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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE
ACT OF 1934
Date of report (Date of earliest event reported): August 13, 1996
(August 8, 1996)
ESSEX PROPERTY TRUST, INC.
(Exact name of Registrant as
Specified in Charter)
MARYLAND
(State or Other Jurisdiction
of Incorporation)
1-13106
(Commission File Number)
77-0369576
(IRS Employer Identification No.)
777 CALIFORNIA AVENUE
PALO ALTO, CA 94304
(415) 494-3700
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
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Item 5. Other Events
In connection with the public offering (the "Offering") by Essex Property
Trust, Inc., a Maryland corporation (the "Company") of 2,530,000 shares of the
common stock of the Company (the "Common Stock") (including 330,000 shares of
Common Stock to cover underwriter over-allotments), which Offering was priced on
August 8, 1996, and is scheduled for completion on August 14, 1996, the Company
has entered into the following agreements: (i) a Purchase Agreement dated as of
August 8, 1996 (the "Purchase Agreement"), among the Company, Essex Portfolio,
L.P., a California limited partnership, and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Raymond James & Associates, Inc., and Sutro & Co. Incorporated
(collectively, the "Lead Underwriters") as representatives of the several
underwriters (the Lead Underwriters and such other underwriters, collectively,
the "Underwriters") and (ii) a Pricing Agreement dated as of August 8, 1996 (the
"Pricing Agreement"), among the Company and the Lead Underwriters, as
representatives of the Underwriters. Pursuant to the Purchase Agreement, the
Company has agreed to sell and the Underwriters have agreed to purchase the
shares of Common Stock upon the terms and conditions set forth in the Purchase
Agreement and the Pricing Agreement, which agreements are incorporated herein by
reference. A copy of the Purchase Agreement is attached hereto as
Exhibit 1.1. Pursuant to the Pricing Agreement, the Company and the
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Underwriters agreed that the price per share for each share of Common Stock
subject to the Offering shall be $22.75 (of which $1.25 represents the
Underwriting Discount), upon the terms and conditions set forth in the Pricing
Agreement, which Pricing Agreement is incorporated herein by reference. A copy
of the Pricing Agreement is attached hereto as Exhibit 1.2.
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The foregoing description of the transactions contemplated by the Purchase
Agreement and the Pricing Agreement does not purport to be complete and is
qualified in its entirety by the exhibits which are attached hereto and
incorporated by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
EXHIBIT DESCRIPTION
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1.1 Purchase Agreement dated as of August 8, 1996, among Essex
Property Trust, Inc., Essex Portfolio, L.P., Merrill Lynch
& Co., and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Raymond James & Associates, Inc. and Sutro &
Co. Incorporated, as representatives of the several
underwriters.
1.2 Pricing Agreement dated as of August 8, 1996, among Essex
Property Trust, Inc., Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation, Raymond James &
Associates, Inc. and Sutro & Co. Incorporated, as
representatives of the several underwriters.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ESSEX PROPERTY TRUST, INC.
August 13, 1996 By: /s/ Mark J. Mikl
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Mark J. Mikl
Controller
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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1.1 Purchase Agreement dated as of August 8, 1996, among Essex
Property Trust, Inc., Essex Portfolio, L.P., Merrill Lynch
& Co., and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Raymond James & Associates, Inc. and Sutro &
Co. Incorporated, as representatives of the several
underwriters.
1.2 Pricing Agreement dated as of August 8, 1996, among Essex
Property Trust, Inc., Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation, Raymond James &
Associates, Inc. and Sutro & Co. Incorporated, as
representatives of the several underwriters.
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EXHIBIT 1.1
ESSEX PROPERTY TRUST, INC.
(a Maryland corporation)
Common Stock
PURCHASE AGREEMENT
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August 8, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
RAYMOND JAMES & ASSOCIATES, INC.
SUTRO & CO. INCORPORATED
as Representatives of the several underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Dear Sirs:
Essex Property Trust, Inc., a Maryland corporation (the "Company"),
hereby confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch"), Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), Raymond James & Associates, Inc. ("Raymond
James"), Sutro & Co. Incorporated ("Sutro") and each of the other Underwriters
named in Schedule A hereto (collectively, the "Underwriters," which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, DLJ, Raymond James and Sutro are acting as
representatives (in such capacity, Merrill Lynch, DLJ, Raymond James and Sutro
shall hereinafter be referred to as the "Representatives"), with respect to the
sale by the Company and the purchase by the Underwriters, acting severally and
not jointly, of the respective numbers of shares of common stock of the Company,
par value $.0001 per share (the "Common Stock"), set forth in said Schedule A
aggregating 2,200,000 shares of Common Stock, and with respect to the grant by
the Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 330,000
additional shares of Common Stock to cover over-allotments, in each case except
as may otherwise be provided in the Pricing Agreement, as hereinafter defined.
The
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aforesaid 2,200,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 330,000 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are collectively hereinafter called the "Securities."
Prior to the purchase and public offering of the Securities by the
several Underwriters, the Company and the Representatives, acting on behalf of
the several Underwriters, shall enter into an agreement substantially in the
form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may
take the form of an exchange of any standard form of written telecommunication
between the Company and the Representatives, and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Securities
will be governed by this Agreement, as supplemented by the Pricing Agreement.
From and after the date of the execution and delivery of the Pricing Agreement,
this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-30254) for the
registration of certain securities under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"). The Company has filed pre-effective amendments thereto
on May 2, 1996, May 28, 1996, June 5, 1996 and June 6, 1996 and will file such
additional amendments thereto and such amended or supplemental prospectuses as
may hereafter be required prior to the execution of the Pricing Agreement. Such
registration statement, as so amended, has been declared effective by the
Commission. Such registration statement (as amended, if applicable) including
the information, if any, deemed to be part thereof pursuant to Rule 430 A(b) of
the 1933 Act Regulations or Rule 434(d) of the 1933 Act Regulations, is referred
to herein as the "Registration Statement"; and the final prospectus and the
prospectus supplement relating to the offering of the Securities, in the form
first furnished to the Underwriters by the Company for use in connection with
the offering of the Securities, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the Pricing
Agreement; and provided, further, that if the Company elects to rely on Rule 434
of the 1933 Act Regulations, all references to the "Prospectus" shall be deemed
to include the final prospectus or preliminary prospectus, as the case may be,
and the term sheet or abbreviated term sheet (the "term sheet"), as the case may
be, in the form first furnished to the Underwriters by the Company in reliance
on Rule 434 of the 1933 Act Regulations, and all references in this Purchase
Agreement to the date of the Prospectus shall mean the date of the term sheet.
For purposes of this Agreement, all references to the Registration Statement,
the Prospectus or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system.
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All references in this Agreement to the financial statements and
schedules and other information that is "contained," "included" or "stated" in
the Registration Statement or the Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to include the filing
of any document under the 1934 Act which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be.
The terms "subsidiary" and "subsidiaries," as used herein, shall mean
Essex Portfolio, L.P., a California limited partnership (the "Operating
Partnership") and any other corporation, partnership or entity of which the
Company has the right or power, directly or indirectly, to elect a majority of
the board of directors in the case of a corporation or as to which the Company,
directly or indirectly, has a majority economic ownership interest in, in the
case of a partnership or entity.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
the Pricing Agreement has been executed and delivered.
SECTION 1. Representations and Warranties.
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(a) Each of the Company and the Operating Partnership represents
and warrants, jointly and severally, to each Underwriter as of the date hereof,
as of the date of the Pricing Agreement, as of the Closing Time (as defined
below) and, if applicable, as of each Date of Delivery (as defined below) (in
each case, a "Representation Date") as follows:
(i) Compliance with Registration Requirements. The
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Company meets the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the time the Registration Statement became effective
and at each Representation Date, the Registration Statement complied and
will comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not 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 not
misleading. The Prospectus, at each Representation Date, did not and will
not include an untrue statement of a material fact or omit to state a
material fact nec-
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essary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used in connection with the offering of the Securities, the Company will
comply with the requirements of Rule 434. The representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or the Prospectus made in reliance upon and
in conformity with information furnished to the Company in writing by any
Underwriter through the Representatives expressly for use in the
Registration Statement or the Prospectus.
(ii) Incorporated Documents. The documents incorporated
-----------------------
or deemed to be incorporated by reference in the Registration Statement and
the Prospectus, at the time they were or hereafter are filed with the
Commission (the "Incorporated Documents"), complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in the
Prospectus, at the date of the Prospectus and at each Representation Date,
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.
(iii) Independent Accountants. The accountants who
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certified the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements
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included in the Registration Statement and the Prospectus present fairly
the financial position of the respective entity or entities at the dates
indicated and the results of their operations for the periods specified;
except as otherwise stated in the Registration Statement, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis; the supporting
schedules included in the Registration Statement present fairly the
information required to be stated therein; and the pro forma financial
statements included in the Registration Statement and the Prospectus comply
in all material respects with the applicable requirements of Rule 11-02 of
Regulation S-X of the Commission and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of such
statements and the assumptions used in the preparation thereof are, in the
opinion of the Company, reasonable.
(v) No Material Adverse Change in Business. Since the
---------------------------------------
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated or contemplated
therein,
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(A) there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise or of the
Company's properties taken as a whole, whether or not arising in the
ordinary course of business, (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and (C) there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its stock.
(vi) Good Standing of the Company. The Company has been
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duly organized and is validly existing as a corporation under, and is in
good standing under, the laws of the State of Maryland with corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under this Agreement and the Pricing Agreement; and the
Company is duly qualified to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business.
(vii) Good Standing of Subsidiaries. Each subsidiary of
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the Company has been duly formed and is validly existing and in good
standing under the laws of the jurisdiction of its origin, has the power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and will be in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business; except as otherwise stated in the
Prospectus, all of the issued and outstanding capital stock or other
ownership interests in each such subsidiary have been duly authorized,
validly issued, are fully paid and non-assessable and are owned by the
entities described in the Prospectus, in each case free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(viii) Capitalization. The authorized and issued and
--------------
outstanding shares of all of the classes of the Company's capital stock are
as set forth in the Prospectus under "Capitalization"; the issued and
outstanding shares of all the classes of the Company's capital stock have
been duly autho rized and validly issued and are fully paid and non-
assessable; the Securities have been duly authorized for issuance and sale
to the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against payment of the
consideration set forth in the Pricing Agreement, will be validly issued,
fully paid and non-assessable; the Company
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has duly reserved a sufficient number of shares of Common Stock for
issuance upon exchange of outstanding Operating Partnership interests and
the conversion of the Company's 8.75% Convertible Preferred Stock, Series
1996A (the "Convertible Preferred Stock"); the shares of Common Stock
conform to all statements relating thereto contained in the Prospectus;
and, except for the preemptive rights of Tiger/Westbrook Real Estate Fund,
L.P. and Tiger/Westbrook Real Estate Co-Investment Partnership, L.P.
(collectively, "Tiger/Westbrook") as described in the Prospectus, the
issuance of the Securities is not subject to preemptive or other similar
rights.
(ix) Absence of Defaults and Conflicts. Neither the
---------------------------------
Company nor any of its subsidiaries is in violation of its organizational
documents, including, as applicable, its charter, bylaws, partnership,
trust and joint venture agreements; neither the Company nor any of its
subsidiaries is or will be, upon application of the proceeds of the
offering described in the Prospectus, in default in the performance or
observance of any material duty (including any material obligation,
agreement, covenant or condition) contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which it or
any of them is a party or by which it or any of them may be bound, or to
which any of their properties or assets is subject which default would have
a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or would, either immediately or
with the passage of time, allow any material indebtedness of the Company to
be accelerated; and the execution, delivery and performance of this
Agreement and the Pricing Agreement, and the consummation of the
transactions contemplated herein and therein and compliance by the Company
with its obligations hereunder and thereunder have been duly authorized by
all necessary 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 contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound,
which default would have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
or would, either immediately or with the passage of time, allow any
material indebtedness of the Company to be accelerated, nor will such
action result in any violation of the provisions of the charter or bylaws
of the Company or any applicable law, administrative regulation or
administrative or court decree.
(x) Due Authorization; Binding Agreement. This Agreement
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and the Pricing Agreement have been duly authorized, executed
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and delivered by the Company and the Operating Partnership, as applicable,
and constitute a binding agreement of the Company and the Operating
Partnership, enforceable against the Company and the Operating Partnership
in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights generally and the effect of general principles of equity.
(xi) Absence of Labor Disputes. No labor dispute with
-------------------------
the employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, which may reasonably be expected to result in
a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise.
(xii) Absence of Proceedings. 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, any of its subsidiaries or
any of their respective properties, which is required to be disclosed in
the Prospectus (other than as disclosed therein), or which might result in
any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or which might materially and
adversely affect the properties or assets thereof or the consummation of
the transactions contemplated by this Agreement; all pending legal or
governmental proceedings to which the Company or any of its subsidiaries is
a party or of which any of their respective properties or assets is the
subject which are not described in the Prospectus, including ordinary
routine litigation incidental to the business, are, considered in the
aggregate, not material; and there are no contracts or documents of the
Company or any of its subsidiaries required to be filed as exhibits to the
Registration Statement by the 1933 Act or the 1933 Act Regulations which
have not been so filed.
(xiii) REIT Status. The Company has been organized and
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operated in conformity with the requirements for qualification as a real
estate investment trust (a "REIT") under the Internal Revenue Code of 1986,
as amended (the "Code"), for its taxable years ended December 31, 1994 and
December 31, 1995, and the Company's present and proposed method of
operation will enable it to continue to meet the requirements for
qualification as a REIT under the Code.
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(xiv) NYSE Listing. The shares of Common Stock,
------------
including the Securities, have been approved for listing on the New York
Stock Exchange.
(xv) Absence of Further Requirements. No authorization,
-------------------------------
approval, consent or waiver of, or filing, registration or qualification
with, or notice to any court or governmental authority or agency or any
other person on the part of the Company is required to be made, obtained or
given in connection with the execution, delivery and performance of this
Agreement and the Pricing Agreement and the offering, issuance or sale of
the Securities hereunder, except (i) to the extent such will be made,
obtained or given prior to the Closing Time and (ii) such as may be
required under the 1933 Act or the 1933 Act Regulations, state securities
laws or the National Association of Securities Dealers, Inc.
(xvi) Possession of Licenses and Permits. The Company
----------------------------------
and its subsidiaries have complied with all laws applicable to the conduct
of their respective businesses and the ownership, use and operation of
their respective properties except as would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise. The Company and its subsidiaries, directly or
indirectly, possess such certificates, authorities or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them and proposed to be
conducted by them as described in the Prospectus, and neither the Company
nor any of its subsidiaries has received any notice of proceedings relating
to the revocation or modification of any such certificate, authority or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(xvii) Absence of Registration Rights. Except as
------------------------------
described in the Prospectus, there are no persons with registration or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(xviii) Properties. (A) Except as described in the
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Prospectus, the Company or its subsidiaries has good and marketable title
in fee simple to all real property and interests in real property owned by
each of them, including, but not limited to, the properties referred to
under "Properties" in the Prospectus (collectively, for purposes of this
Section 1(a)(xviii), the "Properties"); in each case, such title is free
and clear of all liens, encum-
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brances, claims, security interests and defects of any kind (including,
without limitation, options to purchase and rights of first refusal), other
than those referred to in the Prospectus or which would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise; (B) all liens, charges, encumbrances, claims,
or restrictions on or affecting the Properties which are required to be
disclosed in the Prospectus are disclosed therein; (C) neither the Company
(nor any of its subsidiaries) nor, to the best of the knowledge of the
Company (or any of its subsidiaries), any lessee under a lease relating to
any of the Properties is in default under any of the leases relating
thereto, and the Company (or any of its subsidiaries) does not know of any
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 have a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries, considered as one enterprise; (D) each of
the Properties is in compliance with all applicable codes, ordinances,
zoning laws and regulations, and neither the Company nor any of its
subsidiaries has received a notice of violation of any of the foregoing,
except for such failures to comply or violations which would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise; (E) neither the Company nor any
of its subsidiaries has any knowledge of any pending or threatened
condemnation or zoning change with respect to all or any portion of any of
the Properties, or of any other proceeding or action that will affect the
size of, use of, improvements on, construction on, or access to all or any
portion of any of the Properties, except such proceedings or actions that
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise; (F) the
maintenance, service, advertising and other like contracts and agreements
with respect to the ownership and operation of Properties other than any
property management agreement (the "Service Contracts") are in full force
and effect and have been entered into with third parties that are not
affiliated with the Company or any of its subsidiaries in the ordinary
course of business of the Company and its subsidiaries, as applicable, and
are incidental and reasonably related to the ownership and/or operation of
their respective Properties and neither the Company nor its subsidiaries is
in default under any of the Service Contracts except for such defaults that
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise; (G) all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or
any of its subsidiaries holds Properties are in full force and
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effect, and neither the Company nor any of its subsidiaries has any notice
of any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease; and (H) there exist no
liens, encumbrances, claims, security interests and defects of any kind on
the Company's or any subsidiary's ability to collect rents from its
Properties, except for such liens, encumbrances, claims, security interests
and defects that would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, and the Company's collection of such rents is in accordance
with all applicable laws, rules and regulations and neither the Company nor
any of its subsidiaries has received a notice of violation of any of the
foregoing, except for such violations that would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise.
(xix) Title Insurance. Each of the Operating Partnership
---------------
and its subsidiaries has title insurance on all of its properties and
assets in an amount at least equal to the purchase price of such property,
subject only to liens, encumbrances, claims, security interests and defects
that customarily encumber comparable properties; such title insurance is in
full force and effect; and no notice of cancellation has been received with
respect thereto and, to the knowledge of the Company, none is threatened.
(xx) Mortgages. The mortgages and deeds of trust
---------
encumbering the properties and assets described in the Prospectus are not
convertible into an equity ownership interest in the Company or any of its
subsidiaries (except for mortgages existing on the date hereof encumbering
the properties commonly known as the Shores and Bristol Commons) and
neither the Company nor any of its subsidiaries holds a participating
interest therein and such mortgages and deeds of trust are not cross-
defaulted or cross-collateralized to any property not owned or leased by
the Company or any of its subsidiaries.
(xxi) Stabilization. The Company has not taken and will
-------------
not take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation of
the price of the Common Stock.
(xxii) Compliance with Cuban Act. The Company has
-------------------------
complied and will comply with all of the provisions of Florida H.B. 1771,
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codified as Section 517.075 of the Florida statutes, and all regulations
promulgated thereunder relating to issuers doing business with Cuba.
(xxiii) Investment Company Act. Neither the Company nor
----------------------
any of its subsidiaries is subject to registration as an "investment
company" under the Investment Company Act of 1940.
(xxiv) Restrictions of Sales of Securities. The Company
-----------------------------------
and the Operating Partnership obtained the agreement of The Marcus &
Millichap Company and each of George M. Marcus, William A. Millichap, Keith
R. Guericke and Michael J. Schall to the effect that during a period of 90
days from the date of the Prospectus, such entity or persons will not,
without Merrill Lynch's prior written consent, directly or indirectly,
sell, offer to sell, grant any option for the sale of, or otherwise
transfer or dispose of (whether directly or synthetically), or enter into
any agreement to sell or otherwise dispose of (whether directly or
synthetically) any Common Stock or any security convertible into or
exchangeable into or exercisable for Common Stock, except for shares of
Common Stock issued (i) pursuant to this Agreement, (ii) pursuant to the
Company's stock option plans as described in the Prospectus and (iii)
pursuant to the terms of the Convertible Preferred Stock.
(xxv) Environmental Matters. Except as described in the
---------------------
Prospectus and except such violations as would not, singly or in the
aggregate, result in a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries, considered as one enterprise or otherwise
would require disclosure in the Prospectus, (A) neither the Company nor any
of its subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law and any judicial or administrative interpretation thereof including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental
11
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Law against the Company or any of its subsidiaries and (D) there are no
events or circumstances that might reasonably be expected to form the basis
of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting
the Company or any of its subsidiaries relating to any Hazardous Materials
or the violation of any Environmental Laws.
(xxvi) Taxes. (i) The Company has filed when due all
-----
Federal, state and local returns for "Taxes" (as hereinafter defined) that
are required to be filed by it for all taxable periods through and
including December 31, 1995; all such returns were prepared in the manner
required by applicable law and were true, correct and complete in all
material respects; and the Company has paid all Taxes reported as due in
such returns, and has paid any other taxes for which it may be liable; (ii)
the Company is not in material default in respect of the payment of Taxes
levied or assessed against it or any of its assets for all taxable periods
through the date hereof, and there are no material liens or claims for
Taxes outstanding upon or against or threatened upon or against it or any
of its assets (other than liens for Taxes which are not yet due and
payable); and (iii) no audit, inquiry, investigation or similar proceeding
with respect to Taxes is currently pending or threatened against the
Company or any of its assets with respect to which it may be liable for the
payment of Taxes, an adverse outcome of which would have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company.
As used in the above paragraph, the term "Tax" or "Taxes"
shall include all United States federal, state, local and foreign taxes,
assessments or other governmental charges (whether imposed directly or
through withholding), including any interest, penalties and additions to
taxes applicable thereto.
(b) Any certificate signed by any officer of the Company in his
or her capacity as an officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
-------------------------------------------
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in the Pricing Agreement, the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter (except
as otherwise provided in the Pricing Agreement), plus any additional
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<PAGE>
number of Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to all of the Option Securities at the purchase
price per share set forth in the Pricing Agreement, less an amount per share
equal to any dividends declared by the Company and payable on the Initial
Securities but not payable on the Option Securities. The option hereby granted
will expire 30 calendar days after the date of the Pricing Agreement and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by Merrill Lynch to the
Company setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to Closing Time, unless otherwise agreed by the Representatives and
the Company. If the option is exercised as to all or any portion of the Option
Securities, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities then being
purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities (except as otherwise provided in the Pricing Agreement), subject in
each case to such adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price and delivery of certificates
for the Initial Securities shall be made at the offices of Morrison & Foerster,
755 Page Mill Road, Palo Alto, CA 94304-1018, or at such other place as shall be
agreed upon by the Representatives and the Company, at 10:00 A.M. New York time
on the fourth business day (unless postponed in accordance with the provisions
of Section 10) after execution of the Pricing Agreement, or such other time not
later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time"). In addition, in the event that any or all
of the Option Securities are purchased by the Underwriters, payment of the
purchase price and delivery of certificates for such Option Securities shall be
made at the above-mentioned offices, or at such other place as shall be agreed
upon by the Representatives and the Company, on each Date of Delivery as
specified in the notice from Merrill Lynch to the Company. Payment shall be made
to the Company by wire transfer payable in same day funds, to the order of the
Company. Payment shall be against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Securities to be
purchased by them. Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names
as the Representatives may request in writing at least one full business day
before the Closing Time or the relevant Date of Delivery, as the
13
<PAGE>
case may be. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Merrill Lynch, individually
and not as representative of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose payment has not
been received by Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives not later than 10:00 A.M. on the last business day prior to
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants. The Company covenants with each Underwriter as
---------
follows:
(a) The Company will notify the Representatives immediately, and
confirm the notice in writing, (i) of the effectiveness of any post-effective
amendment to the Registration Statement filed after the date of this Agreement
in connection with the offering of the Securities, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any order by any state securities administrator suspending the
qualification of the Securities in such state or the initiation of any
proceedings for that purpose. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order or suspension is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company will give the Representatives notice of its
intention to file or prepare any post-effective amendment to the Registration
Statement filed after the date of this Agreement in connection with the offering
of the Securities or any amendment or supplement to the Prospectus (including
any revised prospectus which the Company proposes for use by the Underwriters in
connection with the offering of the Securities or any term sheet, whether or not
such revised prospectus or term sheet is required to be filed pursuant to Rule
424(b) or Rule 434 of the 1933 Act Regulations), will furnish the
Representatives with copies of any such amendment or supplement or term sheet a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file any such amendment or supplement or term sheet or use any
such prospectus to which the Representatives or counsel for the Underwriters
shall object.
(c) The Company will deliver to each of the Representatives one
signed copy of any post-effective amendment to the Registration Statement made
in connection with the offering of the Securities (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference
14
<PAGE>
therein) and will also deliver to the Representatives a conformed copy of the
Registration Statement as originally filed and of each amendment, post-effective
amendment or supplement or term sheet thereto (without exhibits) for each of
the Underwriters.
(d) The Company will furnish to each Underwriter, from time to
time during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) and the term sheet, if any, as such Underwriter may reasonably
request for the purposes contemplated by the 1933 Act or the 1934 Act or the
respective applicable rules and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Underwriters, to amend
or supplement the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, or if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the 1933 Act or the 1933 Act
Regulations, the Company will forthwith amend or supplement the Prospectus (in
form and substance reasonably satisfactory to counsel for the Underwriters) so
that, as so amended or supplemented, the Prospectus will not include 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 existing at
the time it is delivered to a purchaser, not misleading, and will comply with
the 1933 Act and the 1933 Act Regulations, and the Company will furnish to the
Underwriters a reasonable number of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws and real estate syndication laws of such states and
other jurisdictions of the United States as the Representatives may designate;
provided, however, that the Company shall not be obligated to (i) file any
general consent to service of process, (ii) qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or (iii) take any action that
would subject it to income taxation in any such jurisdiction. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the date of the Pricing Agreement. The Company will inform
the Florida Department of Banking and Finance if prior to the completion of the
distribution of the Securities by the Underwriters the Company commences
engaging in business with the government of Cuba or with any person or affiliate
located in Cuba.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than fifty (50) days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 of the 1933 Act Regulations) covering a twelve-
month period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
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<PAGE>
(h) Immediately following the execution of the Pricing
Agreement, the Company will prepare, and file or transmit for filing with the
Commission in accordance with Rule 434 and Rule 424(b) of the 1933 Act
Regulations, copies of the amended Prospectus supplement and term sheet, if any,
to the Registration Statement, containing all information so omitted.
(i) The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Prospectus under "Use
of Proceeds."
(j) During a period of 90 days from the date of the Pricing
Agreement, the Company, the Operating Partnership, The Marcus & Millichap
Company and each of George M. Marcus, William A. Millichap, Keith R. Guericke
and Michael J. Schall will not, without Merrill Lynch's prior written consent,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise transfer or dispose of (whether directly or synthetically), or
enter into any agreement to sell or otherwise dispose of (whether directly or
synthetically) any Common Stock or any security convertible into or exchangeable
into or exercisable for Common Stock, except for shares of Common Stock issued
(i) pursuant to this Agreement (ii) pursuant to the Company's stock option plans
as described in the Prospectus and (iii) pursuant to the terms of the
Convertible Preferred Stock.
(k) The Company, consistent with the best interests of its
shareholders, will use its best efforts to continue to meet the requirements to
qualify as a REIT under the Code.
(l) The Company will file, prior to any Representation Date, all
documents required to be filed with the Commission pursuant to Section 13, 14 or
15 of the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
(m) If the Company uses Rule 434 of the 1933 Act Regulations in
connection with the offering of the Securities, it will comply with the
requirements of Rule 434 of such regulations.
(n) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
SECTION 4. Payment of Expenses. The Company shall pay all expenses
-------------------
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement and any post-effective
amendment thereto, (ii) the printing of this Agreement and the Pricing
Agreement, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including the payment of any stock transfer
taxes, stamp duties and similar taxes, if any, payable upon the issuance of any
Securities, the sale of the Securities to the Underwriters and their transfer
between the Underwriters pursuant to an agreement between the Underwriters, (iv)
the fees and disbursements of the Company's counsel and accountants, (v) the
qualification of the Securities under
16
<PAGE>
securities and real estate syndication laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the fees and disbursements of
counsel in connection therewith and in connection with the preparation of the
Blue Sky Survey and any Legal Investment Survey, (vi) the printing and delivery
to the Underwriters of copies of the Registration Statement as originally filed
and of each amendment thereto, of each preliminary prospectus supplement, and
of the Prospectus and any amendments or supplements thereto, (vii) the printing
and delivery to the Underwriters of copies of the Blue Sky Survey and any Legal
Investment Survey, (viii) the fees of the National Association of Securities
Dealers, Inc., and (ix) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange; provided, however that
the Company shall have no obligation to reimburse the Representatives for (i)
fees, disbursements and out-of-pocket expenses of legal counsel to the
Representatives if the offering, as contemplated hereby, closes, or (ii)
expenses in connection with the offering, as contemplated hereby, (other than
legal fees and disbursements as aforesaid) that are customarily borne by the
representatives in initial public offerings managed by Merrill Lynch.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
---------------------------------------
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Operating Partnership
herein contained, to the performance by each of the Company and the Operating
Partnership of its obligations hereunder, and to the following further
conditions:
(a) The Registration Statement, as amended, shall have become
effective on or prior to the date of this Agreement; and at Closing Time no
stop order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or threatened
by the Commission. The price of the Securities and any price-related information
previously omitted from the effective Registration Statement and any term sheet
used pursuant to Rule 434 of the 1933 Act Regulations shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period and, prior to the Closing Time the
Company shall have provided evidence satisfactory to the Representatives of such
timely filing, or a post-effective amendment providing such information shall
have been promptly filed and declared effective.
(b) At Closing Time the Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time, of
Morrison & Foerster, counsel for the Company, in form and substance,
and
17
<PAGE>
subject to qualifications, exceptions and assumptions, satisfactory to
counsel for the Underwriters, to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation under the laws of the State of Maryland and is in
good standing under the laws of the State of Maryland.
(ii) The Company is duly qualified as a foreign
corporation to transact business in and is in good standing under the laws
of each jurisdiction in which such qualification is required and permitted
or is subject to no material liability or disability by reason of failure
to be so qualified in any such jurisdiction.
(iii) Each of the Company, the Operating Partnership,
Essex Bristol, L.P., Essex Marina Cove, L.P. Essex San Ramon, L.P. and
Essex Sunpointe, L.P. has been duly formed and is validly existing and in
good standing under the laws of the jurisdiction of its origin, has the
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and, to such counsel's
knowledge and information is duly qualified as a foreign entity to transact
business in and is in good standing under the laws of each jurisdiction in
which such qualification is required or is subject to no material liability
or disability by reason of failure to be so qualified in any such
jurisdiction; all of the outstanding ownership interests of each subsidiary
of the Company have been duly authorized and validly issued, are fully
paid, and the Company's ownership interest in each subsidiary of the
Company is owned directly or through subsidiaries by the Company as
described in the Prospectus, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(iv) Each of the Company and the Operating Partnership
has the power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, each of the
Company and the Operating Partnership, as the case may be, has the power
and authority to enter into and perform its obligations under this
Agreement and the Pricing Agreement.
(v) The Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement against payment of
the consideration set forth in the Pricing Agreement, will be validly
issued, fully paid and non-assessable.
(vi) The Company has an authorized capitalization as set
forth in the Prospectus, and the issued and outstanding shares of all
classes of
18
<PAGE>
the Company's capital stock have been duly authorized and validly issued
and are fully paid and non-assessable.
(vii) The issuance of the Securities is not subject to
preemptive or other similar rights arising by operation of law, the
Company's charter or bylaws or, to such counsel's knowledge, otherwise,
other than the preemptive rights of Tiger/Westbrook, as described in the
Prospectus, which have been waived.
(viii) The Securities conform in all material respects as
to legal matters to the description thereof contained in the Prospectus and
the form of certificate used to evidence the Common Stock is in due and
proper form and complies with all applicable statutory requirements.
(ix) This Agreement has been duly authorized, executed
and delivered by the Company and the Operating Partnership.
(x) The Pricing Agreement has been duly authorized,
executed and delivered by the Company.
(xi) The Registration Statement is effective under the
1933 Act, and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act or proceedings therefor initiated or threatened by the
Commission.
(xii) At the time the Registration Statement became
effective and at each Representation Date, the Registration Statement
(other than the financial statements and supporting schedules and other
financial data included therein, as to which no opinion need be rendered)
complied as to form in all material respects with the applicable
requirements of the 1933 Act and the 1933 Act Regulations.
(xiii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened which are required to be
disclosed in the Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the Company or any of
its subsidiaries is a party or to which any of their properties is subject
which are not described in the Prospectus, including ordinary routine
litigation incidental to the business, are, considered in the aggregate,
not material.
(xiv) The statements in the Prospectus under the headings
"Description of Common Stock," "Certain Provisions of the Company's Charter
and Bylaws," "Federal Income Tax Considerations," "Ti-
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<PAGE>
ger/Westbrook," "Description of Capital Stock of the Company" and "Risk
Factors - Risks Associated with Convertible Preferred Stock," to the extent
that they constitute matters of law, summaries of legal matters, documents
or proceedings, or legal conclusions, have been reviewed by such counsel
and are in all material respects accurate summaries and fairly and
correctly represent in all material respects the information required with
respect to such legal matters, documents or proceedings.
(xv) To such counsel's knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other instru ments
required to be described in the Prospectus or to be filed as exhibits to
the Registration Statement other than those described therein or filed as
exhib its thereto, and the descriptions thereof or references thereto are
correct in all material respects.
(xvi) No authorization, approval, consent or order
of any court or governmental authority or agency is required in connection
with the offering, issuance or sale of the Securities to the Underwriters,
except such as may be required under the 1933 Act or the 1933 Act
Regulations or securities laws of any state; and the execution, delivery
and performance of this Agreement and the Pricing Agreement and the
consummation of the sale of the Securities contemplated herein and therein
and compliance by the Company with its obligations hereunder and thereunder
will not result in any violation of the provisions of the Company's charter
or bylaws or the organizational documents of any subsidiary, or any
applicable law, administrative regulation or administrative or court
decree, nor will any such action, to such counsel's knowledge, 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 subsidiary, as the case may be, pursuant to
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any subsidiary is a party or by which
any of them may be bound, or to which any of their properties or assets is
subject.
(xvii) Except as disclosed in the Prospectus, there are
no persons with registration or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered
by the Company under the 1933 Act.
(xviii) Neither the Company nor any of its subsidiaries
is an "investment company" or an entity "controlled" by an "investment
company as such terms are defined in the Investment Company Act of 1940, as
amended.
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(xix) The Company has qualified as a REIT under the code
as of the Closing Time and for its taxable years ended December 31, 1994
and December 31, 1995, and is organized in conformity with the requirements
for qualification as a REIT under the Code and its present and proposed
method of operation will enable it to meet the requirements for
qualification as a REIT under the Code.
(xx) Each document filed pursuant to the 1934 Act (other
than financial statements and schedules included therein, as to which no
opinion need be rendered) and incorporated or deemed to be incorporated by
reference in the Prospectus complied when so filed as to form in all
material respects with the 1934 Act and the 1934 Act Regulations.
In giving its opinions, Morrison & Foerster may rely as to
matters of fact upon certificates of officers of the Company, its
subsidiaries and the Operating Partnership, and as to matters of Maryland
law on the opinion of Ballard Spahr Andrews & Ingersoll, which opinion
shall be in form and substance satisfactory to counsel for the
Underwriters.
In addition such counsel shall state that they have
participated in conferences with officers and other representatives of the
Company, the Representatives, counsel for the Underwriters and the
Company's independent accountants, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were
discussed and, although they are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus, and they
have not made any independent check or verification thereof, on the basis
of the foregoing, no facts have come to their attention that would lead
them to believe that the Registration Statement, as amended, (except for
financial statements and schedules and other financial or statistical data
included therein, as to which counsel need make no statement), at the time
it became effective, contained any 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 not misleading or that the Prospectus
(except for financial statements and schedules and other financial or
statistical data included therein, as to which counsel need make no
statement), at the date of the Pricing Agreement and at the Closing Time,
included any 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 light of the circumstances in which they were made,
not misleading.
(2) The favorable opinion, dated as of Closing Time, of Skadden,
Arps, Slate, Meagher & Flom, counsel for the Underwriters, with respect to
the matters set forth in paragraph (xi), of subsection (b)(1) of this
Section.
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In addition such counsel shall state that they have participated
in conferences with officers and other representatives of the Company, the
Representatives, counsel for the Company and the Company's independent
accountants, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed and,
although they are not passing upon, and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus, and they have not made any
independent check or verification thereof, on the basis of the foregoing,
no facts have come to their attention that would lead them to believe that
the Registration Statement, at the date of the Pricing Agreement and at
the Closing Time, 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 not misleading or that the Prospectus, at
the time it is first provided to the Underwriters for such use or at the
Closing Time, included or includes an untrue statement of a material fact
or omitted or omits 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, except that in each case counsel need express no
opinion or belief with respect to the Incorporated Documents or the
financial statements, schedules and other financial or statistical data
included or incorporated by reference therein or excluded therefrom or the
exhibits to the Registration Statement.
(c) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company (or the Operating Partnership, as the case may be) and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Representatives shall have received a certificate of the Chief
Executive Officer and of the Chief Financial Officer of the Company (or, in the
case of the Operating Partnership, the Company as the general partner of the
Operating Partnership, as the case may be), dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of Closing Time, (iii)
the Company (or the Operating Partnership, as the case may be) has complied with
all agree ments and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) with respect to the certificate
delivered by the Company only, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission. As used in this Section 5(c),
the term "Prospectus" means the Prospectus in the form first used to confirm
sales of the Securities.
(d) At the time of the execution of this Agreement, the
Representatives shall have received from KPMG Peat Marwick a letter dated such
date, in form and substance satisfactory to the Representatives and the
officers and directors of the Company, to the effect that (i) they are
independent public accountants with respect to the Company and
22
<PAGE>
its subsidiaries within the meaning of the 1933 Act and the 1933 Act
Regulations; (ii) it is their opinion that the financial statements and
supporting schedules included in the Registration Statement and covered by
their opinions therein comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the 1933 Act Regulations;
(iii) based upon limited procedures set forth in detail in such letter, and
except as otherwise set forth in such letter, nothing has come to their
attention which causes them to believe that (A) at a specified date not more
than five days prior to the date of this Agreement, there has been any change
in capital stock or long-term debt of the Company or any decrease in
consolidated net assets or stockholders' equity of the Company as compared with
the amounts shown in the unaudited March 31, 1996 consolidated balance sheet of
the Company included in the Registration Statement or, during the period from
April 1, 1996 to a specified date not more than five days prior to the date of
this Agreement, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenues or net income of the
Company, except in all instances for changes, increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur or
(B) the unaudited combined pro forma financial statements included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-X of the
Commission or that the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of such statements; and (iv) in
addition to the examination referred to in their opinion and the limited
procedures referred to in clause (iii) above, they have carried out certain
specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information included in the Registration
Statement and Prospectus that are specified by the Representatives, and have
found such amounts, percentages and financial information to be in agreement
with the relevant accounting, financial and other records of the Company, or
Essex Partners Properties, as the case may be, identified in such letter.
(e) At Closing Time, the Representatives and the officers and
directors of the Company shall have received from KPMG Peat Marwick, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section, except that the specified
date referred to shall be a date not more than five days prior to Closing Time
and, to the further effect that they have carried out procedures as specified in
clause (iv) of subsection (d) of this Section with respect to certain amounts,
percentages and financial information specified by the Representative and have
found such amounts, percentages and financial information to be in agreement
with the records specified in such clause (iv).
(f) At Closing Time the Securities shall be listed on the New
York Stock Exchange.
(g) At the date of this Agreement, the Representatives shall
have received an agreement signed by The Marcus & Millichap Company and each of
George M. Marcus, William A. Millichap, Keith R. Guericke and Michael J. Schall
as to the matters set forth in Section 3(j).
23
<PAGE>
(h) At Closing Time and at each Date of Delivery, if any,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be reasonably satisfactory
in form and substance to the Representatives and counsel for the Underwriters.
(i) In the event that the Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Representatives shall have received:
(1) A certificate, dated such Date of Delivery, of the
Chief Executive Officer of the Company and of the Chief Financial
Officer of the Company confirming that the certificate delivered at
Closing Time pursuant to Section 5(c) hereof remains true and correct
as of such Date of Delivery.
(2) The favorable opinion of Morrison & Foerster, counsel
for the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b)(1) hereof.
(3) The favorable opinion of Skadden, Arps, Slate, Meagher
& Flom, counsel for the Underwriters, dated such Date of Delivery, to
the same effect as the opinion required by Section 5(b)(2) hereof.
(4) A letter from KPMG Peat Marwick, in form and substance
satisfactory to the Representatives and the officers and directors of
the Company, dated such Date of Delivery, substantially the same in
form and substance as the letter furnished by such firm to the
Representatives pursuant to Section 5(e) hereof, except that the
"specified date" in the letter furnished pursuant to this Section
5(i)(4) shall be a date not more than five days prior to such Date of
Delivery.
If any condition specified in this Section shall not have been fulfilled when
and as required to be fulfilled, this Agreement, or, in the case of any
condition to the purchase of Option Securities on a Date of Delivery which is
after the Closing Time, the obligations of the several Underwriters to purchase
the relevant Option Securities, may be terminated by the Representatives by
notice to the Company at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without liability of
any
24
<PAGE>
party to any other party except as provided in Section 4 hereof and except that
Sections 1, 6 and 7 shall survive any such termination and remain in full force
and effect.
SECTION 6. Indemnification.
---------------
(a) The Company and the Operating Partnership, jointly and
severally agree to indemnify and hold harmless each Underwriter, its officers,
directors, employees and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by
any governmental or regulatory agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission; provided that, any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by the Representatives), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that (i) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or any prelimi-
25
<PAGE>
nary prospectus supplement or the Prospectus (or any amendment or supplement
thereto), and (ii) that the Company shall not be liable to any Underwriter under
the indemnity agreement in this subsection (a) with respect to any preliminary
prospectus or preliminary prospectus supplement to the extent that any such
loss, claim, damage or liability of such Underwriter results from the fact such
Underwriter sold Securities to a person as to whom there was not sent or given,
at or prior to written confirmation of such sale, a copy of the Prospectus as
then amended or supplemented in any case where such delivery is required by the
1933 Act if the Company has previously furnished copies thereof to such
Underwriter and the loss, claim, damage or liability of such Underwriter results
from an untrue statement or omission of a material fact contained in the
preliminary prospectus or preliminary prospectus supplement which was corrected
in the Prospectus or in the Prospectus as then amended or supplemented.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus supplement or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus supplement or the Prospectus (or any amendment or
supplement thereto). The Company acknowledges that the statements set forth in
the first two sentences of the last paragraph of text on the cover page and in
the second paragraph under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of any
Underwriter expressly for use in the Registration Statement relating to the
Securities as originally filed or in any amendment thereof, any related
preliminary prospectus supplement or the Prospectus or in any amendment thereof
or supplement thereto, as the case may be.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have under this indemnity agreement to the extent
such indemnifying party was not materially prejudiced by such failure or
otherwise than on account of this indemnity agreement. In the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties
shall be selected by Merrill Lynch, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the indemni-
26
<PAGE>
fying parties be liable for fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then the Company and the Operating
Partnership, on the one hand, and the Underwriters on the other hand, shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by the Company and the Operating Partnership, on the one
hand, and one or more of the Underwriters on the other hand, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Operating Partnership on the one hand and the Underwriters
on the other hand from the offering of the Securities pursuant to this Agreement
or (ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Operating Partnership on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Operating
Partnership on the one hand and the Underwriters on the other hand in connection
with the offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the Underwriters, in each case as set forth on the cover of the Prospectus,
or, if Rule 434 is used, the corresponding location on the term sheet bear to
the aggregate initial public offering price of the Securities as set forth on
such cover.
The relative fault of the Company and the Operating Partnership on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, the Operating Partnership and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
27
<PAGE>
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
- --------
Agreement and the Pricing Agreement, or contained in certificates of officers of
the Company submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) The Representatives may terminate this Agreement, by notice
to the Company at any time at or prior to Closing Time (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis the effect of which is such as to make it,
in the judgment of the Representatives, impracticable to market the Securities
or to enforce contracts for the sale of the Securities, or (iii) if trading in
the
28
<PAGE>
Common Stock has been suspended by the Commission, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by either federal, New York or California
authorities. As used in this Section 9(a), the term "Prospectus" means the
Prospectus in the form first used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof.
SECTION 10. Default by One or More of the Underwriters. If one or
------------------------------------------
more of the Underwriters shall fail at Closing Time to purchase the Initial
Securities which it or they are obligated to purchase under this Agreement and
the Pricing Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of Initial Securities, each of the non-defaulting Underwriters shall
be obligated, severally and not jointly, to purchase the full amount thereof in
the proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Initial Securities, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability to the Company or any non-defaulting Underwriters in
respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at Merrill Lynch & Co.,
Murdock Plaza, 10900 Wilshire Boulevard, 9th
29
<PAGE>
Floor, Los Angeles, California 90024, attention of David Knowles; notices to
the Company shall be directed to it at Essex Property Trust, Inc., 777
California Avenue, Palo Alto, California 94304, attention of Keith R. Guericke,
with a copy to Morrison & Foerster, 755 Page Mill Road, Palo Alto, California
94304-1018.
SECTION 12. Parties. This Agreement and the Pricing Agreement shall
-------
each inure to the benefit of and be binding upon the Underwriters, the Company
and the Operating Partnership and their respective successors. Nothing
expressed or mentioned in this Agreement or the Pricing Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company, the Operating Partnership and their respective
successors and to the extent provided in Sections 6 and 7, the controlling
persons and officers and directors referred to in such Sections 6 and 7 and
their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or the Pricing Agreement or any
provision herein or therein contained. This Agreement and the Pricing Agreement
and all conditions and provisions hereof and thereof are intended to be for the
sole and exclusive benefit of the Underwriters, the Company and the Operating
Partnership and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. Governing Law and Time. This Agreement and the Pricing
----------------------
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Except as otherwise set forth herein, specified times of day refer to
New York time.
30
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters, the Company and the Operating Partnership in accordance with
its terms.
Very truly yours,
ESSEX PROPERTY TRUST, INC.
By: /s/ Michael J. Schall
---------------------------------------
Name: Michael J. Schall
Title: Executive Vice President, Chief
Financial Officer and Secretary
ESSEX PORTFOLIO, L.P.
By: /s/ Keith R. Guericke
---------------------------------------
Name: Keith R. Guericke
Title: Chief Executive Officer
and President
31
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
RAYMOND JAMES & ASSOCIATES, INC.
SUTRO & CO. INCORPORATED
By: MERRILL, LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ David L. Knowles
---------------------------------------
Name: David L. Knowles
Title: Managing Director
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
32
<PAGE>
SCHEDULE A
Number of
Name of Underwriter Initial Securities
- ------------------- ------------------
<TABLE>
<CAPTION>
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................................... 300,000
Donaldson, Lufkin & Jenrette
Securities Corporation.................................. 300,000
Raymond James & Associates, Inc................................. 300,000
Sutro & Co. Incorporated........................................ 300,000
Dean Witter Reynolds Inc........................................ 100,000
A.G. Edwards & Sons, Inc........................................ 100,000
PaineWebber Incorporated........................................ 100,000
Prudential Securities Incorporated.............................. 100,000
Robertson, Stephens & Company LLC............................... 100,000
Smith Barney Inc................................................ 100,000
Crowell, Weedon & Co............................................ 50,000
Dain Bosworth Incorporated...................................... 50,000
EVEREN Securities, Inc.......................................... 50,000
Edward D. Jones & Co............................................ 50,000
Piper Jaffray Inc............................................... 50,000
Ragen MacKenzie Incorporated.................................... 50,000
Van Kasper & Company............................................ 50,000
Wedbush Morgan Securities....................................... 50,000
---------
2,200,000
</TABLE>
A-1
<PAGE>
EXHIBIT 1.2
2,200,000 Shares of Common Stock
ESSEX PROPERTY TRUST, INC.
(a Maryland corporation)
(Par Value $.0001 Per Share)
PRICING AGREEMENT
-----------------
August 8, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
RAYMOND JAMES & ASSOCIATES, INC.
SUTRO & CO. INCORPORATED
as Representatives of the several Underwriters
named in the within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Dear Sirs:
Reference is made to the Purchase Agreement dated August 8, 1996
(the "Purchase Agreement") among Essex Property Trust, Inc., a Maryland
corporation (the "Company"), Essex Portfolio, L.P., and the several
Underwriters named in Schedule A thereto, for whom Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation, Raymond James & Associates, Inc. and Sutro
& Co. Incorporated are acting as Representatives (the "Representatives").
The Purchase Agreement provides for the purchase by the Underwriters from
the Company, subject to the
1
<PAGE>
terms and conditions set forth therein, of the above shares of Common Stock
(the "Initial Securities") and an aggregate of 330,000 additional shares
(the "Option Securities") of the Company's Common Stock, par value $.0001
per share. The Initial Securities and the Option Securities are
collectively hereinafter called the "Securities."
Pursuant to Section 2 of the Purchase Agreement, the Company
agrees with each Underwriter as follows:
(1) The public offering price per share for the Securities,
determined as provided in said Section 2, shall be $22.75.
(2) The purchase price per share for the Securities to be paid
by the several Underwriters shall be $21.50, being an amount
equal to the initial public offering price set forth above
less $1.25 per share; provided that the purchase price per
--------
share for any Option Securities (as defined in the Purchase
Agreement) purchased upon exercise of the over-allotment
option described in Section 2(b) of the Purchase Agreement
shall be reduced by an amount per share equal to any
dividends declared by the Company and payable on the
Initial Securities (as defined in the Purchase Agreement)
but not payable on the Option Securities.
2
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its
terms.
Very truly yours,
ESSEX PROPERTY TRUST, INC.
By: /s/ Michael J. Schall
---------------------------------------
Name: Michael J. Schall
Title: Executive Vice President, Chief
Financial Officer and Secretary
CONFIRMED AND ACCEPTED
as of the date first above written
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
RAYMOND JAMES & ASSOCIATES, INC.
SUTRO & CO. INCORPORATED
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ David L. Knowles
--------------------------------------------
Name: David L. Knowles
Title: Managing Director
For themselves and as Representatives of the
other Underwriters named in the Purchase Agreement.
3
