Exhibit 1.1
BRANDYWINE REALTY
TRUST
DOCS ®
Financing Program
3,000,000 Common Shares of
Beneficial Interest,
$.01 par value
SALES
AGREEMENT
November 29,
2004
THIS SALES AGREEMENT (the “Agreement”) dated as
of November 29, 2004 between Brinson Patrick Securities
Corporation, having its principal office at 330 Madison Avenue, 9
th Floor, New York, New York 10017 (the “Sales
Manager”) and Brandywine Realty Trust, a real estate
investment trust formed under the laws of the State of Maryland
(the ”Company”).
WHEREAS , the Company desires to issue and sell through the
Sales Manager up to 3,000,000 (the “Maximum Amount”) of
its shares (the “Shares”) of common shares of
beneficial interest, par value $.01 per share (“Common
Shares”), on the terms set forth in Article II below. The
Maximum Amount shall be appropriately adjusted for share splits and
reverse splits.
IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Sales Manager agree as
follows:
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ARTICLE
I.
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
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1.1 For
purposes of this Agreement, unless the context requires to the
contrary, the term “Company” shall also include all
significant subsidiaries (as defined by Section 1-02 of Regulation
S-X) of the Company. The Company represents and warrants to, and
agrees with, the Sales Manager that as of the date of this
Agreement, as of the date the Registration Statement was declared
effective, and as of each date that the Sales Manager is selling
shares, that:
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(a) The
Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the “Act”), and the
rules and regulations thereunder (“Rules and
Regulations”). A registration statement on Form S-3 with
respect to, among other securities, the Shares, including a form of
prospectus, has been prepared by the Company in conformity with the
requirements of the Act and the Rules and Regulations and has been
filed with the Securities and Exchange Commission (the
“Commission”). Copies of such registration statement
and prospectus, any such amendment or supplement thereto and all
documents incorporated by reference therein that have been
delivered or made available to the Sales Manager on the
Commission’s internet website. Such registration statement,
as it may hereafter be amended, is referred to herein as the
“Registration Statement,” and the final form of
prospectus included in the Registration Statement for purposes of
offers and sales of the Shares contemplated herein, as amended or
supplemented from time to time, is referred to herein as the
“Prospectus.” Any reference herein to the Registration
Statement, the Prospectus, or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated
(or deemed to be incorporated) by reference therein, and any
reference herein to the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement or Prospectus shall be deemed to refer
to and include the filing after the execution hereof of any
document with the Commission deemed to be incorporated by reference
therein.
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(b) Each
part of the Registration Statement, when such part became or
becomes effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the
Commission and at each Settlement Date (as hereinafter defined),
conformed or will conform in all material respects with the
requirements of the Act and the Rules and Regulations; each part of
the Registration Statement, when such part became or becomes
effective, did not or will not
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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; and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with
the Commission and at each Settlement Date, did not or will not
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; except that the foregoing shall not apply to statements
in or omissions from any such document in reliance upon, and in
conformity with, written information furnished to the Company by or
on behalf of the Sales Manager, specifically for use in the
Registration Statement, the Prospectus or any amendment or
supplement thereto.
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(c) The
documents incorporated by reference in the Registration Statement
or the Prospectus, or any amendment or supplement thereto, when
they were or are filed with the Commission under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
did and will conform in all material respects with the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.
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(d) The
financial statements of the Company, together with the related
schedules and notes thereto, set forth or included in the
Registration Statement and Prospectus, fairly present the financial
condition of the Company as of the dates indicated and the results
of operations, changes in financial position, shareholders’
equity, and cash flows for the periods therein specified, in
conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise stated therein). The summary and selected financial and
statistical data included in the Registration Statement and the
Prospectus present fairly the information shown therein and, to the
extent based upon or derived from the financial statements, have
been compiled on a basis consistent with the financial statements
presented therein.
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(e) The
accountants who certified the financial statements and the
supporting schedules included in the Registration Statement are
and, during the periods covered by their reports, were qualified
and independent public accountants as required by Rule 2-01 of
Regulation S-X.
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(f) The
Company has been duly formed and is validly existing as a real
estate investment trust under and by virtue of the laws of the
State of Maryland and is in good standing with the State Department
of Assessments and Taxation of Maryland. The Company is duly
qualified and in good standing in each jurisdiction in which the
character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification
necessary (including every jurisdiction in which it owns or leases
real property), except for such jurisdictions where the failure to
so qualify would not have a Material Adverse Effect on the Company.
For purposes of this Agreement, “Material Adverse
Effect” means any adverse effect on the business, operations,
properties or financial condition of the Company that is (either
alone or together with all other adverse effects) material to the
Company, and any material adverse effect on the transactions
contemplated under this Agreement or any other agreement or
document contemplated hereby or thereby. Each of the
Company’s significant subsidiaries is validly existing as a
trust, corporation, limited liability company or partnership, as
applicable, in its respective jurisdiction of formation. Schedule
1.1(f) hereto identifies each of the Company’s subsidiaries
that is a significant subsidiary (as defined in Section 1-02 of
Regulation S-X) of the Company. All of the issued and outstanding
shares of beneficial interest, capital stock, limited liability
company interests or partnership interests, as applicable, of each
significant subsidiary has been duly authorized and validly issued,
is fully paid and nonassessable and (except as otherwise disclosed
in the Registration Statement and the Prospectus) is owned by the
Company, directly or indirectly, free and clear of any security
interest,
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mortgage,
pledge, lien, encumbrance, claim or equity. Except as disclosed in
the Registration Statement and the Prospectus, the Company does not
own, lease or license any asset or property or conduct any business
outside the United States of America. The Company has all requisite
real estate investment trust power and authority and all necessary
authorizations, approvals, consents, orders, licenses, certificates
and permits of and from all governmental orders or regulatory
bodies or any other person or entity, to own, lease, license and
operate its assets and properties and conduct its business as now
being conducted and as described in the Registration Statement and
the Prospectus; except for such authorizations, approvals,
consents, orders, licenses, certificates and permits the absence of
which would not have a Material Adverse Effect on the Company; and
no such authorization, approval, consent, order, license,
certificate or permit contains a materially burdensome restriction
other than as disclosed in the Registration Statement and the
Prospectus.
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(g) The
Company has good and marketable title to, or leasehold interests
in, all properties and assets (including, without limitation,
mortgaged assets) as described in the Registration Statement and
the Prospectus owned by the Company, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described
in the Registration Statement and the Prospectus and except such as
would not have a Material Adverse Effect on the Company. The
Company has such consents, easements, rights-of-way or licenses
(collectively, “rights-of-way”) from any person as are
necessary to conduct its business in the manner described in the
Registration Statement, except for those which if not obtained
would not, singly or in the aggregate, have a Material Adverse
Effect on the Company, and none of such rights-of-way contains any
restriction that is materially burdensome to the
Company.
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(h) There
is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body or
board pending or, to the knowledge of the Company, threatened
against, or involving the assets, properties or businesses of the
Company which, if resolved adversely to the Company, would
materially adversely affect the value or the operation of any such
assets or otherwise have a Material Adverse Effect on the Company
except as described in the Registration Statement.
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(i) The
Company maintains insurance (issued by insurers of recognized
financial responsibility) of the types and in the amounts generally
deemed adequate for its businesses and, to the knowledge of the
Company, consistent with insurance coverage maintained by similar
companies in similar businesses, including, but not limited to,
insurance covering real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism
and all other risks customarily insured against, all of which
insurance is in full force and effect.
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(j) Subsequent
to the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as described
therein, (i) there has not been any material adverse change in the
assets or properties, business, results of operations, or condition
(financial or otherwise) of the Company, whether or not arising
from transactions in the ordinary course of business; (ii) the
Company has not sustained any material loss or interference with
its assets, businesses or properties (whether owned or leased) from
fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree; (iii)
since the date of the latest balance sheet, included or
incorporated by reference in the Registration Statement and the
Prospectus, except as reflected therein, the Company has not
undertaken any liability or obligation, direct or contingent,
except such liabilities or obligations undertaken in the ordinary
course of business; and (iv) there has
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not been any
transaction that is material to the Company, except transactions in
the ordinary course of business or as otherwise disclosed in the
Registration Statement and the Prospectus.
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(k) There
is no document or contract of a character required to be described
in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement that is not described or
filed as required. Each document, instrument, contract and
agreement of the Company described in the Registration Statement or
the Prospectus or incorporated by reference therein or listed as
exhibits to the Registration Statement is in full force and effect
and is valid and enforceable by and against the Company in
accordance with their terms, assuming the due authorization,
execution and delivery thereof by each of the other parties thereto
except as otherwise disclosed in the Registration Statement or
Prospectus. The Company is not, nor to the knowledge of the Company
is any other party, in default in the observance or performance of
any term or obligation to be performed by it under any such
agreement, and no event has occurred which with notice or lapse of
time or both would constitute such a default, which default or
event would have a Material Adverse Effect. No default exists, and
no event has occurred which with notice or lapse of time or both
would constitute a default, in the due performance and observance
of any term, covenant or condition, by the Company of any other
agreement or instrument to which the Company is a party or by which
it or its properties or business may be bound or affected, which
default or event would have a Material Adverse Effect.
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(l) The
Company is not in violation of any term or provision of its
declaration of trust, by-laws or operating agreement, as
applicable. The Company is not in violation of any franchise,
license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation would have a
Material Adverse Effect.
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(m) Neither
the execution, delivery and performance of this Agreement by the
Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance
and sale by the Company of the Shares) will give rise to a right to
terminate or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision of,
or constitute a default (or an event which with notice or lapse of
time or both would constitute a default) under, or require any
consent or waiver under, or result in the execution or imposition
of any lien, charge, encumbrance, claim, security interest,
restriction or defect upon any properties or assets of the Company
pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party or by
which the Company is bound, or any of its properties or businesses
are bound, or any franchise, license, permit, judgment, decree,
order, statute, rule or regulation applicable to the Company or
violate any provision of the declaration of trust or by-laws of the
Company, except for such consents or waivers which have already
been obtained and are in full force and effect.
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(n) All
of the outstanding Common Shares of the Company have been duly
authorized and validly issued and are fully paid and nonassessable
and none of such shares were issued in violation of any preemptive
or other similar right. The Shares, when issued and sold pursuant
to this Agreement, will be duly authorized and validly issued,
fully paid and nonassessable and will not be issued in violation of
any preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and
there is no commitment, plan or arrangement to issue, any shares of
beneficial interest of the Company or any security convertible into
or exercisable or exchangeable for such shares of beneficial
interest, except for standard dividend and reinvestment and share
purchase plans and employee and trustee incentive plans and awards
made thereunder. The Shares conform in
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all material
respects to all statements relating thereto contained in the
Registration Statement and the Prospectus.
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(o) Subsequent
to the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as (x) described
or referred to therein, or (y) are not material (as to clauses (i)
and (ii) only), are consistent with past practice (as to clauses
(i) and (ii) only), and are publicly disclosed, and except for
certain non-material transactions supplementally disclosed by the
Company to the Sales Manager, the Company has not (i) issued any
securities or incurred any liability or obligation, direct or
contingent, except such liabilities or obligations incurred in the
ordinary course of business including, without limitation, debt
financing to acquire and develop properties, (ii) entered into any
transaction not in the ordinary course of business or (iii)
declared or paid any dividend or made any distribution on any of
its shares of beneficial interest (other than quarterly dividends
materially consistent with past practice) or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise
acquire any of its shares of beneficial interest.
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(p) Except
as disclosed in the Registration Statement and Prospectus, no
holder of any security of the Company has the right, which has not
been waived, to have any security owned by such holder included in
the Registration Statement.
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(q) All
necessary real estate investment trust action has been duly and
validly taken by the Company to authorize the execution, delivery
and performance of this Agreement and the issuance and sale of the
Shares by the Company. This Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes
and will constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms. Except for any “blue sky” filings or Stock
Exchange listing applications to be filed pursuant hereto, each
approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of
the transactions contemplated hereby and the issuance and sale of
the Shares by the Company has been obtained or made and is in full
force and effect. The Company will use its best reasonable efforts
to cause the Shares to be listed for trading on the Trading Market.
For purposes of this Agreement, the “Trading Market” is
(i) the New York StockExchange, Inc., and (ii) each other
securities exchange or market on which the Common Shares of the
Company trade or are admitted for trading.
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(r) The
Company has not incurred any liability for a fee, commission or
other compensation on account of the employment of a broker or
finder in connection with the transactions contemplated by this
Agreement other than as contemplated hereby or as described in the
Registration Statement.
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(s) The
Company is conducting its business in compliance with all
applicable laws, rules and regulations of the jurisdictions in
which it is conducting business, except where the failure to be so
in compliance would not have a Material Adverse Effect.
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(t) No
transaction has occurred between or among the Company and any of
its officers or trustees or any affiliate or affiliates of any such
officer or trustee that is required to be described in and is not
described in the Registration Statement and the
Prospectus.
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(u) The
Company has not taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Shares of the Company to
facilitate the sale or resale of any of the Shares.
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(v) The
Company has filed all federal, state, local and foreign tax returns
that are required to be filed through the date hereof (and will
file all such tax returns when and as required to be filed after
the date hereof), or has received extensions thereof, and has paid
all taxes shown on such returns to be due on or prior to the date
hereof (and will pay all taxes shown on such returns to be due
after the date hereof) and all assessments received by it to the
extent that the same are material and have become due except where
the failure to file such a return or pay such amount would not have
a Material Adverse Effect.
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(w) The
Company has met the qualification requirements for a “real
estate investment trust” during its taxable years ending on
or after December 31, 1999 and its proposed method of operations
will enable it to continue to meet the requirements for
qualification and taxation as a “real estate investment
trust” under the Internal Revenue Code of 1986, as amended
(the “Code”), assuming no change in the applicable
underlying law. The Company does not know of any event that would
cause or is likely to cause the Company to fail to qualify as a
“real estate investment trust” at any time.
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(x) The
Company is not an “investment company” within the
meaning of the Investment Company Act of 1940, as
amended.
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(y) The
Company’s systems of internal accounting controls taken as a
whole are sufficient to meet the broad objectives of internal
accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that
would be material in relation to the Company’s financial
statements; and, to the best of the Company’s knowledge,
neither the Company nor any employee or agent thereof has made any
payment of funds of the Company or received or retained any funds,
and no funds of the Company have been set aside to be used for any
payment, in each case in violation of any law, rule or
regulation.
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(z) The
Company is not involved in any labor dispute and, to the knowledge
of the Company, no such dispute has been threatened, except for
such disputes as would not have a Material Adverse Effect on the
Company, or subject the Company or its shareholders to any material
liability or disability.
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(aa) Except
as disclosed in the Registration Statement or the Prospectus, (i)
there has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes,
hazardous wastes or hazardous substances by the Company or any of
its subsidiaries (or to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now
or previously owned or leased by the Company or its subsidiaries in
violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit or which would require remedial
action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or
remedial action which would not have a Material Adverse Effect;
(ii) there has been no material spill, discharge, leak,
emission,
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injection,
escape, dumping or release of any kind onto such property or into
the environment surrounding such property of any toxic wastes,
solid wastes, hazardous wastes or hazardous substances due to or
caused by the Company or any of its subsidiaries, except for any
such spill, discharge, leak emission, injection, escape, dumping or
release which would not have a Material Adverse Effect; and (iii)
the terms “hazardous wastes,” “toxic
wastes” and “hazardous substances” shall have the
meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental
protection.
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ARTICLE
II.
SALE AND DELIVERY OF SECURITIES
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2.1 Sale
and Delivery of Securities.
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(a) On
the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell through the Sales
Manager, as agent, and the Sales Manager agrees to sell, as agent
for the Company, on a best efforts basis, up to the Maximum Amount
of the Shares during the term of this Agreement on the terms set
forth herein. The Shares will be sold from time to time as
described in the Registration Statement and Prospectus, in amounts,
and subject to price limitations, as directed by the Company and as
agreed to by the Sales Manager.
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(b) The
Company or the Sales Manager may, upon notice to the other party
hereto by telephone (confirmed promptly by telecopy), at any time
and from time to time suspend the offering of Shares;
provided , however , that such suspension shall not
affect or impair the parties’ respective obligations with
respect to the Shares sold hereunder prior to the giving of such
notice.
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(c) The
compensation to the Sales Manager for sales of Shares shall be at
the following commission rates for the Shares sold under this
Agreement: 2.5% of the gross sales price per share (“sales
proceeds”) for the Shares sold under this Agreement for the
first $15 million of aggregate sales proceeds raised in each year
(commencing with the date hereof); and 2.0% of the sales proceeds
for any additional aggregate sales proceeds raised in such year.
For purposes of this section 2.1(c), the first year shall end on
December 1, 2005, and each subsequent year shall end on the next
succeeding December 1 st . The remaining proceeds, after
further deduction for any transaction fees imposed by any
governmental or self-regulatory organization in respect to such
sale shall constitute the net proceeds to the Company for such
Shares (the “Net Proceeds”).
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(d) The
Company shall open and maintain a trading account (the
“Trading Account”) at a clearing agent designated by
the Sales Manager to facilitate the transactions contemplated by
this Agreement. The Company shall, with respect to each sale of
Shares, effect delivery of the applicable number of Shares to the
Trading Account, on or before the third business day (or such other
day as is industry practice for regular-way trading) following each
sale of the Shares (each, a “Settlement Date”). The Net
Proceeds from the sale of the Shares shall be available in the
Trading Account following the settlement of the sale on the
Settlement Date. The Sales Manager’s compensation shall be
withheld from the sales proceeds on each Settlement Date and shall
be paid to the Sales Manager.
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(e) At
each Settlement Date, the Company shall be deemed to have affirmed
each representation, warranty, covenant and other agreement
contained in this Agreement. Any obligation of the Sales Manager
under this Agreement shall be subject to the continuing accuracy of
the representations and warranties of the Company herein, to the
performance by the Company of its
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obligations
hereunder and to the continuing satisfaction of the additional
conditions specified in Article IV below.
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(f) If
the Company shall default on its obligation to deliver Shares on
any Settlement Date, the Company shall (i) hold the Sales Manager
harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) pay the Sales
Manager any commission to which it would otherwise be entitled
absent such default.
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ARTICLE
III.
COVENANTS OF THE COMPANY
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3.1 The
Company covenants and agrees with the Sales Manager
that:
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(a)
[INTENTIONALLY OMITTED]
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(b) During
the period in which a prospectus relating to the Shares is required
to be delivered under the Act, the Company will notify the Sales
Manager promptly of the time when any subsequent amendment to the
Registration Statement has become effective or any subsequent
supplement to the Prospectus has been filed and of any request by
the Commission for any amendment or supplement to the Registration
Statement or the Prospectus or for additional information; the
Company will prepare and file with the Commission, promptly upon
the Sales Manager’s reasonable request, any amendments or
supplements to the Registration Statement or Prospectus that, in
the Sales Manager’s reasonable opinion, may be necessary or
advisable in connection with the sale of the Shares pursuant to
this Agreement; the Company will not file any amendment or
supplement to the Registration Statement or Prospectus (other than
a supplement to the Prospectus that (i) relates solely to the
issuance of securities other than the Shares of the Company and
(ii) does not materially change the information about the Company
or its business, operations, properties or financial condition
disclosed in the Registration Statement or Prospectus previously
thereto (an “Excluded Supplement”)) unless a copy
t
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