of Investment or the Value of Investment.  The Advisor, in its sole discretion, may waive, reduce or defer all or any portion of the Asset Management Fee to which it would otherwise be entitled.

 

(b)                                 Acquisition and Advisory Fees.  The Company shall pay the Advisor a fee in the amount of 2.5% of the Contract Purchase Price of each Asset as Acquisition and Advisory Fees.  The total of all Acquisition Fees and any Acquisition Expenses shall be limited in accordance with the Articles of Incorporation.  Acquisition and Advisory Fees shall be paid as follows: (1) for real property (including properties where development/redevelopment is expected), at the time of acquisition, (2) for development/redevelopment projects (other than the initial acquisition of the real property), at the time a final budget is approved, and (3) for loans and similar assets (including without limitation mezzanine loans), quarterly based on the value of loans made or acquired.  In the case of a development/redevelopment project subject to clause (2) above, upon completion of the development/redevelopment project, the Advisor shall determine the actual amounts paid.  To the extent the amounts actually paid vary from the budgeted amounts on which the Acquisition and Advisory Fee was initially based, the Advisor will pay or invoice the Company for 2.5% of the budget variance such that the Acquisition and Advisory Fee is ultimately 2.5% of amounts expended on such development/redevelopment project.  The Advisor, in its sole discretion, may waive, reduce or defer all or any portion of the Acquisition and Advisory Fees to which it would otherwise be entitled.

 

(c)                                  Debt Financing Fee.  In the event of any debt financing obtained by or for the Company (including any refinancing of debt), the Company will pay to the Advisor a debt financing fee equal to 1% of the amount available under the financing.  The Debt Financing Fee includes the reimbursement of the specified cost incurred by the Advisor of engaging third parties to source debt financing, and nothing herein shall prevent the Advisor from entering fee-splitting arrangements with third parties with respect to the Debt Financing Fee.  The Advisor, in its sole discretion, may waive, reduce or defer all or any portion of the Debt Financing Fee to which it would otherwise be entitled.

 

(d)                                 Development Fee.  If the Advisor or an Affiliate provides the development services, the Company shall pay the Advisor Development Fees in amounts that are usual and customary for comparable services rendered to similar projects in the geographic market; provided, however, that a majority of the Independent Directors must determine that such Development Fees are fair and reasonable and on terms and conditions not less favorable than those available from unaffiliated third parties.  Development Fees will include the reimbursement of the specified cost incurred by the Advisor of engaging third parties for such services.  The Advisor, in its sole discretion, may waive, reduce or defer all or any portion of the Development Fee to which it would otherwise be entitled.  Notwithstanding the above, the Advisor may engage 

 

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(on behalf of the Company) third parties to provide development services pursuant to its authority under Section 2.03 and pay such third parties all applicable Development Fees.

 

3.02                        Expenses.

 

(a)                                  In addition to the compensation paid to the Advisor pursuant to Section 3.01 hereof and except as noted in Section 2.09 above, the Company shall pay directly or reimburse the Advisor for all of the costs and expenses paid or incurred by the Advisor that are in any way related to the operations of the Company or the business of the Company or the services the Advisor provides to the Company pursuant to this Agreement, including, but not limited to:

 

(i)                                     Organization and Offering Expenses;

 

(ii)                                  Acquisition Fees and Acquisition Expenses;

 

(iii)                               the actual cost of goods, services and materials used by the Company and obtained from Persons not affiliated with the Advisor, other than Acquisition Expenses, including brokerage fees paid in connection with the purchase and sale of Shares or other securities;

 

(iv)                              interest and other costs for borrowed money, including discounts, points and other similar fees;

 

(v)                                 taxes and assessments on income or property and taxes as an expense of doing business;

 

(vi)                              costs associated with insurance required in connection with the business of the Company or by the Board;

 

(vii)                           expenses of managing and operating Assets owned by the Company, whether or not payable to an Affiliate of the Advisor;

 

(viii)                        all expenses in connection with payments to the Board for attendance at meetings of the Board and Stockholders;

 

(ix)                                except as otherwise limited by the Articles of Incorporation, expenses associated with Listing or with the issuance and distribution of Shares and other securities of the Company, such as selling commissions and fees, advertising expenses, taxes, legal and accounting fees and Listing and registration fees, but excluding Organization and Offering Expenses;

 

(x)                                   expenses connected with payments of Distributions in cash or otherwise made or caused to be made by the Company to the Stockholders;

 

(xi)                                expenses of organizing, reorganizing, liquidating or dissolving the Company and the expenses of filing or amending the Articles of Incorporation;

 

(xii)                             expenses of any third party transfer agent for the Shares and of maintaining communications with Stockholders, including the cost of preparation, printing, and mailing annual reports and other Stockholder reports, proxy statements and other reports required by governmental entities;

 

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(xiii)                          personnel and related employment costs incurred by the Advisor or its Affiliates in performing the services described herein, including but not limited to reasonable salaries and wages, benefits and overhead of all employees directly involved in the performance of such services; provided, that no reimbursement shall be made for costs of such employees of the Advisor or its Affiliates to the extent that such employees perform services for which the Advisor receives a separate fee other than in connection with the Advisor directly providing the Additional Services; and

 

(xiv)                         audit, accounting and legal fees.

 

(b)                                 Expenses, other than Organization and Offering Expenses (which shall be reimbursed in accordance with subsection (c) herein), incurred by the Advisor on behalf of the Company and payable pursuant to this Section 3.02 shall be reimbursed no less than quarterly to the Advisor within 60 days after the end of each quarter.  The Advisor shall prepare a statement documenting the expenses of the Company during each quarter, including Organization and Offering Expenses, and shall deliver the statement to the Company within 45 days after the end of each quarter.

 

(c)                                  Selling Commissions and the dealer manager fee, which are included in the definition of Organization and Offering Expenses, shall be paid by the Company in accordance with Section 2.09 herein and the dealer manager agreement or similar agreement or agreements that the Company enters in connection with any Offering.  Organization and Offering Expenses (other than Selling Commissions and the dealer manager fee) incurred by the Advisor on behalf of the Company on or after January 1, 2009 and payable pursuant to Section 3.02(a) shall be reimbursed no less than quarterly to the Advisor within 60 days after the end of each quarter until an aggregate of $7,500,000 of such Organization and Offering Expenses have been reimbursed to the Advisor.  Thereafter, no such Organization and Offering Expenses shall be reimbursed to the Advisor until the Advisor has prepared and delivered to the Company within 90 days after the end of the year in which the Follow-on Offering ends a reconciliation of amounts of Organization and Offering Expenses incurred in connection with the Initial Offering and Follow-on Offering and the reimbursement obligations of the Company therefor under this Agreement, unless the terms of this Agreement are amended upon renewal to provide otherwise in connection with any subsequent Offering.  The Advisor, on behalf of itself and its Affiliates, and its and their respective successors and assigns, hereby waives the Company’s obligation to pay $3,500,000 of Organization and Offering Expenses (other than Selling Commissions and the dealer manager fee) incurred by the Advisor on behalf of the Company through December 31, 2008. Notwithstanding the foregoing, upon receipt of the reconciliation discussed above, the Company shall reimburse the Advisor for Organization and Offering Expenses (other than Selling Commissions and the dealer manager fee) to the extent such reimbursement would not cause the total amount spent by the Company on Organization and Offering Expenses (other than Selling Commissions and the dealer manager fee and excluding the $3,500,000 of Organization and Offering Expenses reimbursement waived by the Advisor as set forth above) to exceed 1.5% of the Gross Proceeds raised in the completed Initial Offering and Follow-on Offering; provided however, that the Advisor shall reimburse the Company for any Organization and Offering Expenses (other than Selling Commissions and the dealer manager fee) to the extent that such Organization and Offering Expenses (other than Selling Commissions and the dealer manager fee) paid by the Company exceed 1.5% of the Gross Proceeds raised in the completed Initial Offering and Follow-on Offering;

 

(d)                                 Notwithstanding anything to the contrary in this Section 3.02, (i) the Advisor will be responsible for paying all of the investment-related expenses that the Company or the Advisor 

 

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incurs that are due to third parties or in connection with providing the Additional Services with respect to investments the Company does not make other than Non-Refundable Payments and (ii) the Company shall be responsible for paying directly or reimbursing the Advisor for all Non-Refundable Payments.

 

3.03                        Other Services.  Should the Board request that the Advisor or any director, officer or employee thereof render services for the Company other than set forth in Section 2.02, the services shall be separately compensated at the rates and in the 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.

 

3.04                        Reimbursement to the Advisor.  The Company shall not reimburse the Advisor for Total Operating Expenses to the extent that Total Operating Expenses (including the Asset Management Fee), in the four consecutive fiscal quarters then ended (the “Expense Year”) exceed (the “Excess Amount”) the greater of 2% of Average Invested Assets or 25% of Net Income for that period of four consecutive fiscal quarters.  Any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company.  Reimbursement of all or any portion of the Total Operating Expenses that exceed the limitation set forth in the preceding sentence may, at the option of the Advisor, be deferred without interest and may be reimbursed in any subsequent Expense Year where such limitation would permit such reimbursement if the Total Operating Expense were incurred during such period.  Notwithstanding the foregoing, if there is an Excess Amount in any Expense Year and the Independent Directors determine that all or a portion of such excess was justified, based on unusual and nonrecurring factors which they deem sufficient, the Excess Amount may be reimbursed to the Advisor.  If the Independent Directors determine such excess was justified, then, after the end of any fiscal quarter of the Company for which there is an Excess Amount for the 12 months then ended paid to the Advisor, the Advisor, at the direction of the Independent Directors, shall cause such fact to be disclosed in the next quarterly report of the Company or in a separate writing and sent to the Stockholders within 60 days of such quarter end, together with an explanation of the factors the Independent Directors considered in determining that such Excess Amount was justified. Such determination shall be reflected in the minutes of the meetings of the Board.  The Company will not reimburse the Advisor or its Affiliates for services for which the Advisor or its Affiliates are entitled to compensation in the form of a separate fee.  All figures used in any computation pursuant to this Section 3.04 shall be determined in accordance with generally accepted accounting principles applied on a consistent basis.

 

3.05                        Audit of Advisor Payments.  It is the intention of the parties hereto to conform strictly to the applicable provisions hereof as to fees, reimbursements and any other amounts (the “Advisor Payments”) to be paid to the Advisor hereunder.  However, at any time, either party shall have the right, upon reasonable written notice, to engage a separate audit, on a confidential basis, of its own and the other party’s records, books and accounts in respect of Advisor Payments to ascertain whether the Advisor Payments were properly determined and paid.  An audit may be engaged only once in any 12-month period regardless of which party engages the audit.  Any such audit shall be conducted by an independent certified public accounting firm of recognized national standing designated by the party requesting the audit (the “Requesting Party”), other than the then current auditor of its or any of its Affiliates’ financial statements, and shall be conducted during regular business hours and in such a manner so as not to interfere with the Company’s or the Advisor’s regular business activities.  The Requesting Party shall bear the costs of the audit unless the audit conclusively reveals an underpayment or overpayment of Advisor Payments adverse to the Requesting Party in an amount greater than 10% of the total amount of Advisor Payments owed for the period being inspected, in which case the other party shall bear the costs of the audit.  Any auditor who is engaged to perform an audit shall not be compensated on a contingent basis or any other basis that would tend to give the auditor an interest in the outcome of the audit, and the auditor shall perform its audit on an impartial basis and certify in writing as 

 

15

 

such.  If the audit conclusively reveals an overpayment or underpayment of Advisor Payments, the Company or the Advisor shall promptly pay to the other party the amount of the overpayment or underpayment, as the case may be, without interest; provided, however, that in the event that the audit conclusively reveals an overpayment of Advisor Payments and the Advisor has at any time previously waived or forgiven in writing any Advisor Payments that it would otherwise have been entitled to hereunder (including the $3,500,000 waiver of Organization and Offering Expense reimbursement set forth in Section 3.02(c) above), the Company shall credit against the overpayment any amounts previously waived or forgiven, without interest, and the Advisor shall not be obligated to repay the Company to the extent that the overpayments do not exceed the aggregate of the waived or forgiven amounts not already so credited.  Any underpayment or overpayment under this Agreement shall not be a breach of this Agreement unless and until an audit performed in accordance with this Section 3.05 is completed and the party who may be obligated to make a payment hereunder as a result of such audit shall have failed to promptly make any required payment.

 

ARTICLE IV

 

TERM AND TERMINATION

 

4.01                        Term; Renewal.  Subject to Section 4.02 hereof, this Agreement shall continue in force until January 4, 2012.  Thereafter, this Agreement may be renewed for an unlimited number of successive one-year terms upon mutual consent of the parties.  It is the duty of the Board to 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.

 

4.02                        Termination.  This Agreement will automatically terminate upon Listing.  This agreement also may be terminated at the option of either party upon 60 days’ written notice without cause or penalty (if termination is by the Company, then the termination shall be upon the approval of a majority of the Independent Directors).  Notwithstanding the foregoing, the provisions of Section 4.03, Article V and Article VI shall continue in full force and effect and shall survive the termination or expiration of this Agreement.

 

4.03                        Payments to and Duties of Advisor upon Termination.

 

(a)                                  After the Termination Date, the Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to and receive from the Company within 30 days after the effective date of the termination all unpaid reimbursements of expenses, subject to the provisions of Section 3.04 hereof, and all contingent liabilities related to fees payable to the Advisor prior to termination of this Agreement.

 

(b)                                 The Advisor shall promptly upon termination:

 

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

 

(ii)                                  deliver to the Board 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 Board;

 

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(iii)                               deliver to the Board all assets, including the Assets, and documents of the Company then in the custody of the Advisor; and

 

(iv)                              cooperate with the Company and take all reasonable actions requested by the Company to provide an orderly management transition.

 

(c)                                  In the event that this Agreement is terminated or allowed to expire without renewal, which termination or expiration occurs prior to the Company’s or the Advisor’s reimbursement of Organization and Offering Expenses pursuant to the provisions of Section 3.02(c), the appropriate party, within 90 days after the end of the year in which the Follow-on Offering terminates, shall make the necessary reimbursement.

 

ARTICLE V

 

INDEMNIFICATION

 

5.01                        Indemnification by the Company.

 

(a)                                  The Company shall indemnify and hold harmless the Advisor and its Affiliates, including their respective 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 Maryland, the Articles of Incorporation and the NASAA Guidelines. Notwithstanding the foregoing, the Company shall not indemnify or hold harmless the Advisor or its Affiliates, including their respective officers, directors, partners and employees, for any liability or loss suffered by the Advisor or its Affiliates, including their respective officers, directors, partners and employees, nor shall it provide that the Advisor or its Affiliates, including their respective officers, directors, partners and employees, be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met: (i) the Advisor or its Affiliates, including their respective officers, directors, partners and employees, have determined, in good faith, that the course of conduct which caused the loss or liability was in the best interests of the Company; (ii) the Advisor or its Affiliates, including their respective officers, directors, partners and employees, were acting on behalf of or performing services of the Company; (iii) the liability or loss was not the result of negligence or misconduct by the Advisor or its Affiliates, including their respective officers, directors, partners and employees; and (iv) the indemnification or agreement to hold harmless is recoverable only out of the Company’s net assets and not from stockholders. Notwithstanding the foregoing, the Advisor and its Affiliates, including their respective officers, directors, partners and employees, shall not be indemnified by the Company for any losses, liability or expenses arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; and (iii) a court of competent jurisdiction approves a settlement of the claims against a particular 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 Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws.

 

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(b)                                 The Company may advance funds to the Advisor or its Affiliates, including their respective officers, directors, partners and employees, for legal expenses and other costs incurred as a result of any legal action for which indemnification is being sought is permissible only if all of the following conditions are satisfied: (i) the legal action relates to acts or omissions with respect to the performance of duties or services on behalf of the Company; (ii) the legal action is initiated by a third-party who is not a stockholder or the legal action is initiated by a stockholder acting in his or her capacity as such and a court of competent jurisdiction specifically approves such advancement; (iii) the Advisor or its Affiliates, including their respective officers, directors, partners and employees, undertake to repay the advanced funds to the Company together with the applicable legal rate of interest thereon, in cases in which the Advisor or its Affiliates, including their respective officers, directors, partners and employees, are found not to be entitled to indemnification.

 

(c)                                  Notwithstanding the provisions of this Section 5.01, the Advisor shall not be entitled to indemnification or be held harmless pursuant to this Section 5.01 for any activity which the Advisor shall be required to indemnify or hold harmless the Company pursuant to Section 5.02.

 

5.02                        Indemnification by 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 the 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, misfeasance, misconduct, gross negligence or reckless disregard of its duties, but the Advisor shall not be held responsible for any action of the Board in following or declining to follow any advice or recommendation given by the Advisor.

 

ARTICLE VI

 

MISCELLANEOUS

 

6.01                        Assignment to an Affiliate.  This Agreement and any rights, duties, liabilities and obligations hereunder and the fees and compensation related thereto may be assigned by the Advisor, in whole or in part, to a duly qualified and licensed Affiliate of the Advisor without obtaining the approval of the Board.  Any other assignment shall be made only with the approval of a majority of the Board (including 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.  This Agreement shall not be assigned by the Company without the consent of the Advisor, except in the case of an assignment by the Company to a corporation or other organization which is a successor to all of the assets, rights and obligations of the Company, in which case the successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company is bound by this Agreement.  This Agreement shall be binding on successors to the Company resulting from a Change of Control or sale of all or substantially all the assets of the Company or the Partnership, and shall likewise be binding upon any successor to the Advisor.

 

6.02                        Relationship of Advisor and Company.  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 or impose any liability as such on either of them.

 

6.03                        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 

 

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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 Directors and to the Company:
    	
 
    	
Behringer   Harvard Opportunity REIT II, Inc.
    
	
 
    	
 
    	
15601   Dallas Parkway
    
	
 
    	
 
    	
Suite 600
    
	
 
    	
 
    	
Addison,   Texas 75001
    
	
 
    	
 
    	
 
    
	
To   the Advisor:
    	
 
    	
Behringer   Harvard Opportunity Advisors II, LLC
    
	
 
    	
 
    	
15601   Dallas Parkway
    
	
 
    	
 
    	
Suite 600
    
	
 
    	
 
    	
Addison,   Texas 75001
    

 

Either party shall, as soon as reasonably practicable, give notice in writing to the other party of a change in its address for the purposes of this Section 6.03.

 

6.04                        Modification.  This Agreement shall not be changed, modified, or amended, in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or permitted assignees.

 

6.05                        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.

 

6.06                        Choice of Law; Venue.  The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of Texas, and venue for any action brought with respect to any claims arising out of this Agreement shall be brought exclusively in Dallas County, Texas.

 

6.07                        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 signed by each of the parties hereto.

 

6.08                        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 the 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 the waiver.

 

6.09                        Gender; Number.  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.

 

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6.10                        Headings.  The titles and headings of sections and subsections 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.

 

6.11                        Execution in Counterparts.  This Agreement may be executed in multiple 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.

 

6.12                        Initial Investment.  The Advisor or one of its Affiliates has contributed $200,000 (the “Initial Investment”) in exchange for the initial issuance of Shares of the Company.  The Advisor or its Affiliates may not sell any of the Shares purchased with the Initial Investment while the Advisor acts in an advisory capacity to the Company.  The restrictions included above shall not apply to any Shares acquired by the Advisor or its Affiliates other than the Shares acquired through the Initial Investment.  Neither the Advisor nor its Affiliates shall vote any Shares they now own, or hereafter acquire, in any vote regarding removal of the Advisor or its Affiliates or the approval of any transaction between the Company and the Advisor or its Affiliates.

 

6.13                        Ownership of Proprietary Property.  The Advisor retains ownership of and reserves all Intellectual Property Rights in the Proprietary Property.  To the extent that the Company has or obtains any claim to any right, title or interest in the Proprietary Property, including without limitation in any suggestions, enhancements or contributions that Company may provide regarding the Proprietary Property, the Company hereby assigns and transfers exclusively to the Advisor all right, title and interest, including without limitation all Intellectual Property Rights, free and clear of any liens, encumbrances or licenses in favor of the Company or any other party, in and to the Proprietary Property. In addition, at the Advisor’s expense, the Company will perform any acts that may be deemed desirable by the Advisor to evidence more fully the transfer of ownership of right, title and interest in the Proprietary Property to the Advisor, including but not limited to the execution of any instruments or documents now or hereafter requested by the Advisor to perfect, defend or confirm the assignment described herein, in a form determined by the Advisor.

 

6.14                        Treatment Under Texas Margin Tax.  For purposes of the Texas margin tax, the Advisor’s performance of the services specified in this Agreement will cause the Advisor to conduct part of the active trade or business of the Company, and the compensation specified in Article III includes both the payment of management fees and the reimbursement of specified costs incurred in the Advisor’s conduct of the active trade or business of the Company.  Therefore, the Advisor and Company intend Advisor to be, and shall treat Advisor as, a “management company” within the meaning of Section 171.0001(11) of the Texas Tax Code.  The Company and the Advisor will apply Sections 171.1011(m-1) and 171.1013(f)-(g) of the Texas Tax Code to the Company’s reimbursements paid to the Advisor pursuant to this Agreement of specified costs and wages and compensation.  The Advisor and the Company further recognize and intend that (i) as a result of the fiduciary relationship created by this Agreement and acknowledged in Section 2.02, reimbursements paid to the Advisor pursuant to this Agreement are “flow-though funds” that the Advisor is mandated by law or fiduciary duty to distribute, within the meaning of Section 171.1011(f) of the Texas Tax Code, and (ii) as a result of Advisor’s contractual duties under this Agreement, certain reimbursements under this Agreement are “flow-through funds” mandated by contract to be distributed within the meaning of Section 171.1011(g) of the Texas Tax Code.  The terms of this Agreement shall be interpreted in a manner consistent with the characterization of the Advisor as a “management company” as defined in Section 171.0001(11), and with the characterization of the reimbursements as “flow-though funds” within the meaning of Section 171.1011(f)-(g) of the Texas Tax Code.

 

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6.15                        Non-Solicitation.  During the period commencing on January 4, 2008 and ending one year following the termination of this Agreement, the Company shall not, without the Advisor’s prior written consent, directly or indirectly, (i) solicit or encourage any person to leave the employment or other service of the Advisor or its affiliates or (ii) hire, on behalf of the Company or any other person or entity, any person who has left the employment within the one year period following the termination of that person’s employment the Advisor or its affiliates.  During the period commencing on January 4, 2008 and ending one year following the termination of this Agreement, the Company shall not, whether for its own account or for the account of any other person, firm, corporation or other business organization, intentionally interfere with the relationship of the Advisor or it affiliates with, or endeavor to entice away from the Advisor or its affiliates, any person who during the term of the Agreement is, or during the preceding one-year period was, a customer of the Advisor or its affiliates.

 

[The remainder of this page intentionally blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Third Amended and Restated Advisory Management Agreement as of the date first above written.

 

	
 
    	
BEHRINGER HARVARD OPPORTUNITY REIT II, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Robert S. Aisner
    
	
 
    	
 
    	
Robert   S. Aisner
    
	
 
    	
 
    	
President   and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
BEHRINGER HARVARD OPPORTUNITY ADVISORS II, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Gerald J. Reihsen, III
    
	
 
    	
 
    	
Gerald   J. Reihsen, III
    
	
 
    	
 
    	
Executive   Vice President — Corporate Development & Legal and Assistant   Secretary
    

 

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