Exhibit 1.1
BRE PROPERTIES, INC.
$125,000,000
Common Stock
($0.01 par value per share)
EQUITY DISTRIBUTION
AGREEMENT
May 14, 2009
Goldman, Sachs &
Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
BRE Properties, Inc., a Maryland
corporation (the “ Company ”), confirms its
agreement (this “ Agreement ”) with Goldman,
Sachs & Co. (the “ Manager ”), as
follows:
SECTION 1. Description of
Securities . The Company proposes to issue and sell through or
to the Manager, as sales agent and/or principal, shares of the
Company’s common stock, $0.01 par value per share (the
“ Common Stock ”), having an aggregate offering
price of up to $125,000,000 (the “ Shares ”),
from time to time during the term of this Agreement and on the
terms set forth in Section 3 of this Agreement. For purposes
of selling the Shares through the Manager, the Company hereby
appoints the Manager as exclusive agent of the Company for the
purpose of soliciting purchases of the Shares from the Company
pursuant to this Agreement and the Manager agrees to use its
reasonable efforts to solicit purchases of the Shares on the terms
and subject to the conditions stated herein. The Company hereby
reserves the right to issue and sell shares of Common Stock other
than through or to the Manager during the term of this Agreement on
terms that it deems appropriate.
SECTION 2. Representations and
Warranties of the Company . The Company represents and warrants
to and agrees with the Manager, as of the date hereof and at each
Time of Sale, Settlement Date and Representation Date (as such
terms are defined below), that:
(a) The Company prepared and filed
with the Securities and Exchange Commission (the “
Commission ”) an automatic shelf registration
statement on Form S-3ASR (File No. 333-147238) (the
“ registration statement ”) which has heretofore
become, and is, effective under the Securities Act of 1933, as
amended, and the rules and regulations thereunder (collectively
called the “ Act ”); the registration statement
and the Prospectus Supplement (as defined below) set forth the
terms of an offering, sale and plan of distribution of shares of
the Common Stock and/or other securities of the Company and contain
or incorporate therein by reference additional information
concerning the Company and its business; no stop order of the
Commission preventing or suspending the use of any Basic Prospectus
(as defined below), the Prospectus Supplement (as defined below),
the Prospectus (as defined below) or any Issuer Free
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Writing Prospectus (as defined in
Section (g) below), or the effectiveness of the Registration
Statement (as defined below), has been issued or is in effect,
and no proceeding for that purpose has been initiated or threatened
by the Commission, and no notice of objection of the Commission to
the use of the Registration Statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the Act has been
received by the Company. As filed, the Prospectus contains all
information required by the Act and the rules thereunder, and,
except to the extent the Manager shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to the Manager prior to the execution of this Agreement
or prior to any time this representation is repeated or deemed to
be made. Except where the context otherwise requires, “
Registration Statement ,” as used herein, means the
registration statement, as amended at the time of such registration
statement’s effectiveness for purposes of Section 11 of
the Act (the “ Effective Time ”), as such
section applies to the Manager, including (i) all documents
filed as a part thereof or incorporated or deemed to be
incorporated by reference therein, (ii) any information
contained or incorporated by reference in a prospectus relating to
this offering filed with the Commission pursuant to
Rule 424(b) under the Act, to the extent such information is
deemed, pursuant to Rule 430B or Rule 430C under the Act,
to be part of the registration statement at the Effective Time, and
(iii) any registration statement filed to register the offer
and sale of Shares pursuant to Rule 462(b) under the Act.
Except where the context otherwise requires, “ Basic
Prospectus ,” as used herein, means the base prospectus
filed as part of each Registration Statement, together with any
amendments or supplements thereto as of the date of this Agreement.
Except where the context otherwise requires, “ Prospectus
Supplement ,” as used herein, means the final prospectus
supplement, relating to the Shares, filed by the Company with the
Commission pursuant to Rule 424(b) under the Act on or before
the second business day after the date hereof (or such earlier time
as may be required under the Act), in the form furnished by the
Company to the Manager in connection with the offering of the
Shares. Except where the context otherwise requires, “
Prospectus ,” as used herein, means the Prospectus
Supplement together with the Basic Prospectus attached to or used
with the Prospectus Supplement. “ Permitted Free Writing
Prospectuses ,” as used herein, means the documents
listed on Schedule A attached hereto. Any reference
herein to the registration statement, the Registration Statement,
any Basic Prospectus, the Prospectus Supplement, the Prospectus or
any Permitted Free Writing Prospectus shall be deemed to refer to
and include the documents, if any, incorporated by reference, or
deemed to be incorporated by reference, therein (the “
Incorporated Documents ”), including, unless the
context otherwise requires, the documents, if any, filed as
exhibits to such Incorporated Documents. Any reference herein to
the terms “ amend ,” “ amendment
” or “ supplement ” with respect to the
Registration Statement, any Basic Prospectus, the Prospectus
Supplement, the Prospectus or any Permitted Free Writing Prospectus
shall be deemed to refer to and include the filing of any document
under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the “
Exchange Act ”) on or after the initial effective date
of the Registration Statement, or the date of such Basic
Prospectus, the Prospectus Supplement, the Prospectus or such
Permitted Free Writing Prospectus, as the case may be, and deemed
to be incorporated therein by reference.
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(b) To the extent that the
Registration Statement is not available for the sales of the Shares
as contemplated by this Agreement or the Company is not a
“well-known seasoned issuer” as defined in Rule 405
under the Act or otherwise is unable to make the representations
set forth in Section 2(c) at any time when such
representations are required, the Company shall file a new
registration statement with respect to any additional Common Stock
necessary to complete such sales of the Shares and shall cause such
registration statement to become effective as promptly as
practicable. After the effectiveness of any such registration
statement, all references to “Registration Statement”
included in this Agreement shall be deemed to include such new
registration statement, including all documents incorporated by
reference therein pursuant to Item 12 of Form S-3, and all
references to “Base Prospectus” included in this
Agreement shall be deemed to include the final form of prospectus,
including all documents incorporated therein by reference, included
in any such registration statement at the time such registration
statement became effective.
(c) (i) At the time of filing the
Registration Statement, (ii) at the time of the most recent
amendment thereto for the purposes of complying with
Section 10(a)(3) of the Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to
Sections 13 or 15(d) of the Exchange Act or form of prospectus),
(iii) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c)
under the Act) made any offer relating to the Shares in reliance on
the exemption in Rule 163, and (iv) at the execution of this
Agreement and on each such time this representation is repeated or
deemed to be made (with such date being used as the determination
date for purposes of this clause (iv)), the Company was or is (as
the case may be) a “well-known seasoned issuer” as
defined in Rule 405 under the Act. The Company agrees to pay the
fees required by the Commission relating to the Shares within the
time required by Rule 456(b)(1) under the Act without regard to the
proviso therein and otherwise in accordance with Rules 456(b) and
457(r) under the Act.
(d) (i) At the respective times the
Registration Statement and each amendment thereto became effective,
at each deemed effective date with respect to the Manager pursuant
to Rule 430B(f)(2) under the Act, as of the time of each sale
of Shares pursuant to this Agreement (each, a “ Time of
Sale ”) and Settlement Date (as defined in
Section 3(vi)), if any, and at all times during which a
prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Shares, the
Registration Statement complied and will comply in all material
respects with the requirements of the Act and the rules and
regulations under the Act; (ii) the Basic Prospectus, complies
or will comply, at the time it was or will be filed with the
Commission, complies as of the date hereof (if filed with the
Commission on or prior to the date hereof) and, as of each Time of
Sale, if any, and at all times during which a prospectus is
required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Shares, in all material respects with
the rules and regulations under the Act; (iii) each of the
Prospectus Supplement and the Prospectus will comply, as of the
date that it is filed with the Commission, the date of the
Prospectus Supplement, as of each Time of Sale and Settlement Date
(as defined in Section 3(vi)), if
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any, and at all times during which a
prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Shares, in all
material respects with the rules and regulations under the Act;
(iv) the Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements
of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and any further Incorporated Documents so
filed and incorporated by reference up to the later of the
termination of this Agreement or the end of the period in which a
prospectus relating to the Shares is required to be delivered under
the Act (whether physically or through compliance with Rule 172
under the Act or any similar rule), when they are filed with the
Commission, will conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of
the Commission thereunder, and will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and (v) each Permitted Free Writing Prospectus
complied in all material respects with the Act and has been filed
or will be filed in accordance with the Act (to the extent required
thereby).
(e) (i) at the Effective Time with
respect to the Registration Statement and each amendment thereto,
the Registration Statement did not and will not, during the term of
this Agreement and at all times during which a prospectus relating
to the Shares is required to be delivered under the Act (whether
physically or through compliance with Rule 172 under the Act or any
similar rule) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(ii) as of the execution of this Agreement, at each Time of
Sale and at each Settlement Date the Prospectus (as amended and
supplemented at such time) and any Permitted Free Writing
Prospectus, considered together (collectively, the “
General Disclosure Package ”), did not contain any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and (iii) as of its date, at any Settlement Date
(as defined in Section 3(vi)) and at all times during which a
prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act
or any similar rule), the Prospectus (together with any supplements
thereto) did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that
this representation and warranty shall not apply to any statement
or omission made in reliance upon and in conformity with
information furnished in writing to the Company by the Manager
expressly for use in the Prospectus or in the General Disclosure
Package.
(f) Each Permitted Free Writing
Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Shares
or until any earlier date that the Company notified or notifies the
Manager, did not, does not
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and will not include any material
information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, including any
document incorporated therein by reference and any prospectus
supplement relating to this offering deemed to be part thereof that
has not been superseded or modified, the General Disclosure Package
or the Prospectus; any electronic roadshow relating to the offering
of the Shares, when considered together with the General Disclosure
Package, as of the Time of Sale, did not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading.
(g) Other than the Basic Prospectus,
the Prospectus and any document not constituting a prospectus
pursuant to Section 2(a)(10)(a) of the Act or Rule 134
under the Act, the Company (including its agents and
representatives, other than the Manager) has not prepared, made,
used, authorized, approved or referred to and will not prepare,
make, use, authorize, approve or refer to any “written
communication” (as defined in Rule 405 under the Act)
that constitutes an offer to sell or solicitation of an offer to
buy any Shares required to be filed with the Commission without the
Manager’s consent (each such communication by the Company or
its agents and representatives being referred to herein as a
“ Issuer Free Writing Prospectus ”), other than
any Permitted Free Writing Prospectus.
(h) (A) (i) At the time of
filing the Registration Statement, (ii) at the time of the
most recent amendment thereto for the purposes of complying with
Section 10(a)(3) of the Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the Exchange Act or form of
prospectus), and (iii) at the time the Company or any person
acting on its behalf (within the meaning, for this clause only, of
Rule 163(c)) made any offer relating to the Shares in reliance
on the exemption of Rule 163 under the Act, the Company was
not an “ineligible issuer” as defined in Rule 405
of the Act; and (B) at the time of filing of the Registration
Statement, at the earliest time thereafter that the Company or
another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) under the Act) of the Shares and at
the date hereof, the Company was not and is not an
“ineligible issuer” as defined in Rule 405 under
the Act.
(i) The Registration Statement is
not the subject of a pending proceeding or examination under
Section 8(d) or 8(e) of the Act, and the Company is not the
subject of a pending proceeding under Section 8A of the Act in
connection with the offering of the Shares.
(j) The authorized, issued and
outstanding shares of capital stock of the Company are as set forth
in the General Disclosure Package, the Registration Statement and
the Prospectus (except for subsequent issuances, if any, of Common
Stock pursuant to employee benefit, employee and director stock
option and dividend reinvestment plans or upon exchange of any
exchangeable securities referred to in the General Disclosure
Package, the Registration Statement and the Prospectus or other
subsequent issuances of Common Stock referred to in the General
Disclosure Package, the Registration Statement and the Prospectus
(including shares of Common Stock issued
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in exchange for outstanding units in
BRE Property Investors LLC) and except for the issuance of the
Shares pursuant to this Agreement). The shares of issued and
outstanding Common Stock have been duly authorized and validly
issued, are fully paid and non-assessable, and none of the
outstanding shares of Common Stock was issued in violation of any
preemptive or other similar rights arising by operation of law,
under the charter or bylaws of the Company, under any agreement or
instrument to which the Company or any of its subsidiaries is a
party or otherwise. The Common Stock, the Company’s
authorized preferred stock, par value $0.01 per share (the “
Preferred Stock ”) and the Company’s charter and
bylaws conform and will conform in all material respects to all of
the respective statements relating thereto contained in the General
Disclosure Package, the Registration Statement and the Prospectus;
and the issuance of the Shares will not be subject to any
preemptive or other similar rights arising by operation of law,
under the charter or bylaws of the Company, under any agreement or
instrument to which the Company or any of its subsidiaries is a
party or otherwise. The Company’s Common Stock has been
registered pursuant to Section 12(b) of the Exchange Act, and
the outstanding shares of Common Stock are listed on the New York
Stock Exchange (“ NYSE ”), and the Company has
taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock from the NYSE, nor
has the Company received any notification that the Commission or
the NYSE is contemplating terminating such registration or
listing.
(k) The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Maryland; the Company has
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the General
Disclosure Package, the Registration Statement and the Prospectus;
the Company is duly qualified as a foreign corporation to transact
business and is in good standing in the State of Arizona, the State
of California, the State of Colorado and the State of Washington;
and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other
jurisdiction in which such qualification is required, except where
the failure to be so qualified or in good standing would not have a
material adverse effect on the condition (financial or other), or
the earnings, business, properties or results of operations of the
Company and its subsidiaries considered as one enterprise (“
Material Adverse Effect ”).
(l) Attached hereto as
Annex I is a true and complete list of all subsidiaries
of the Company and all other corporations, partnerships, joint
ventures, limited liability companies and other entities in which
the Company directly or indirectly owns capital stock or any other
equity or ownership interest. Annex I accurately sets
forth the jurisdiction of organization of, and the Company’s
approximate percentage ownership interest in, each such subsidiary
and other entity. The Company does not have any subsidiaries other
than those listed on Annex I and, except as set forth
in Annex I , the Company does not directly or
indirectly own any capital stock or other equity or other ownership
interests in any corporation, partnership, joint venture, limited
liability company or other entity. Annex I also
correctly indicates whether each such subsidiary and other entity
listed thereon is a corporation, partnership, limited liability
company or other type of entity.
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(m) Each subsidiary of the Company
has been duly organized and is validly existing and in good
standing under the laws of the jurisdiction of its organization,
has power and authority to own, lease and operate its property and
conduct its business as described in the General Disclosure Package
and the Prospectus, and is duly qualified to transact business and
is in good standing in each jurisdiction in which such
qualification is required, except where the failure to be so
qualified or in good standing would not have a Material Adverse
Effect; and (A) all of the issued and outstanding shares of
capital stock of each such subsidiary that is a corporation have
been duly authorized and validly issued, are fully paid and
non-assessable and, except as set forth on Annex I ,
are and, at all times since the date on which such subsidiary was
organized, have been owned by the Company, directly or through
wholly owned subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity, (B) all
of the issued and outstanding limited liability company interests
of each such subsidiary that is a limited liability company have
been duly authorized and validly issued (under applicable law and
the limited liability company agreement of such subsidiary), are
fully paid and non-assessable and, except as set forth on
Annex I , are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, and (C) all of the
issued and outstanding limited and general partnership interests of
each such subsidiary that is a partnership have been duly
authorized (if applicable) and validly issued and, except as set
forth on Annex I , are owned by the Company, directly
or through subsidiaries free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(n) The Company and its subsidiaries
own or possess or have obtained all material governmental licenses,
permits, consents, orders, approvals and other authorizations
necessary to lease or own, as the case may be, and to operate their
respective properties and to carry on their respective businesses
as contemplated in the General Disclosure Package, the Registration
Statement and the Prospectus.
(o) The Shares have been duly and
validly authorized by the Company and reserved for issuance and
sale pursuant to this Agreement by the Company, and, when duly
issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and non-assessable;
upon payment of the purchase price and delivery of the Shares in
accordance herewith, the Manager will receive good, valid and
marketable title to the Shares, free and clear of all security
interests, mortgages, pledges, liens, encumbrances, claims,
restrictions and equities; and the issuance of the Shares will not
be subject to preemptive or similar rights.
(p) The capital stock of the
Company, including the Shares, conforms in all material respects to
each description thereof, if any, contained or incorporated by
reference in the Registration Statement, any Basic Prospectus, the
Prospectus or any Permitted Free Writing Prospectus; and the
certificates for the Shares meet the requirements thereof under the
Company’s bylaws.
(q) This Agreement has been duly
authorized, executed and delivered by the Company.
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(r) The Company has not entered into
any other sales agency or distribution agreements or similar
arrangements with any agent or other representative in respect of
the Shares to be offered hereunder and the equity shelf program
established by this Agreement, but may enter into similar
arrangements with respect to other shares of its Common Stock from
time to time.
(s) Ernst & Young LLP, who
certified the financial statements and supporting schedules
incorporated by reference in the Registration Statement, the
General Disclosure Package and the Prospectus, is an independent
registered public accounting firm as required by the Act and the
rules and regulations of the Commission thereunder.
(t) The Common Stock is an
“actively-traded security” excepted from the
requirements of Rule 101 of Regulation M under the
Exchange Act by subsection (c)(1) of such rule.
(u) Except as disclosed in the
General Disclosure Package, there are no contracts, agreements or
understandings between the Company and any person that would give
rise to a valid claim against the Company or the Manager for a
brokerage commission.
(v) The Company has not taken,
directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result
in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares in contravention of
applicable law.
(w) The Company and its subsidiaries
own, possess or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other
intellectual property (collectively, “ intellectual
property rights” ) necessary to conduct the business now
operated by them, or presently employed by them.
(x) There is no action, suit or
proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the
Company, threatened against or affecting the Company or any of its
subsidiaries, which is required to be disclosed in the General
Disclosure Package (other than as disclosed therein) or which might
result in any Material Adverse Effect or which might materially and
adversely affect the properties or assets of the Company or any of
its subsidiaries; and there are no contracts or documents of the
Company or any of its subsidiaries which are required to be filed
as exhibits to the Registration Statement or any document
incorporated or deemed to be incorporated therein by the Act, the
Exchange Act or the rules and regulations of the Commission
thereunder which have not been so filed.
(y) The financial statements of the
Company included in the General Disclosure Package and the
Prospectus in each case, together with the related notes and
supporting schedules (if any), present fairly the financial
position of the Company and its
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consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the
periods shown, and such financial statements and related notes and
schedules have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a
consistent basis.
(z) Except as disclosed in the
General Disclosure Package and the Prospectus, since the date of
the latest audited financial statements included in the General
Disclosure Package and the Prospectus there has been no material
adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or
other), business, earnings, properties or results of operations of
the Company and its subsidiaries taken as a whole, and, except as
disclosed in or contemplated by the General Disclosure Package and
the Prospectus and except for regular quarterly dividends payable
on the Company’s common stock and preferred stock, there has
been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.
(aa) The Company is not and, after
giving effect to the offering and sale of the Shares as herein
contemplated and the application of the proceeds thereof as
described in the General Disclosure Package and the Prospectus,
will not be required to be registered as an “investment
company” as defined in the Investment Company Act of
1940.
(bb) Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws,
certificate of limited partnership, limited partnership agreement,
certificate of formation of a limited liability company, limited
liability company agreement or other similar organizational
certificates, instruments, agreements or documents (collectively,
“ Organizational Documents ”), as the case may
be; neither the Company nor any of its subsidiaries is in default
in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
it is a party or by which it or any of its property or assets may
be bound, except for such defaults which would not, individually or
in the aggregate, have a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the
Shares, the consummation of the transactions contemplated herein
and therein (including, without limitation, the issuance and sale
of the Shares), and compliance by the Company with its obligations
hereunder and thereunder, have been duly authorized by all
necessary corporate action and will not conflict with or constitute
a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any
Subject Agreement (as hereinafter defined) or any other contract,
indenture, mortgage, loan agreement, note, lease or other
instrument, in each case, which is material to the Company and to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the
provisions of the Organizational Documents of the Company or its
subsidiaries or any applicable law, administrative regulation or
administrative or court decree; and no consent, approval,
authorization or order of any court or governmental authority or
agency is required for
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the consummation by the Company of
the transactions contemplated by this Agreement, except for such as
may be required under state securities or Blue Sky laws of any
jurisdiction or real estate syndication laws in connection with the
distribution of the Shares by the Manager. “ Subject
Agreements ” means (i) the Amended and Restated
Credit Agreement by and among BRE Properties, Inc., as borrower,
the lenders party thereto and each of Wachovia Capital Markets, LLC
and RBS Securities Corporation, as joint lead arrangers and joint
book managers, Wachovia Bank, National Association, as
administrative agent, The Royal Bank of Scotland, plc, as
syndication agent, and Bank of America, N.A., JPMorgan Chase Bank,
N.A. and Deutsche Bank Securities, Inc., as co-documentation
agents, entered into as of September 18, 2007, together with
all guarantees entered into by any subsidiaries of the Company in
connection therewith, (ii) the Contribution Agreement dated as
of September 29, 1997, as amended (the “ Contribution
Agreement ”), between the TCR signatories named on
Schedule A thereto, the Company and BRE Property
Investors LLC, a Delaware limited liability company (the “
Operating Company ”), together with the guarantee
entered into by the Company pursuant to the Contribution Agreement,
as amended by Amendment No. 1 to the Contribution Agreement
dated November 18, 1997; (iii) the Amended and Restated
Limited Liability Company Agreement of the Operating Company, dated
as of November 18, 1997 (the “ LLC Agreement
”); and (iv) the Master Credit Facility Agreement by and
among BRE-FMCA, LLC and BRE-FMAZ, LLC, as borrowers, BRE
Properties, Inc., as guarantor, and Deutsche Bank Berkshire
Mortgage, Inc., as lender, entered into as of April 7, 2009.
All amendments, supplements and restatements of the Subject
Agreements are listed in clauses (i) through (iv) of the
preceding sentence. Except as otherwise described in the General
Disclosure Package and the Prospectus or with respect to the Credit
Agreement, no subsidiary of the Company is a guarantor of, or is a
party to or bound by any instrument or agreement pursuant to which
it has guaranteed or may be required to guarantee or cause another
subsidiary of the Company to guarantee, any borrowings or other
indebtedness of the Company. Except as otherwise described in the
General Disclosure Package and the Prospectus or with respect to
the Credit Agreement, the Company is not a party to or bound by any
instrument or agreement pursuant to which it is or may be required
to cause any of its subsidiaries to guarantee any borrowings or
other indebtedness of the Company.
(cc) Commencing with its taxable
year ended December 31, 1970, the Company has been organized
and has operated in conformity with the requirement for
qualification and taxation as a “real estate investment
trust” (a “ REIT ”) under the Internal
Revenue Code of 1986, as amended (the “ Code ”),
and its proposed method of operation will enable it to continue to
meet the requirements for qualification as a REIT under the Code,
including after consummation of the transactions contemplated by
the General Disclosure Package. The United States Federal Income
Tax Returns of the Company for all years of the Company ended on or
prior to December 31, 2005 are closed; and the Company has
filed United Stated Federal Income Tax Returns for each of its
fiscal years through and including the fiscal year ended
December 31, 2007.
(dd) The Company is eligible to use
a Form S-3 registration statement under the Act. The Company is
also eligible to use Form S-3 pursuant to the standards for that
Form in effect immediately prior to October 21, 1992. The
Company is subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act and files reports with the Commission
on the Electronic Data Gathering Analysis and Retrieval (EDGAR)
system.
10
(ee) The Company has full right,
power and authority to enter into this Agreement and to issue the
Shares from time to time.
(ff) Except as otherwise disclosed
in the General Disclosure Package and the Prospectus, (A) the
Company and its subsidiaries have good and marketable title in fee
simple to all real property and improvements described in the
General Disclosure Package and the Prospectus as being owned by the
Company (none of which is leased by the Company or any of its
subsidiaries, as lessee) and have acquired title insurance with
respect to each of the properties described in the General
Disclosure Package and the Prospectus as being owned by the Company
or its subsidiaries; (B) all liens, charges, encumbrances,
claims or restrictions on or affecting the real property and
improvements of the Company or any of its subsidiaries which are
required to be disclosed in the General Disclosure Package and the
Prospectus are disclosed therein; (C) neither the Company nor
any of its subsidiaries nor any lessee of any portion of the real
property or improvements of the Company or any of its subsidiaries
is in default under any of the leases pursuant to which the Company
or any of its subsidiaries leases (as lessor) its real property or
improvements and the Company knows of no event which, but for the
passage of time or the giving of notice, or both, would constitute
a default under any of such leases, except such defaults that would
not, individually or in the aggregate, have a Material Adverse
Effect; (D) no tenant under any of the leases pursuant to
which the Company or any of its subsidiaries leases any of its real
property or improvements has an option or right of first refusal to
purchase the premises demised under such lease; (E) all of the
real property and improvements of the Company and its subsidiaries
comply with all applicable codes and zoning laws and regulations,
except for such failures to comply which would not, individually or
in the aggregate, have a Material Adverse Effect; and (F) the
Company has no knowledge of any pending or threatened condemnation,
zoning change or other proceeding or action that would in any
manner affect the size of, use of, improvements on, construction
on, or access to any of the real property of the Company or any of
its subsidiaries, except such proceedings or actions that would
not, individually or in the aggregate, have a Material Adverse
Effect.
(gg) The Company maintains a system
of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance
with management’s general or specific authorizations;
(B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance
with management’s general or specific authorizations; and
(D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. Neither the Company nor any
of its subsidiaries nor any of their respective employees or agents
has made any payment of funds of the Company or any of its
subsidiaries or received or retained any funds in violation of any
law, rule or regulation which payment, receipt or retention of
funds is of a character required to be disclosed in the General
Disclosure Package and the Prospectus.
11
(hh) Except as otherwise disclosed
in the General Disclosure Package and the Prospectus (A) to
the best knowledge and information of the Company, neither the
Company nor any of its subsidiaries has at any time, and no other
party has at any time, handled, buried, stored, retained, refined,
transported, processed, manufactured, generated, produced, spilled,
allowed to seep, leak, escape or leach, or pumped, poured, emitted,
emptied, discharged, injected, dumped, transferred or otherwise
disposed of or dealt with Hazardous Materials (hereinafter defined)
on, to or from real property owned, leased or operated by the
Company or any of its subsidiaries or in which the Company or any
of its subsidiaries has any ownership interest, including without
limitation any subsurface soils and ground water (the “
Premises ”), except for such cases as (t) are not
required to be disclosed in the General Disclosure Package and the
Prospectus and (u) would not, individually or in the
aggregate, have a Material Adverse Effect, (B) to the best
knowledge and information of the Company, no seepage, leak, escape,
leach, discharge, injection, release, emission, spill, pumping,
pouring, emptying or dumping of Hazardous Materials from or to the
Premises has occurred, except for such cases as (v) having occurred
on, or affected, property previously owned by the Company,
subsequent to the Company’s disposition of such property,
(w) are not required to be disclosed in the General Disclosure
Package and the Prospectus and (x) would not, individually or
in the aggregate, have a Material Adverse Effect, (C) neither
the Company nor any of its subsidiaries has received notice of any
claim, or has knowledge of any occurrence or circumstance which
with notice or passage of time or both would likely give rise to a
claim, under or pursuant to any Environmental Statute (as
hereinafter defined), except for such claims as (y) are not
required to be disclosed in the General Disclosure Package and the
Prospectus and (z) would not, individually or in the
aggregate, have a Material Adverse Effect, and (D) to the best
of Company’s knowledge and information, no part of the
Premises is included or proposed for inclusion on the National
Priorities List issued pursuant to CERCLA (hereinafter defined) by
the United States Environmental Protection Agency (the “
EPA ”) and has not o
