<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 17, 1996
REGISTRATION NO. 333-3002
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
PRE-EFFECTIVE
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
EVANS WITHYCOMBE RESIDENTIAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MARYLAND 86-0766008
(State or other jurisdiction (I.R.S. Employer
of Identification
incorporation or Number)
organization)
</TABLE>
--------------------------
6991 EAST CAMELBACK ROAD, SUITE A-200, SCOTTSDALE, ARIZONA 85251, (602) 840-1040
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------------------
STEPHEN O. EVANS
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
EVANS WITHYCOMBE RESIDENTIAL, INC.
6991 EAST CAMELBACK ROAD, SUITE A-200
SCOTTSDALE, ARIZONA 85251
(602) 840-1040
(Name, address, including zip code and telephone number, including area code, of
agent for service)
--------------------------
COPIES TO:
<TABLE>
<S> <C>
KENNETH M. DORAN EDWARD SONNENSCHEIN, JR.
GIBSON, DUNN & CRUTCHER LLP LATHAM & WATKINS
333 SOUTH GRAND AVENUE 633 WEST 5TH STREET, SUITE 4000
LOS ANGELES, CALIFORNIA 90071-3197 LOS ANGELES, CALIFORNIA 90071-2007
(213) 229-7000 (213) 485-1234
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant Rule 462 (b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement from the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Scottsdale, State of Arizona, on this
17th day of May 1996.
EVANS WITHYCOMBE RESIDENTIAL, INC.
By: /S/ STEPHEN O. EVANS
---------------------------------------
Stephen O. Evans
CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<C> <S> <C>
NAME TITLE DATE
- ------------------------------------------------------ ---------------------------------------- ---------------
/S/ STEPHEN O. EVANS Chairman of the Board of Directors and May 17, 1996
------------------------------------------- Chief Executive Officer (Principal
Stephen O. Evans Executive Officer)
* President, Chief Operating Officer and May 17, 1996
------------------------------------------- Director
F. Keith Withycombe
* Senior Vice President and Chief May 17, 1996
------------------------------------------- Financial Officer (Principal Financial
Paul R. Fannin and Accounting Officer)
* Executive Vice President and Director May 17, 1996
-------------------------------------------
Richard G. Berry
* Director May 17, 1996
-------------------------------------------
Joseph F. Azrack
* Director May 17, 1996
-------------------------------------------
G. Peter Bidstrup
* Director May 17, 1996
-------------------------------------------
Joseph W. O'Connor
* Director May 17, 1996
-------------------------------------------
John O. Theobald II
*By: /S/ STEPHEN O. EVANS
--------------------------------------
Stephen O. Evans
ATTORNEY-IN-FACT
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ----------------------------------------------------------------------------------------
<C> <S> <C>
1.1 Form of Purchase Agreement
*4.1 Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit No.
3.1 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994
and incorporated herein by reference).
*4.2 Amended and Restated Bylaws of the Registrant (previously filed as Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference).
*5.1 Opinion of Ballard Spahr Andrews & Ingersoll regarding the validity of the securities
being registered.
23.1 Consent of Ernst & Young LLP
*23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5.1)
*24 Power of Attorney (included on signature page)
</TABLE>
- ------------------------
* Previously filed.
II-4
<PAGE>
L&W Draft of 05/16/96
4,500,000 Shares
EVANS WITHYCOMBE RESIDENTIAL, INC.
(a Maryland corporation)
Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
May __, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
DEAN WITTER REYNOLDS INC.
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
as Representatives of the several Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters - North Tower
250 Vesey Street
World Financial Center
New York, New York 10281-1209
Ladies and Gentleman:
Evans Withycombe Residential, Inc., a Maryland corporation (the
"Company"), Evans Withycombe Residential, L.P., a Delaware limited partnership
(the "Operating Partnership"), AEW Partners, L.P. a Delaware limited partnership
("AEW") and CIIF Associates II Limited Partnership, a Delaware limited
partnership ("Copley," and together with AEW, the "Selling Shareholders") each
confirms its respective agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Dean Witter Reynolds Inc.
("Dean Witter"), Morgan Stanley & Co. Incorporated ("Morgan Stanley"), and Smith
Barney Inc. ("Smith Barney") 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, Dean Witter, Morgan Stanley and Smith Barney
are acting as representatives (in such capacity, the "Representatives"), with
respect to (i) the sale by the Company and the Selling Shareholders, acting
severally and not jointly, and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of shares of common stock,
par value $.01 per share, of the Company ("Common Shares") set forth in
<PAGE>
Schedules A and B hereto and (ii) the grant by the Company and the Selling
Shareholders to the Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 675,000
additional Common Shares to cover over-allotments, if any. The aforesaid
4,500,000 Common Shares described in clause (i) above (the "Initial Securities")
to be purchased by the Underwriters and all or any part of the 675,000 Common
Shares subject to the option described in Section 2(b) hereof (the "Option
Securities") are collectively hereinafter called the "Securities."
The Company, the Operating Partnership and the Selling Shareholders
understand that the Underwriters propose to make a public offering of the
Securities as soon as the Representatives deem advisable after this Agreement
has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-3002) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
The information included in such prospectus or in such Term Sheet, as the case
may be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to
the preliminary prospectus dated May 2, 1996 together with the Term Sheet and
all references in this 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, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the
2
<PAGE>
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "described," "disclosed," "contained," "included"
or "stated" in the Registration Statement, any preliminary prospectus or the
Prospectus (and all 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,
any preliminary prospectus or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to mean
and include the filing of any document under the Securities Exchange Act of
1934, as amended ("1934 Act"), which is or is deemed to be incorporated by
reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND THE OPERATING
PARTNERSHIP. The Company and the Operating Partnership jointly and severally
represent and warrant to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. At the
respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto
became effective, and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto 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.
Neither the Prospectus nor any amendments or supplements thereto, at
the time the Prospectus or any such amendment or supplement was issued
and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), included or will 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
under which they were made, not misleading. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus or any
amendments or supplements thereto made in reliance upon and in
conformity with information contained in the last paragraph of the
cover page of the Prospectus, the last paragraph on the inside cover
page of the Prospectus and the second paragraph under the heading
"Underwriting" in the Prospectus and furnished to the Company in
writing by any Underwriter through Merrill Lynch expressly for use in
the Registration
3
<PAGE>
Statement or Prospectus. Each preliminary prospectus and the
prospectus filed as part of the Registration Statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule
424 under the 1933 Act, complied when so filed in all material
respects with the 1933 Act Regulations and, if applicable, each
preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T promulgated by the Commission ("Regulation S-T").
(ii) FORM S-3 REGISTRATION STATEMENT. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement or, in each case, any part thereof has been
issued and no proceeding for that purpose has been instituted or is
pending or, to the knowledge of the Company or the Operating
Partnership, is contemplated by the Commission or the state securities
authority of any jurisdiction and any request on the part of the
Commission for additional information has been complied with. No
order preventing or suspending the use of the Prospectus has been
issued and no proceeding for that purpose has been instituted or is
pending before or, to the knowledge of the Company or the Operating
Partnership, is contemplated by, the Commission or the state
securities authority of any jurisdiction.
(iii) INCORPORATED DOCUMENTS. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, when they became effective or at the time they
were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations or the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"),
as applicable, and, when read together with the other information in
the Prospectus, at the date of the Prospectus and at the Closing Time
(and, if any Option Securities are purchased, at the Date of Delivery)
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.
(iv) INDEPENDENT ACCOUNTANTS. Ernst & Young LLP, the accounting
firm that certified the financial statements and supporting schedules
included or incorporated by reference in the Registration Statement,
are independent public accountants as required by the 1933 Act and the
1933 Act Regulations.
(v) FINANCIAL STATEMENTS. The financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus,
4
<PAGE>
together with the related schedules and notes, present fairly the
financial position of the respective entity or entities presented
therein at the dates indicated, and the results of their operations
for the respective periods specified, and 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 ("GAAP") throughout the periods
involved. The supporting schedules, if any, included or incorporated
by reference in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein.
The financial information and data included in the Registration
Statement and the Prospectus present fairly the information included
therein and have been prepared on a basis consistent with that of the
audited financial statements incorporated by reference in the
Registration Statement. The pro forma financial information included
in the Registration Statement and the Prospectus presents fairly the
information shown therein, has been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and has been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
Other than the financial information and statements and supporting
schedules included or incorporated therein, no other historical or pro
forma financial information or supporting schedule is required by the
1933 Act or the 1933 Act Regulations to be included in the
Registration Statement.
(vi) 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 therein, (A)
there has been no material adverse change or, to the knowledge of the
Company and the Operating Partnership, any development involving a
prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, assets or business affairs of the
Company, the Operating Partnership and their respective subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company, the Operating Partnership
or any of the Subsidiaries (as defined below), other than those in the
ordinary course of business, which are material with respect to the
Company, the Operating Partnership and the Subsidiaries considered as
one enterprise, or would result, upon consummation, in any inaccuracy
in the representations contained in Section 1(a)(v) above, (C) there
has been no casualty, loss or condemnation or other adverse event with
respect to any Community or Development Right (each as defined in the
Prospectus) that is material with respect to the Company, the
Operating Partnership and the Subsidiaries considered as one
enterprise, (D) except for regular quarterly dividends on its Common
Stock in amounts per share that are consistent with past practice,
there has been no dividend or distribution of any kind declared, paid
or made by the Company
5
<PAGE>
on any class of its capital stock and (E) there has been no material
change in the capital stock or the partnership interests, as
applicable, of the Company, the Operating Partnership or any of the
Subsidiaries or any material change in the short-term debt or long-
term debt of the Company, the Operating Partnership or any Subsidiary.
(vii) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Maryland and has the corporate power
and authority to own, lease and operate its properties and to conduct
the business in which it is engaged or proposes to engage as described
in the Prospectus and to enter into and perform its obligations under
this Agreement. The Company is duly qualified as a foreign
corporation 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, except where the failure to so qualify would not, either
singly or in the aggregate, result in a Material Adverse Effect.
(viii) GOOD STANDING OF OPERATING PARTNERSHIP. The Operating
Partnership has been duly organized and is validly existing as a
limited partnership in good standing under the Delaware Revised
Uniform Limited Partnership Act, as amended (the "Delaware Act"), with
full partnership power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged or proposes
to engage as described in the Prospectus and to enter into and perform
its obligations under this Agreement. The Operating Partnership is
duly qualified or registered as a foreign partnership to transact
business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership, leasing or registration of property or the conduct of
business, except where the failure to so qualify or register would not
result in, either singly or in the aggregate, a Material Adverse
Effect. The Operating Partnership and the Subsidiaries are the only
subsidiaries of the Company. Except as described below, neither the
Company, the Operating Partnership nor any of the Subsidiaries own any
shares of stock or any other equity securities of any corporation or
has any equity interest in any firm, partnership, association or other
entity.
(ix) GOOD STANDING OF PARTNERSHIPS. Evans Withycombe Finance
Partnership, L.P. (the "Financing Partnership") has been duly
organized and is validly existing as a limited partnership in good
standing under the laws of the State of Delaware and the single
purpose partnership that owns The Ashton Apartments in Corona Hills,
California (the "Ashton Partnership"), has been duly organized and is
validly existing as a limited partnership in good standing under the
laws of the State of California. Each of the Financing Partnership
and the Ashton Partnership has full partnership power and authority to
own, lease and operate its properties and to conduct the business in
which it is
6
<PAGE>
engaged or proposes to engage as described in the Prospectus. Each of
the Financing Partnership and the Ashton Partnership is duly qualified
or registered as a foreign partnership and is in good standing in each
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership, leasing or registration of
property or the conduct of business, except where the failure to so
qualify or register would not, either singly or in the aggregate,
result in a Material Adverse Effect. Evans Withycombe Finance, Inc.,
a wholly owned subsidiary of the Company, is the sole general partner
of the Financing Partnership and is the holder of a 1% general
partnership interest therein, and the Operating Partnership is the
holder of the remaining 99% partnership interest therein. The
Operating Partnership owns 99% of the partnership interests of the
Ashton Partnership and the Company is the holder of the remaining 1%
partnership interest therein. All of the partnership interests of the
Financing Partnership and the Ashton Partnership are validly issued
and fully paid and are free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(x) GOOD STANDING OF THE SUBSIDIARIES. Each of Evans Withycombe
Management, Inc. (the "Management Company," and together with Evans
Withycombe Finance, Inc., the Ashton Partnership and the Financing
Partnership, the "Subsidiaries"), and Evans Withycombe Finance, Inc.
has been duly organized and is validly existing as a corporation in
good standing under the laws of the state of its incorporation, with
corporate power and authority to own, lease and operate its properties
and to conduct the business in which it is engaged or proposes to
engage as described in the Prospectus. Each of the Management Company
and Evans Withycombe Finance, Inc. is duly qualified as a foreign
corporation 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, except where the failure to so qualify, either singly or in
the aggregate, would not result in a Material Adverse Effect. All of
the issued and outstanding capital stock of each of the Management
Company and Evans Withycombe Finance, Inc. has been duly authorized
and validly issued, is fully paid and nonassessable and is free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, and none of such outstanding shares of capital stock
was issued in violation of preemptive or similar rights of any
securityholder of such Subsidiary. The ownership of the shares of
capital stock of each of the Management Company and Evans Withycombe
Finance, Inc. is as described in the prospectus for the Company's
initial public offering dated August 10, 1994. All of the capital
stock of Evans Withycombe Finance, Inc. has been owned by the Company
since the formation of Evans Withycombe Finance, Inc. and such
corporation is a "qualified REIT subsidiary" as defined in Section
856(i)(2) of the Internal Revenue Code of 1986, as amended (the
"Code").
7
<PAGE>
(xi) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus under
the heading "CAPITALIZATION" (except for subsequent issuances, if any,
pursuant to this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or pursuant to
the exercise of convertible securities or options referred to in the
Prospectus). All of the issued and outstanding Common Shares,
including the Securities to be purchased by the Underwriters from the
Selling Shareholders, have been duly authorized and are validly
issued, fully paid and nonassessable, and have been offered and sold
in compliance with all applicable laws, including, without limitation,
federal and state securities laws. None of the outstanding Common
Shares, including the Securities to be purchased from the Selling
Shareholders, were issued in violation of the preemptive or other
similar rights of any securityholder of the Company. The ownership
thereof is as set forth in the Registration Statement. No shares of
capital stock of the Company are reserved for any purpose except in
connection with (A) the 1994 Stock Option Plan of the Company as
described in the Prospectus, (B) the possible issuance of Common
Shares upon the redemption of Units of the Operating Partnership
pursuant to the Partnership Agreement of the Operating Partnership and
(C) the issuance of the Securities. Except for options under the 1994
Stock Option Plan and Units of the Operating Partnership, there are no
outstanding securities convertible into or exchangeable for any shares
of capital stock of the Company and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
such shares or any other securities of the Company. The Company has
duly reserved a sufficient number of Common Shares for issuance upon
redemption of outstanding Units and exercise of options under the 1994
Stock Option Plan, as described in the Partnership Agreement of the
Operating Partnership. The terms of the Common Shares conform in all
material respects to all statements and descriptions related thereto
contained or incorporated by reference in the Prospectus and such
description conforms to the rights set forth in the instruments
defining the same.
(xii) ISSUANCE OF SECURITIES. The Securities to be purchased
by the Underwriters from the Company 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 herein, will be validly
issued, fully paid and nonassessable and each of the Underwriters will
receive valid title to the Securities, free and clear of all security
interests, mortgages, pledges, liens, encumbrances, claims and
equities. The issuance of the Securities is not subject to any
preemptive or other similar rights of any securityholder of the
Company. No holder of the Securities will be subject to personal
liability by reason of being such a holder. The form of share
certificate to be used to evidence the Common Shares will be in due
and proper form and will comply with all applicable legal
requirements.
8
<PAGE>
(xiii) OPERATING PARTNERSHIP UNITS. The Units issued by the
Operating Partnership, including, without limitation, the Units issued
to the Company, have been duly authorized for issuance by the
Operating Partnership to the holders thereof and are validly issued,
fully paid and nonassessable. Immediately after the Closing Time, but
before giving effect to the purchase of any Option Securities,
__________ Units will be issued and outstanding, and the Company will
be the sole general partner of the Operating Partnership and will be
the holder of 18,179,379 Units representing ____% of the outstanding
Units in the Operating Partnership, including the Company's 1% general
partner interest therein. The Units and any Common Shares issued upon
conversion of Units have been offered and sold in compliance with all
applicable laws, including, without limitation, federal and state
securities laws.
(xiv) AUTHORIZATION OF AGREEMENT. This Agreement has been
duly and validly authorized, executed and delivered by the Company and
the Operating Partnership, and assuming due authorization, execution
and delivery by the Representatives, is a valid and binding agreement
of each of the Company and the Operating Partnership, enforceable
against each of the Company and the Operating Partnership, in
accordance with its terms; PROVIDED, HOWEVER, that the enforceability
of this Agreement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights
generally and by general equitable principles, and the
unenforceability under certain circumstances of provisions providing
for the indemnification of or contribution to a party with respect to
a liability where such indemnification or contribution is contrary to
public policy or prohibited by law.
(xv) ABSENCE OF DEFAULTS AND CONFLICTS. (A) None of the Company,
the Operating Partnership or any Subsidiary is in violation of its
charter, bylaws, certificate of limited partnership, partnership
agreement or other governing document, as the case may be, and none of
such entities is or will be in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to
which such entity is a party or by which such entity may be bound or
affected, or to which any of the property or assets of such entity is
subject (collectively, "Agreements and Instruments"), except for such
violations or defaults that would not result in a Material Adverse
Effect; (B) the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and in
the Registration Statement (including the issuance and sale of the
Securities, the sale of Securities by the Selling Shareholders and the
use of proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by each
of the Company and the Operating Partnership with its obligations
hereunder have been duly authorized by all necessary corporate or
partnership action on the part of the Company, the Operating
Partnership or any Subsidiary, as the case may be, and do not and will
not, whether with or without the giving of notice
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or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, the Operating Partnership or any of
the Subsidiaries pursuant to, any Agreement or Instrument, nor will
such action result in any violation of the charter, bylaws,
certificate of limited partnership, partnership agreement or other
governing document, as the case may be, of such entity or any
applicable law, statute, rule, regulation, judgment, order, writ or
administrative or court decree. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company,
the Operating Partnership or any of the Subsidiaries.
(xvi) 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
or the Operating Partnership, threatened, against or affecting the
Company, the Operating Partnership or any Subsidiary, or of which any
of their respective property or assets is the subject, which is
required to be disclosed in the Registration Statement, other than as
disclosed therein, or which might result in a Material Adverse Effect
or which might materially and adversely affect the consummation of the
transactions contemplated by this Agreement or the performance by the
Company of its obligations hereunder. All pending legal or
governmental proceedings to which the Company, the Operating
Partnership or any Subsidiary is a party or of which any of their
respective property or assets is the subject which are not described
in the Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material to the earnings, assets, business affairs or business
prospects of the Company, the Operating Partnership and the
Subsidiaries considered as one enterprise and could not reasonably be
expected to result in a Material Adverse Effect. There are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or documents of the Company, the Operating
Partnership or any of the Subsidiaries which are required to be
described or referred to in the Registration Statement, the Prospectus
or other documents incorporated by reference therein or to be filed as
exhibits to the Registration Statement by the 1933 Act or by the 1933
Act Regulations other than those described or referred to therein or
filed as exhibits thereto, and the descriptions thereof or references
thereto in the Registration Statement are true and correct in all
material respects.
(xvii) TAX STATUS OF THE COMPANY. The Company has been and
is organized in conformity with the requirements for qualification as
a real estate investment trust ("REIT") under the Code, and its method
of operation has at
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all times enabled, and its proposed method of operation will enable,
the Company to satisfy the requirements for taxation as a REIT under
the Code.
(xviii) POSSESSION OF INTELLECTUAL PROPERTY. The Company,
the Operating Partnership and the Subsidiaries own or possess, or can
acquire on reasonable terms, the licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
the "Proprietary Rights") presently employed by them or necessary to
carry on the business now operated by them, and neither the Company,
the Operating Partnership nor any of the Subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Proprietary Rights, or
of any facts which would render any Proprietary Rights invalid or
inadequate to protect the interests of the Company, the Operating
Partnership or any of the Subsidiaries therein, and which infringement
or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, individually or in the
aggregate, would result in a Material Adverse Change.
(xix) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company,
the Operating Partnership or any Subsidiary in connection with the
offering, issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement,
except such as may be required under the 1933 Act or the 1933 Act
Regulations or securities laws of any state or other jurisdiction and
except for such as have been obtained.
(xx) POSSESSION OF LICENSES AND PERMITS. Each of the Company,
the Operating Partnership and the Subsidiaries possesses, or can
acquire on reasonable terms, such certificates, licenses, approvals,
consents, authorizations or permits ("Governmental Licenses") issued
by the appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company, the Operating Partnership and the Subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or
in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and none of the Company, the Operating
Partnership or any Subsidiary 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 result in a
Material Adverse Effect.
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(xxi) ABSENCE OF LABOR DISPUTE. No material labor dispute
with the employees of the Company, the Operating Partnership or any of
the Subsidiaries exists or, to the knowledge of the Company, the
Operating Partnership or any of the Subsidiaries, is imminent; and the
Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal contractors which might be
expected to result in a Material Adverse Effect.
(xxii) LISTING. The Securities have been approved for listing
on the New York Stock Exchange, subject to official notice of
issuance.
(xxiii) INVESTMENT COMPANY ACT. None of the Company, the
Operating Partnership or any Subsidiary is, or upon the issuance and
sale of the Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus will be, an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms
are defined under the Investment Company Act of 1940, as amended (the
"1940 Act"), or is or will be required to be registered under the 1940
Act.
(xxiv) ENVIRONMENTAL LAWS. (A) Except as has been disclosed
in the Prospectus, the Communities, the properties managed by the
Management Company (the "Managed Properties") and any other real
property owned, occupied or operated by the Company, the Operating
Partnership or any Subsidiary, are presently operated in compliance
with all Environmental Laws (as defined below), except where a failure
to comply would not, either singly or in the aggregate, result in a
Material Adverse Effect.
(B) Except as has been disclosed in the Prospectus, there
are no Environmental Laws requiring any remediation, clean up,
repairs, construction or capital expenditures (other than normal
maintenance) with respect to the Communities or the Managed Properties
which would have, either singly or in the aggregate, a Material
Adverse Effect.
(C) No notices of any violation or alleged violation of any
Environmental Laws relating to the Communities or the Managed
Properties or their uses have been received by any of the Company, the
Operating Partnership, any Subsidiary or, to the best knowledge of the
Company and the Operating Partnership, by any prior owner, operator or
occupant of such properties, except for such violations which would
not, either singly or in the aggregate, result in a Material Adverse
Effect, and (ii) there are no writs, injunctions, decrees, orders or
judgments outstanding, or any actions, suits, claims, proceedings or
investigations pending or, to the best knowledge of the Company and
the Operating Partnership, threatened, relating to the ownership, use,
maintenance or operation of the Communities or the Managed Properties.
12
<PAGE>
(D) Except as has been disclosed in the Prospectus, all
material permits and licenses required under any Environmental Laws in
respect of the operations of the Communities or the Managed Properties
have been obtained, and such properties and the owners and operators
thereof are in compliance, in all material respects, with the terms
and conditions of such permits and licenses.
(E) All written reports of environmental surveys, audits,
investigations and assessments in the possession or control of the
Company and the Operating Partnership relating to the Communities (the
"Environmental Reports") have been disclosed or made available to the
Underwriters or their counsel.
(F) Except as set forth in the Environmental Reports,
neither any Community nor any Managed Property (i) is included or, to
the best knowledge of the Company, proposed for inclusion on the
National Priorities List issued pursuant to CERCLA (as defined below)
by the United States Environmental Protection Agency (the "EPA") or on
the Comprehensive Environmental Response, Compensation, and Liability
Information System database maintained by the EPA as a potential
CERCLA removal, remedial or response site or (ii) is included or, to
the best knowledge of the Company, proposed for inclusion on any
similar list of potentially contaminated sites pursuant to any other
applicable Environmental Law and none of the Company, the Operating
Partnership or any Subsidiary has received any written notice from the
EPA or any other Governmental Authority proposing the inclusion of any
Community or Managed Property on such list.
(G) Except as disclosed in the Environmental Reports, there
currently are no underground or above-ground storage tanks located on
or in any Community or Managed Property.
(H) "Environmental Law" means all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders,
demands, approvals, authorizations and similar items of all
governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial, administrative and
regulatory decrees, judgments and orders relating to the protection of
human health or the environment as in effect as of the date hereof,
including but not limited to those pertaining to reporting, licensing,
permitting, investigation and remediation of emissions, discharges,
releases or threatened releases of "Hazardous Materials," substances,
pollutants, contaminants or hazardous or toxic substances, materials
or wastes whether solid, liquid or gaseous in nature, into the air,
surface water, ground water or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of substances, pollutants, contaminants or hazardous or
toxic substances, materials, or wastes, whether solid, liquid or
13
<PAGE>
gaseous in nature, including by way of illustration and not by way of
limitation, (x) the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Sections 9601 ET SEQ.) ("CERCLA"), the
Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 ET
SEQ.), the Clean Air Act (42 U.S.C. Sections 7401 ET SEQ.), the
Federal Water Pollution Control, Act (33 U.S.C. Sections 1251), the
Safe Drinking Water Act (42 U.S.C. Sections 300f ET SEQ.), the Toxic
Substances Control Act (15 U.S.C. Sections 2601 ET SEQ.), the
Endangered Species Act (16 U.S.C. Sections 1531 ET SEQ.), the
Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.
Sections 11001 ET SEQ.), the Hazardous Materials Transportation Act,
as amended (49 U.S.C. Section 1801 ET SEQ.), the Clean Water Act, as
amended (33 U.S.C. Section 1251 ET SEQ.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. Section 136 ET SEQ.), and the
Occupational Safety and Health Act, as amended (29 U.S.C. Section 651
ET SEQ.), and (y) analogous state and local provisions.
(I) "Hazardous Material" means any chemical substance:
(i) the presence of which requires investigation or
remediation under any federal, state or local statute,
regulation, ordinance, order, action or policy, administrative
request or civil complaint under any of the foregoing or under
common law; or
(ii) which is defined as a "hazardous waste" or
"hazardous substance" under any federal, state or local statute,
regulation or ordinance or amendments thereto as in effect as of
the date hereof, or as hereafter amended, including, without
limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 ET SEQ.)
and or the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 ET SEQ.); or
(iii) which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and is regulated by any governmental
authority, agency, department, commission, board, agency or
instrumentality of the United States, or any state or any
political subdivision thereof having or asserting jurisdiction
over any of the Communities or the Managed Properties; or
(iv) the presence of which on any of the Communities or
the Managed Properties causes a nuisance upon such properties or
to adjacent properties or poses a hazard to the health or safety
of persons on or about any of the Communities or the Managed
Properties; or
(v) the presence of which on adjacent properties
constitutes a trespass by any owner or operator of the
Communities, the Managed Properties or any Other Property; or
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<PAGE>
(vi) which contains gasoline, diesel fuel or other
petroleum hydrocarbons, polychlorinated biphenyls (PCBs) or
asbestos or asbestos-containing materials or urea formaldehyde
foam insulation; or
(vii) radon gas.
(J) "Governmental Authority" shall mean any federal, state
or local governmental office, agency or authority having the duty
or authority to promulgate, implement or enforce any
Environmental Law.
(xxv) TITLE TO PROPERTY. The Operating Partnership, the
Financing Partnership or the Ashton Partnership has good and
marketable fee simple title to the land underlying each of the
Communities and good and marketable title to the improvements thereon
(in each case with title insurance thereon in full force and effect
and which is adequate in accordance with industry standards) and all
other assets that are required for the effective operation of such
Communities in the manner in which they are currently operated,
subject only to Permitted Exceptions (as herein defined); (B) all
liens, charges or encumbrances on or affecting any of the Communities
or the other property and assets of the Company, the Operating
Partnership or any of the Subsidiaries which are required to be
disclosed in the Prospectus are disclosed therein; (C) the Operating
Partnership or the Financing Partnership (or the Management Company as
agent for the Operating Partnership or the Financing Partnership) is
the lessor of all tenant leases at each of the Communities; (D) each
of the Communities complies in all material respects with all
applicable federal, state and local codes, laws and regulations
(including, without limitation, building and zoning codes, laws and
regulations and laws relating to handicapped access to the
Communities); (E) there are in effect for the property and assets of
the Company, the Operating Partnership and the Subsidiaries insurance
policies covering risks and in amounts that are commercially
reasonable for the types of assets owned by them and that are
consistent with the types and amounts of insurance typically
maintained by prudent owners of similar assets, and none of the
Company, the Operating Partnership or any Subsidiary has received from
any insurance company notice of any material defects or deficiencies
affecting the insurability of any such assets or any notices of
cancellation or intent to cancel any such policies; (F) none of the
Company, the Operating Partnership or any of the Subsidiaries has
knowledge of any pending or threatened condemnation proceedings,
zoning change, or other proceeding or action that will materially
adversely affect the size of, use of, improvements on, construction on
or access to the Communities; and (G) none of the Company, the
Operating Partnership nor any of the Subsidiaries has received from
any governmental authority notice of any violation of any federal,
state or municipal law, rule or regulation (including relating to
environmental matters) concerning the Communities or any part thereof
which has not heretofore been cured, except where a failure to
15
<PAGE>
cure would not result in a Material Adverse Effect. As used in this
Agreement, "Permitted Exceptions" means: (i) real estate taxes and
assessments not yet delinquent; (ii) covenants, restrictions,
easements and other similar agreements, provided that the same are not
violated by existing improvements or the current use and operation of
a Community; (iii) zoning laws, ordinances and regulations, building
codes, rules and other governmental laws, regulations, rules and
orders affecting each Community, provided that the same are not
violated by existing improvements or the current use and operation of
a Community; (iv) any state of facts disclosed by the surveys relating
to the Communities previously provided to the Representatives; (v)
mortgage financing as described in the Prospectus.
(xxvi) RIGHT OF FIRST REFUSAL. No person or entity has any
option or right of first refusal to purchase all or any part of any
Community or Development Right or any interest therein.
(xxvii) TAX RETURNS. Each of the Company, the Operating
Partnership and the Subsidiaries has filed all federal, state, local
and foreign income, franchise, sales and other tax returns which have
been required to be filed and has paid all taxes required to be paid
and any other assessment, fine or penalty levied against it, to the
extent that any of the foregoing is due and payable, except, in all
cases, for any such tax, assessment, fine or penalty that is being
contested in good faith through appropriate proceedings and as to
which appropriate reserves have been established.
(xxviii) RULE 10b-6. None of the Company, the Operating
Partnership, the Subsidiaries or any of their respective directors,
officers or controlling persons, has taken or will take, directly or
indirectly, any action resulting in a violation of Rule 10b-6 under
the 1934 Act, or designed to cause or result in, or that has
constituted or that reasonably might be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(xxix) REGISTRATION RIGHTS. Except for the Selling
Shareholders (i) there are no persons with registration or other
similar rights to have any securities registered pursuant to the
Registration Statement and (ii) there are no other persons with
registration or other similar rights to have any securities otherwise
registered by the Company under the 1933 Act, except, in the case of
(ii) above, holders of Units issued in connection with the Company's
purchase of the Ashton Apartments in Corona Hills, California and
Acacia Creek in Scottsdale, Arizona, Messrs. Evans and Withycombe and
the Continuing Investors (as defined in the Company's initial public
offering prospectus).
(xxx) BROKER'S FEES. Neither the Company nor the Operating
Partnership has incurred any liability for finder's or broker's fees
or agent's
16
<PAGE>
commissions (other than those payable to the Underwriters) in
connection with the execution and delivery of this Agreement, the
offer and sale of the Securities or the transactions contemplated
hereby.
(xxxi) REGISTRATION AS BROKER. Neither the Company, the
Operating Partnership nor any Subsidiary is required to register as a
"broker" or "dealer" in accordance with the provisions of the 1934 Act
or the rules and regulations promulgated thereunder.
(xxxii) COMPLIANCE WITH CUBA ACT. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder (collectively, "Cuba Act") or is
exempt therefrom.
(b) REPRESENTATIONS AND WARRANTIES BY THE SELLING SHAREHOLDERS. Each
Selling Shareholder severally represents and warrants to each Underwriter as of
the date hereof, as of the Closing Time, and, if the Selling Shareholder is
selling Option Securities on a Date of Delivery, as of each such Date of
Delivery Date, and agrees with each Underwriter, as follows:
(i) ACCURATE DISCLOSURE. (A) To the best knowledge of such
Selling Shareholder, the representations and warranties of the Company contained
in Section 1(a) hereof are true and correct (except to the extent such
representations and warranties relate to a Selling Shareholder other than such
Selling Shareholder); (B) such Selling Shareholder has reviewed and is familiar
with the Registration Statement and the Prospectus and, to the best knowledge of
such Selling Shareholder, the Prospectus does not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; (C) such Selling Shareholder is not prompted to sell the
Securities to be sold by such Selling Shareholder hereunder by any information
concerning the Company, the Operating Partnership or any Subsidiary of the
Company which is not set forth in the Prospectus.
(ii) AUTHORIZATION OF AGREEMENTS. Such Selling Shareholder has
the full right, power and authority to enter into this Agreement and the Power
of Attorney and Custody Agreement (as defined in Section 1(b)(iv) below) and to
sell, transfer and deliver the Securities to be sold by such Selling Shareholder
hereunder. The execution and delivery of this Agreement and the Power of
Attorney and Custody Agreement and the sale and delivery of the Securities to be
sold by such Selling Shareholder and the consummation of the transactions
contemplated herein and compliance by such Selling Shareholder with its
obligations hereunder have been duly authorized by such Selling Shareholder and
do not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any tax, lien, charge or encumbrance
upon the Securities to be sold by such Selling Shareholder or any property or
assets of such Selling Shareholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, license, lease or other
agreement or
17
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instrument to which such Selling Shareholder is a party or by which such Selling
Shareholder may be bound, or to which any of the property or assets of such
Selling Shareholder is subject, nor will such action result in any violation of
the provisions of the charter or by-laws, or other organizational instrument of
such Selling Shareholder, if applicable, or any applicable treaty, law, statute,
rule, regulation, judgment, order, writ or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over such Selling Shareholder or any of its properties.
(iii) GOOD AND MARKETABLE TITLE. Such Selling Shareholder has
and will, at the Closing Time, and, if any Option Securities are sold by such
Selling Shareholder, on the Date of Delivery, have good and marketable title to
the Securities to be sold by such Selling Shareholder hereunder, free and clear
of any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind, other than pursuant to this Agreement; and upon
delivery of such Securities and payment of the purchase price therefor as herein
contemplated, each of the Underwriters will receive good and marketable title to
the Securities purchased by it from such Selling Shareholder, free and clear of
any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
(iv) DUE EXECUTION OF POWER OF ATTORNEY AND CUSTODY AGREEMENT.
Such Selling Shareholder has duly executed and delivered, in the form heretofore
furnished to the Representatives, a Power of Attorney and Custody Agreement (the
"Power of Attorney and Custody Agreement") with Stephen O. Evans, Chairman of
the Board and Chief Executive Officer of the Company, and Paul R. Fannin, Senior
Vice President and Chief Financial Officer of the Company, respectively, as
attorneys-in-fact (individually, an "Attorney-in-Fact"), and Norwest Bank of
Minnesota, N.A. as custodian (the "Custodian"); the Custodian is authorized to
deliver the Securities to be sold by such Selling Shareholder hereunder and to
accept payment therefor; and each Attorney-in-Fact is authorized to execute and
deliver this Agreement and the certificate referred to in Section 5(e) or that
may be required pursuant to Sections 5(j) and 5(l) on behalf of such Selling
Shareholder, to sell, assign and transfer to the Underwriters the Securities to
be sold by such Selling Shareholder hereunder, to determine the purchase price
to be paid by the Underwriters to such Selling Shareholder, as provided in
Section 2(a) hereof, to authorize the delivery of the Securities to be sold by
such Selling Shareholder hereunder, to accept payment therefor, and otherwise to
act on behalf of such Selling Shareholder in connection with this Agreement.
(v) ABSENCE OF MANIPULATION. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is designed
to or which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
consent, approval, authorization, order, registration, qualification or decree
of, any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by such Selling Shareholder of its
obligations hereunder or in the Power of Attorney and Custody Agreement, or in
connection with the sale and delivery of the Securities hereunder or the
consummation of the transactions contemplated by this
18
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Agreement, except such as may have previously been made or obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state securities
laws.
(vii) RESTRICTION ON SALE OF SECURITIES. During a period of 120
days from the date of the Prospectus, such Selling Shareholder will not, without
the prior written consent of Merrill Lynch, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any share of Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Shares, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Shares or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to the Securities to be sold hereunder.
(viii) CERTIFICATES SUITABLE FOR TRANSFER. Certificates for all
of the Securities to be sold by such Selling Shareholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank with signatures
guaranteed, have been placed in custody with the Custodian with irrevocable
conditional instructions to deliver such Securities to the Underwriters pursuant
to this Agreement.
(ix) NO ASSOCIATION WITH NASD. Neither such Selling Stockholder
nor any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
or has any other association with (within the meaning of Article I, Section 1(m)
of the Bylaws of the National Association of Securities Dealers, Inc.), any
member firm of the National Association of Securities Dealers, Inc. who will
participate in the public offering of the Securities.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company or by a partner of the Operating Partnership and delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by each of the Company and the Operating Partnership
to each Underwriter as to the matters covered thereby; and any certificate
signed by or on behalf of a Selling Shareholder as such and delivered to the
Representatives or to counsel for the Underwriters pursuant to the terms of this
Agreement shall be deemed a representation and warranty by such Selling
Shareholder to the Underwriters as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and each Selling Shareholder, severally and not jointly,
agree to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase
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<PAGE>
from the Company and each Selling Shareholder, at the price per share set forth
in Schedule C, that proportion of the number of Initial Securities set forth in
Schedule B opposite the name of the Company or such Selling Shareholder, as the
case may be, which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter, plus any additional number of Initial
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof, bears to the total number of Initial
Securities, subject, in each case, to such adjustments among the Underwriters as
the Representatives in their sole discretion shall make to eliminate any sales
or purchases of fractional securities.
(b) OPTION SECURITIES. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Selling Shareholders and the Company hereby
collectively grant an option to the Underwriters to purchase up to an additional
675,000 Common Shares at the price per share set forth in Schedule C. The
option hereby granted will expire 30 days after the date hereof 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 the Representatives to the
Company and the Selling Shareholders 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 the Closing Time. If the
option is exercised as to all or any portion of the Option Securities, the
Company shall determine the number of Common Shares, if any, to be sold by the
Company (which shall not exceed 300,000 Common Shares) and the Selling
Shareholders (provided that any Option Securities to be sold by the Selling
Shareholders shall be in proportion to the number of Initial Securities sold by
them). 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, 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. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Gibson,
Dunn & Crutcher, 333 South Grand Avenue, Los Angeles, California 90071; or at
such other place as shall be agreed upon by the Representatives, the Company and
the Selling Shareholders, at 7:00 a.m. (Los Angeles time), on the third (fourth,
if the pricing occurs after 4:30 p.m. Eastern Time on any given day) business
day after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than seven business days after such
date as shall be agreed upon by the Representatives, the Company and the Selling
Shareholders (such time and date of payment and delivery being herein called the
"Closing Time").
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In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices of Gibson, Dunn & Crutcher, or at such other place as shall be agreed
upon by the Representatives, the Company and the Selling Shareholders, on each
Date of Delivery as specified in the notice from the Representatives to the
Company and the Selling Shareholders.
Payment shall be made to the Company and the Selling Shareholders, as
applicable, by wire transfer of immediately available funds or similar same day
funds payable to the order of the Company and to the Custodian, or as the
Custodian may direct, pursuant to each Selling Shareholder's Power of Attorney
and Custody Agreement, as the case may 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 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 check
has not been received by the 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 in the City of New York not later than 10:00 a.m.
(Eastern time) on the last business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. Each of the Company and the
Operating Partnership, jointly and severally, covenants with each Underwriter as
follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
Subject to Section 3(b), the Company will comply with the requirements of Rule
430A and will notify the Representatives immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statement
becomes effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (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 of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file
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such prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment. If the Company elects to rely
on Rule 434, the Company will provide the Underwriters with copies of the form
of Rule 434 Prospectus, in such number as the Underwriters may reasonably
request, and file or transmit for filing with the Commission the form of
Prospectus complying with Rule 434 of the 1933 Act in accordance with Rule
424(b) of the 1933 Act Regulations by the close of business in New York on the
business day immediately succeeding the date of this Agreement.
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such documents to which the Representatives or counsel for the Underwriters
shall reasonably object.
(c) RULE 434. If the Company uses Rule 434, it will comply with the
requirements of Rule 434.
(d) DELIVERY OF REGISTRATION STATEMENT. The Company will deliver to
each of the Representatives and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to each of the Representatives, without charge,
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (excluding exhibits) for each of the Underwriters. The copies
of the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) DELIVERY OF PROSPECTUSES. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, 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) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
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(f) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If at any
time when a prospectus is required by the 1933 Act to be delivered in connection
with sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(g) BLUE SKY QUALIFICATIONS. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities 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 qualify as a foreign corporation in
any jurisdiction in which it is not so qualified, to file any general consent to
service of process or to subject itself to taxation. 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 effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(h) RULE 158. The Company will make generally available to its
security holders as soon as practicable, but not later than 90 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.
(i) USE OF PROCEEDS. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the Prospectus
under the heading "USE OF PROCEEDS."
(j) LISTING. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(k) REGISTRATION ON SALE OF SECURITIES. During a period of 120 days
from the date hereof, the Company and the Operating Partnership will not,
without the prior
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written consent of Merrill Lynch, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, any Common Shares or Units or any other
security convertible into or exchangeable or exercisable for Common Shares or
Units or file any registration statement under the 1933 Act with respect to any
of the foregoing, or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such swap or
transaction described in (i) or (ii) above is to be settled by delivery of
Common Shares or Units or such other securities, in cash or otherwise, except
for (A) Common Shares issued pursuant to this Agreement, (B) Common Shares
issued or options to purchase Common Shares granted pursuant to existing
employee benefit plans of the Company, (C) Common Shares or Units issued in
exchange for the acquisition of additional multifamily apartment communities or
interests therein (PROVIDED that the recipients of such Common Shares or Units
referred to in clause (C) above agree in writing to lock-up provisions
substantially identical to those contained in the Lock-Up Agreement attached
hereto as Exhibit B) or (D) Common Shares issued upon redemption of Units.
(l) REIT QUALIFICATION. The Company has, since its formation,
operated in such a manner, and will continue to operate in such a manner, as to
qualify for taxation as a "real estate investment trust" under the Code.
(m) ACTION BY COMPANY REGARDING PRICE OF SECURITIES. Except for the
authorization of actions permitted to be taken by the Underwriters as
contemplated herein or in the Prospectus, neither the Company nor the Operating
Partnership will (i) take, directly or indirectly, any action designed to cause
or to result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities, (ii) sell, bid for or purchase
the Securities or pay any person any compensation for soliciting purchases of
the Securities or (iii) pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(n) CUBA ACT. In accordance with the Cuba Act and without limitation
to the provisions of Sections 6 and 7 hereof, the Company agrees to indemnify
and hold harmless the Underwriters from and against any and all loss, liability,
claim, damage and expense whatsoever (including fees and disbursements of
counsel), as incurred, arising out of any violation by the Company of the Cuba
Act.
(o) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(p) REPRESENTATIONS AND WARRANTIES. Prior to the Closing Time, the
Company and the Operating Partnership will notify the Representatives in writing
immediately if (i) any event occurs that renders any of the representations and
warranties of
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the Company and the Operating Partnership contained herein inaccurate or
incomplete in any material respect or (ii) with respect to the representations
and warranties of the Company and the Operating Partnership contained herein
that are limited to materiality of the Company, the Operating Partnership and
the Subsidiaries considered as one enterprise, any matter or event occurs that
would render such representation or warranty inaccurate or incomplete if given
with respect to the Company, the Operating Partnership or any Subsidiary on an
individual basis.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the printing
(or reproduction) and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the preparation, issuance and delivery of
the certificates for the Securities to the Underwriters, including any stock or
other transfer taxes or duties payable upon the sale of the Securities to the
Underwriters, (iii) the fees and other charges of the Company's counsel,
accountants and other advisors, (iv) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(g) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (v) the printing (or
reproduction) and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto and of the
Prospectus and any amendments or supplements thereto, (vi) the printing (or
reproduction) and delivery to the Underwriters of copies of the Blue Sky Survey,
(vii) the fees of the National Association of Securities Dealers, Inc. ("NASD"),
including the reasonable fees and other charges of counsel for the Underwriters
in connection with the NASD's review of the terms of the proposed public
offering of the Securities, (viii) the fees and expenses incurred in connection
with the listing of the Common Shares on the New York Stock Exchange (ix) the
fees and expenses of any transfer agent or registrar for the Securities, and (x)
the fees and disbursements of counsel for the Selling Shareholders to the extent
required by the Registration Rights Agreement dated as of August 17, 1994 by and
among the Company and the holders on Exhibit A thereto (the "Registration Rights
Agreement").
(b) EXPENSES OF SELLING SHAREHOLDERS. Each Selling Shareholder will
pay all expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by this Agreement, including
(i) any stamp duties, capital duties and stock transfer taxes, if any, payable
upon the sale of the Securities to the Underwriters and the transfer among the
Underwriters pursuant to an agreement among such Underwriters and (ii) the fees
and disbursements of their respective counsel and accountants except for any
such fees and expenses that are payable by the Company as provided in the
Registration Rights Agreement.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) or Section
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11 hereof, the Company shall reimburse the Underwriters for all of their out-of-
pocket expenses, including the reasonable fees and other charges of counsel for
the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company, the Operating Partnership and the Selling
Shareholders contained in Section 1 hereof or in certificates of any officer of
the Company or any Subsidiary, any partner of the Operating Partnership or on
behalf of any Selling Shareholder delivered pursuant to the provisions hereof,
to the performance by the Company, the Operating Partnership and the Selling
Shareholders of their respective obligations hereunder, and to the following
further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, shall have become
effective, and at the 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, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission 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 in accordance with the requirements of the 1933 Act
Regulations. If the Company has elected to rely upon Rule 434, a Term Sheet
shall have been filed with the Commission in accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR COMPANY. At the Closing Time, the
Representatives shall have received:
(i) The favorable opinion, dated as of the Closing Time, of
Gibson, Dunn & Crutcher LLP, counsel for the Company and the Operating
Partnership, in form and substance reasonably satisfactory to counsel
for the Underwriters, to the effect that:
(A) The Company is duly qualified as a foreign corporation
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
except where the failure to so qualify would not result in a
Material Adverse Effect.
(B) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under the heading
"CAPITALIZATION" (except for subsequent issuances, if any,
pursuant to this Agreement or pursuant to reservations,
agreements or
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employee benefit plans referred to in the Prospectus or pursuant
to the exercise of convertible securities or options referred to
in the Prospectus). To the best knowledge of such counsel,
except as set forth in the Prospectus, there are no preemptive or
other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any Common Shares pursuant to any
agreement or instrument.
(C) The Operating Partnership has been duly organized and
is validly existing as a limited partnership in good standing
under the Delaware Act. The Operating Partnership has full
partnership power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged or
proposes to engage as described in the Prospectus and to enter
into and perform its obligations under this Agreement.
(D) The Operating Partnership is duly qualified as a
foreign partnership 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, except where the failure to so qualify would
not have a Material Adverse Effect.
(E) The outstanding Units were duly authorized for issuance
by the Operating Partnership to the holders thereof and are
validly issued. The Company is the sole general partner of the
Operating Partnership and, immediately prior to the sale of the
Securities, is the holder of 16,179,379 of the 20,945,627 issued
and outstanding Units and immediately following the Closing Time
will be the holder of 18,179,379 of the issued and outstanding
Units.
(F) Each of Evans Withycombe Finance, Inc. and the
Financing Partnership has been duly organized and is validly
existing as a corporation or partnership in good standing under
the laws of the State of Delaware and the Ashton Partnership is
validly existing as a partnership in good standing under the laws
of the State of California. Each of Evans Withycombe Finance,
Inc., the Financing Partnership and the Ashton Partnership has
full corporate or partnership power and authority to own, lease
and operate its properties and to conduct the business in which
it is engaged or proposes to engage as described in the
Prospectus. Each of Evans Withycombe Finance, Inc., the
Financing Partnership and the Ashton Partnership is duly
qualified or registered as a foreign corporation or partnership
to transact business and is in good standing in each jurisdiction
in which qualification to transact business is required, whether
by reason of the ownership or leasing of property or the conduct
of business, except where the failure
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to so qualify would not result in a Material Adverse Effect. All
of the issued shares of capital stock of Evans Withycombe
Finance, Inc. have been duly authorized and are validly issued,
fully paid and nonassessable and are owned of record by the
Company to the best knowledge of such counsel, free and clear of
all liens, charges and encumbrances. The partnership units of
the Financing Partnership have been authorized for issuance to
Evans Withycombe Finance, Inc. and the Operating Partnership and
are validly issued and fully paid, to the knowledge of such
counsel, free and clear of all liens, charges and encumbrances.
To the best knowledge of such counsel, all of the partnership
interests of the Ashton Partnership are owned by the Operating
Partnership and the Company, free and clear of all liens, charges
and encumbrances.
(G) This Agreement has been duly authorized, executed and
delivered by the Operating Partnership.
(H) To the knowledge of such counsel, there is no action,
suit or proceeding before or by any court or governmental agency
or body, domestic or foreign, now pending or threatened against
the Company, the Operating Partnership or any Subsidiary that is
required to be disclosed in the Registration Statement which is
not disclosed therein. To the knowledge of such counsel, there
are no contracts, indentures, mortgages, loan agreements, notes,
lease or other instruments of a character which are required to
be described or referred to in the Registration Statement or to
be filed as exhibits thereto by the 1933 Act or by the 1933 Act
Regulations, other than those described or referred to therein or
filed as exhibits thereto, and the descriptions thereof or
references thereto in the Registration Statement are correct and
accurate in all material respects.
(I) No consent, approval, authorization of any governmental
agency or authority or, to the knowledge of such counsel, no
order of any court, is required to be obtained by the Company,
the Operating Partnership or any Subsidiary in connection with
the offering, issuance or sale of the Securities under this
Agreement, except such as may be required under the 1933 Act or
the 1933 Act Regulations or state securities laws of any state or
other jurisdiction and except for such as have been obtained.
(J) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
herein by the Company and the Operating Partnership do not and
will not contravene any provision of the Delaware Act, the
Delaware General Corporation Law, California law or federal laws,
do not and will not conflict with or constitute a breach of, or
default under, or
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result in the creation or imposition of any lien, charge or
encumbrance upon any of the Communities or any other property or
assets of the Company, the Operating Partnership or any
Subsidiary pursuant to any agreement or instrument filed as an
exhibit to the Registration Statement or to the documents
incorporated by reference into the Prospectus, nor has any such
action resulted or will such action result in any violation of
the charter, bylaws, certificate of limited partnership,
partnership agreement or other governing document, as the case
may be, of the Operating Partnership, the Financing Partnership
or Evans Withycombe Finance, Inc. or, to such counsel's
knowledge, any judgment, ruling, order, regulation or
administrative or court decree applicable to the business or
properties of such entities.
(K) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the
1933 Act; any required filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated before or threatened by the
Commission.
(L) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule
434 Information, as applicable, the Prospectus, excluding the
documents incorporated by reference therein, and each amendment
or supplement to the Registration Statement and Prospectus,
excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the
financial statements and supporting schedules and other financial
and related statistical data included therein or omitted
therefrom, as to which no opinion need be rendered) complied as
to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations.
(M) The documents incorporated by reference in the
Prospectus (other than the financial statements and supporting
schedules and other financial and related statistical data
included therein or omitted therefrom, as to which no opinion
need be rendered), when they became effective or were filed with
the Commission, as the case may be, complied as to form in all
material respects with the requirements of the 1933 Act or the
1934 Act, as applicable, and the rules and regulations of the
Commission thereunder.
(N) The information in the Prospectus under "FEDERAL INCOME
TAX CONSIDERATIONS," to the extent that it constitutes matters of
law, summaries of legal matters, documents, proceedings or
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legal conclusions, has been reviewed by such counsel and is
correct in all material respects.
(O) The Company has been and is organized in conformity
with the requirements for qualification as a REIT under the Code,
and its method of operation has at all times enabled, and its
proposed method of operation as described in the Prospectus and
as represented by management will enable, it to meet the
requirements for taxation as a REIT under the Code.
(P) None of the Company, the Operating Partnership or any
Subsidiary is an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined under the 1940 Act, or is or
will be required to be registered under the 1940 Act.
(Q) Each of the Operating Partnership and the Financing
Partnership has at all times been treated, and, since its
acquisition by the Company, the Ashton Partnership has been
treated, and each of them will be treated, for federal income tax
purposes as a partnership and not as an association taxable as a
corporation or publicly traded partnership.
(R) Evans Withycombe Finance, Inc. has at all times been
treated, and will be treated, as a "qualified REIT subsidiary"
under Section 856(i) of the Code.
(ii) The favorable opinion, dated as of the Closing Time, of
Ballard Spahr Andrews & Ingersoll, counsel for the Company and the
Operating Partnership with respect to matters of Maryland law, in form
and substance reasonably satisfactory to counsel for the Underwriters,
to the effect that:
(A) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland.
(B) The Company has the full corporate power and corporate
authority to own, lease and operate its properties, to conduct
the business in which it is engaged or proposes to engage as
described in the Prospectus and to enter into and perform its
obligations under this Agreement.
(C) All of the issued and outstanding Common Shares,
including the Securities to be purchased by the Underwriters from
the Selling Shareholders, have been duly authorized and validly
issued and are fully paid and nonassessable and none of the
outstanding shares of
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capital stock of the Company was issued in violation of the
preemptive or other similar rights of any securityholder of the
Company arising under the Maryland General Corporation Law, the
charter or bylaws of the Company or, to such counsel's knowledge,
otherwise.
(D) The authorized capital stock of the Company conforms to
the description thereof incorporated by reference into the
Prospectus. Except for options under the 1994 Stock Option Plan
and Units of the Operating Partnership, there are (i) to such
counsel's knowledge no outstanding securities convertible into or
exchangeable for any shares of capital stock of the Company and
(ii) no outstanding options, rights (preemptive or otherwise) or
warrants to purchase or to subscribe for such shares or any other
securities of the Company pursuant to the Company's charter or
bylaws, or to such counsel's knowledge, any agreement or other
instrument to which the Company is a party or by which it is
bound.
(E) The Company has duly authorized and reserved a
sufficient number of Common Shares for issuance upon redemption
of outstanding Units issued by the Operating Partnership as
contemplated by the Partnership Agreement and for issuance upon
the exercise of options under the 1994 Stock Option Plan.
(F) The form of share certificate evidencing the Common
Shares (including the Securities) is in due and proper form and
complies with all applicable requirements of the Maryland General
Corporation Law, with any applicable requirements of the charter
and bylaws of the Company and the requirements of the New York
Stock Exchange.
(G) The Securities to be purchased by the Underwriters from
the Company 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 Schedule B hereto, (i)
will be validly issued, fully paid and nonassessable, and (ii) no
holder of Securities is or will be subject to personal liability
for the obligations of the Company solely by reason of being such
a holder.
(H) The issuance and sale of the Securities by the Company
and the sale of the Securities by the Selling Shareholders is not
subject to preemptive or other similar rights arising under the
Maryland General Corporation Law, the charter or bylaws of the
Company or, to such counsel's knowledge, otherwise.
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(I) This Agreement has been duly authorized, executed and
delivered by the Company, in its individual capacity and in its
capacity as the general partner of the Operating Partnership.
(J) No consent, approval, authorization, order of or
qualification with any court or governmental agency or authority
or other entity is required to be obtained by the Company, the
Operating Partnership or any Subsidiary under the Maryland
General Corporation Law in connection with the offering, issuance
or sale of the Securities under this Agreement except for such as
have been obtained.
(K) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
herein do not and will not contravene any provision of the
Maryland General Corporation Law, nor has any such action
resulted or will such action result in any violation of the
charter or bylaws of the Company, or, to such counsel's
knowledge, any judgment, ruling, order, regulation or
administrative or court decree issued under or pursuant to the
Maryland General Corporation Law and applicable to the business
or properties of the Company.
(iii) The favorable opinion, dated as of the Closing Time, of
Reid W. Butler, Senior Vice President, General Counsel and Secretary
of the Company, in form and substance reasonably satisfactory to
counsel for the Underwriters, to the effect that:
(A) The Management Company has been duly organized and is
validly existing as a corporation in good standing under the laws
of the State of Arizona. The Management Company has full
corporate power and authority to own, lease and operate its
properties and to conduct the business in which it is engaged or
proposes to engage as described in the Prospectus. The
Management Company is duly qualified or registered as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which qualification to transact business is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to
so qualify would not result in a Material Adverse Effect. All of
the issued shares of capital stock of the Management Company have
been duly authorized and are validly issued, fully paid and
nonassessable and, to the knowledge of such counsel, are owned of
record as described in the Company's initial public offering
prospectus, free and clear of all liens, charges and
encumbrances.
(B) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
herein (i) do not contravene any provision of Arizona law, (ii)
did not
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and will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the Communities or any other
property or assets of the Company, the Operating Partnership or
any Subsidiary, (iii) to such counsel's knowledge, did not and
will not constitute a breach of, or default under any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Management Company is a party or by which
the Management Company may be bound, or to which any of the
property or assets of the Management Company is subject, and (iv)
will not result in any violation of the charter or bylaws of the
Management Company or, to such counsel's knowledge, any judgment,
ruling, order, regulation or administrative or court decree
applicable to the business or properties of the Management
Company, except such conflict, violation or breach which would
not result in a Material Adverse Effect.
(C) Except for the Selling Shareholders (i) there are no
persons with registration or other similar rights to have any
securities of the Company registered pursuant to the Registration
Statement and (ii) there are no other persons with registration
or other similar rights to have any securities otherwise
registered by the Company under the 1933 Act, except, in the case
of (ii) above, holders of Units issued in connection with the
Company's purchase of the Ashton Apartments in Corona Hills,
California and Acacia Creek in Scottsdale, Arizona, Messrs. Evans
and Withycombe and the Continuing Investors (as defined in the
Company's initial public offering prospectus).
(iv) The favorable opinion, dated as of the Closing Time, of
Latham & Watkins, counsel for the Underwriters, with respect to such
matters as the Representatives may reasonably request.
(v) In giving their opinions required by subsections (b)(i) and
(b)(iv), respectively, of this Section 5, Gibson, Dunn & Crutcher LLP
and Latham & Watkins shall each additionally state that nothing has
come to their attention that would lead them to believe that the
Registration Statement (except for financial statements and schedules
and other financial and related statistical data included or
incorporated by reference therein, as to which counsel need make no
statement), at the time it became effective, 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 (except for financial
statements and schedules and other financial and related statistical
data included or incorporated by reference therein, as to which
counsel need make no statement), at the time the Prospectus was issued
(unless the term "Prospectus" refers to a prospectus which has been
provided to the Underwriters by the Company for use in connection with
the offering of Securities which differs from the Prospectus on
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file at the Commission at the time the Registration Statement becomes
effective, in which case at the date of such prospectus), 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. In giving its opinion,
Gibson, Dunn & Crutcher LLP and Latham & Watkins may rely as to
matters of Maryland law upon the opinion of Ballard Spahr Andrews &
Ingersoll, which opinions shall be in form and substance reasonably
satisfactory to counsel for the Underwriters. Each such opinion
required by subsections (b)(i) and (b)(iv) shall not state that it is
to be governed or qualified by, or that it is otherwise subject to,
any treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion Accord of
the ABA Section of Business Law (1991).
(c) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS. At Closing
Time, the Representatives shall have received the favorable opinion, dated as of
the Closing Time, of Sullivan & Worcester LLP, counsel for AEW, and of Hale and
Dorr, counsel for Copley, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters to the effect set forth in Exhibit A hereto.
(d) CLOSING MATTERS. At the Closing Time, (i) the Registration
Statement and the Prospectus shall contain all statements that are required to
be stated therein in accordance with the 1933 Act and the 1933 Act Regulations
and in all material respects shall conform to the requirements of the 1933 Act
and the 1933 Act Regulations, and neither the Registration Statement nor the
Prospectus shall contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, (ii) the representations and
warranties in Section 1 hereof shall be true and correct with the same force and
effect as though expressly made at and as of the Closing Time, (iii) 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 Effect, whether or
not arising in the ordinary course of business, (iv) no action, suit or
proceedings at law or in equity shall be pending or, to the knowledge of the
Company or the Operating Partnership, threatened against such entity or any
Subsidiary before or by any court or governmental agency wherein an unfavorable
decision, ruling or finding might result in any Material Adverse Effect other
than as set forth in the Prospectus, (v) no stop order suspending the
effectiveness of the Registration Statement or any part thereof has been issued
and no proceedings for that purpose have been instituted or, to the knowledge of
the Company or the Operating Partnership, threatened by the Commission or by the
state securities authority of any jurisdiction and (vi) the Representatives
shall have received, at the Closing Time, a Certificate of the Chairman of the
Board and Chief Executive Officer and the chief financial or chief accounting
officer of the Company, in its individual capacity and as the general partner of
the Operating Partnership, dated as of the Closing Time, stating its compliance
with subparagraphs (i) through (v) of this subsection (d), and stating that each
of
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the Company and the Operating Partnership has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
Closing Time. As used in this Section 5(d) the term "Prospectus" means the
Prospectus in the form first used by the Underwriter to confirm sales of the
Securities.
(e) CERTIFICATE OF SELLING SHAREHOLDERS. At Closing Time, the
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of Closing Time, to the effect that
(i) the representations and warranties of each Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same force and
effect as though expressly made at and as of Closing Time and (ii) each Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
(f) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of
this Agreement, the Representatives shall have received from Ernst & Young LLP a
letter dated such date, in form and substance reasonably satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements, pro forma financial statements and pro
forma and adjusted financial statements and information of the Company and its
affiliates and certain financial information contained in the Registration
Statement and the Prospectus.
(g) BRING-DOWN COMFORT LETTER. At the Closing Time, the
Representatives shall have received from Ernst & Young LLP a letter, dated as of
the Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (f) of this Section 5, except that the
specified date referred to shall be a date not more than five days prior to the
Closing Time.
(h) APPROVAL OF LISTING. At or prior to the Closing Time, the
Securities shall have been duly listed on the New York Stock Exchange, subject
only to official notice of issuance.
(i) NO OBJECTION. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(j) LOCK-UP AGREEMENT. On or before the date of this Agreement, the
Representatives shall have received a lock-up agreement, substantially in the
form of Exhibit B hereto, signed by each of the persons listed on Schedule D
hereto.
(k) ADDITIONAL DOCUMENTS. At the 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 request 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
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Company and the Selling Shareholders 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.
(l) CONDITIONS TO PURCHASE OF OPTION SECURITIES. 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 of the Company and the Operating Partnership contained herein and the
statements in any certificates furnished by the Company and the Operating
Partnership hereunder shall be true and correct in all material respects as of
each Date of Delivery and, at the relevant Date of Delivery, the Representatives
shall have received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery, of the Chairman of the Board and Chief Executive Officer and
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) SELLING SHAREHOLDER CERTIFICATES. A certificate, dated such
Date of Delivery, of an Attorney-in-Fact on behalf of each Selling
Shareholder confirming that the certificate delivered at Closing Time
pursuant to Section 5(e) remains true and correct as of such Date of
Delivery.
(iii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion
of Gibson, Dunn & Crutcher LLP, counsel for the Company and the
Operating Partnership, in form and substance reasonably 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 Sections
5(b)(i) and 5(b)(v) hereof.
(iv) OPINION OF MARYLAND COUNSEL FOR COMPANY. The favorable
opinion of Ballard Spahr Andrews & Ingersoll Maryland counsel for the
Company and the Operating Partnership, in form and substance
reasonably 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)(ii) hereof.
(v) OPINION OF THE COMPANY'S SENIOR VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY. The favorable opinion of Reid W. Butler,
Senior Vice President, General Counsel and Secretary of the Company,
in form and substance reasonably 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)(iii).
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(vi) OPINION OF COUNSEL FOR AEW AND OF COUNSEL FOR COPLEY. The
favorable opinion of Sullivan & Worcester LLP, counsel for AEW, and of
Hale and Dorr, counsel for Copley, 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 Sections 5(c).
(vii) OPINION OF COUNSEL FOR UNDERWRITERS. The favorable
opinion of Latham & Watkins, 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 Sections 5(b)(iv) and 5(b)(v) hereof.
(viii) BRING-DOWN COMFORT LETTER. A letter from Ernst & Young
LLP in form and substance satisfactory to the Representatives and
dated such Date of Delivery, substantially the same in form and
substance as the letter furnished to the Representatives pursuant to
Section 5(f) hereof, except that the "specified date" in the letter
furnished pursuant to this Paragraph shall be a date not more than
five days prior to such Date of Delivery.
If any condition specified in this Section 5 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 and the Selling Shareholders at any
time at or prior to the Closing Time or such Date of Delivery, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6 and 7 hereof shall survive
any such termination and remain in full effect.
SECTION 6. INDEMNIFICATION.
Each of the Company and the Operating Partnership agrees, jointly
and severally, to indemnify and hold harmless each Underwriter 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
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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 agency or body, commenced or
threatened, or of any claim whatsoever for which indemnification is
provided under subsection (i) above, if (subject to Section 6(e)
below) such settlement is effected with the written consent of the
Company and the Operating Partnership; and
(iii) against any and all expense whatsoever (including, the
fees and charges of counsel chosen by Merrill Lynch), 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 for
which indemnification is provided under subsection (i) above, to the
extent that any such expense is not paid under subsection (i) or (ii)
above;
PROVIDED, HOWEVER, that 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 contained in the last paragraph
on the front cover page, the last paragraph on the inside front cover page and
the second paragraph in the section of the Prospectus under the heading
"UNDERWRITING" and furnished to the Company by any Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and PROVIDED FURTHER, that this indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
liabilities, claims, damages or expenses purchased Securities, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any such amendments or
supplements thereto, but excluding documents incorporated or deemed to be
incorporated by reference therein) was not sent or given by or on behalf of such
Underwriter to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Securities to such person and if the
Prospectus (as so amended or supplemented, if applicable) would have completely
corrected the defect giving rise to such loss, liability, claim, damage or
expense, except that this proviso shall not be applicable if such defect shall
have been corrected in a document which is incorporated or deemed to be
incorporated by reference in the Prospectus.
(b) Each Selling Shareholder, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter, 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 the breach or alleged
breach of such
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Selling Shareholder's representations and warranties in Section
1(b)(i)(B) hereof;
(ii) 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, PROVIDED, HOWEVER, that such
untrue statement of a material fact or omission or alleged omission of
a material fact relates to information with respect to such Selling
Shareholder contained in the Registration Statement, such preliminary
prospectus or the Prospectus;
(iii) 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 agency or body, commenced or
threatened, or of any claim whatsoever for which indemnification is
provided under subsection (i) and (ii) above, if (subject to Section
6(e) below) such settlement is effected with the written consent of
the Selling Shareholder; and
(iv) against any and all expense whatsoever (including, the
fees and charges of counsel chosen by Merrill Lynch), 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, for
which indemnification is provided under subsection (i) and (ii) above,
to the extent that any such expense is not paid under subsection (i),
(ii) or (iii) above;
PROVIDED that the liability of each Selling Shareholder for indemnification and
contribution under this Agreement shall be limited to an amount equal to the net
proceeds received by such Selling Shareholder from the Underwriters for the sale
of Securities; PROVIDED, FURTHER, that 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 contained in the last
paragraph on the front cover page, the last paragraph on the inside front cover
page and the second paragraph in the section of the Prospectus under the heading
"UNDERWRITING" and furnished to the Company by any Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and PROVIDED FURTHER, that this indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting
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any such losses, liabilities, claims, damages or expenses purchased Securities,
or any person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any such amendments
or supplements thereto, but excluding documents incorporated or deemed to be
incorporated by reference therein) was not sent or given by or on behalf of such
Underwriter to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Securities to such person and if the
Prospectus (as so amended or supplemented, if applicable) would have completely
corrected the defect giving rise to such loss, liability, claim, damage or
expense, except that this proviso shall not be applicable if such defect shall
have been corrected in a document which is incorporated or deemed to be
incorporated by reference in the Prospectus.
(c) Each Underwriter severally agrees to indemnify and hold harmless
the Company, the Operating Partnership, the Company's directors, each of the
officers of the Company who signed the Registration Statement, each Selling
Shareholder, each person, if any, who controls the Company, the Operating
Partnership or a Selling Shareholder 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 6, 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 or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information contained in the last paragraph on the front
cover page, the last paragraph on the inside front cover page and the second
paragraph in the section of the Prospectus under the heading "UNDERWRITING" and
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 or the Prospectus (or any amendment or supplement
thereto).
(d) 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 to the extent it is not materially prejudiced as
a result thereof and in any event shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement. In the case
of parties indemnified pursuant to Sections 6(a) and 6(b) above, counsel to the
indemnified parties shall be selected by Merrill Lynch and shall be reasonably
satisfactory to the indemnifying person(s), and, in the case of parties
indemnified pursuant to Section 6(c) above, counsel to the indemnified parties
shall be selected by the Company and the Selling Shareholders and shall be
reasonably satisfactory to Merrill Lynch. 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 indemnifying 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. No indemnifying party shall, without the
prior consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise
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or consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(e) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for the reasonable fees
and expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 6(a)(ii) and Section
6(b)(ii) effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(f) The provisions of this Section shall not affect any agreement
among the Company and the Selling Shareholders with respect to indemnification.
SECTION 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient (other than by
reason of the indemnified party not being entitled to indemnification in
accordance with the specific terms of Section 6 hereof) to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders 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
Selling Shareholders 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 Selling
Shareholders 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 Selling Shareholders 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
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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 Selling Shareholders on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Selling Shareholders 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 Selling Shareholders 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 purposes) 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 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
discount received by it exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged 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, 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 and each person, if any, who
controls a Selling Shareholder 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 Selling Shareholder. 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.
42
<PAGE>
Notwithstanding the foregoing, a Selling Shareholder shall not be
required to contribute any amount in excess of the net proceeds received by such
Selling Shareholder from the sale of Securities. The provisions of this Section
shall not affect any agreement among the Company and the Selling Shareholders
with respect to contribution.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company or the
general partner of the Operating Partnership or the Selling Shareholders
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, the Operating Partnership
or the Selling Shareholders, 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 and the Selling Shareholders, at any time at or prior to the 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 Registration Statement,
any Material Adverse Effect, 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 Common Shares has been suspended by
the Commission or if trading generally on either the New York Stock Exchange or
the American 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 Arizona authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 6 and 7
shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or
more of the Underwriters shall fail at the Closing Time or Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
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:
43
<PAGE>
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, 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 Securities to be purchased on such date, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, and,
except as otherwise provided herein, the Company or any Selling
Shareholder.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability 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 and any
Selling Shareholder shall have the right to postpone the Closing Time or a Date
of Delivery 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. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION DEFAULT BY ONE OR MORE OF THE SELLING SHAREHOLDERS OR THE
COMPANY.
(a) If a Selling Shareholder shall fail at Closing Time to sell and
deliver the number of Securities which such Selling Shareholder is obligated to
sell hereunder, then the Underwriters may, at the option of the Representatives,
by notice from the Representatives to the Company and the non-defaulting Selling
Shareholder, either (a) terminate this Agreement without any liability on the
fault of any non-defaulting party except that the provisions of Sections 1, 4, 6
and 7 shall remain in full force and effect or (b) elect to purchase the
Securities which the non-defaulting Selling Shareholder has agreed to sell
hereunder. No action taken pursuant to this Section 11 shall relieve any
Selling Shareholder so defaulting from liability, if any, in respect to such
default.
In the event of a default by any Selling Shareholder as referred to in
this Section 11, each of the Representative(s) and the Company and the non-
defaulting Selling Shareholder shall have the right to postpone Closing Time for
a period not exceeding seven days in order to effect any required change in the
Registration Statement or Prospectus or in any other documents or arrangements.
(b) If the Company shall fail at Closing Time or at the Date of
Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any non-defaulting party; provided, however, that the provisions of Sections
4, 6 and 7 shall remain in full force and effect. No action taken pursuant to
this Section shall relieve the Company from liability, if any, in respect of
such default.
44
<PAGE>
SECTION 12. 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 World
Headquarters, North Tower, World Financial Center, New York, New York 10281-
1201, attention of Equity Capital Markets; notices to either the Company or the
Operating Partnership shall be directed to it at 6991 East Camelback Road, Suite
A-200, Scottsdale, Arizona 85251, attention of Stephen O. Evans, Chairman of the
Board and Chief Executive Officer; notices to AEW shall be directed to 225
Franklin Street, Boston, Massachusetts 02110, attention of J. Grant Monahon,
Esq. and notices to Copley shall be directed to 399 Boylston Street, Boston,
Massachusetts 02116, attention of Timothy B. Fraser.
SECTION 13. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Underwriters and the Company, the Operating Partnership
and the Selling Shareholders and their respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters, the Company, the
Operating Partnership and the Selling Shareholders and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 hereof and their successors, heirs and legal representatives,
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Underwriters, the Company, the Operating Partnership and the
Selling Shareholders 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 14. GOVERNING LAW. THIS 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 THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
45
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorney-in-Fact for
the Selling Shareholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the Underwriters,
the Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
EVANS WITHYCOMBE RESIDENTIAL, INC.
By
----------------------------------------------------
Stephen O. Evans,
Chairman of the Board and Chief Executive
Officer
EVANS WITHYCOMBE RESIDENTIAL, L.P.
By: Evans Withycombe Residential, Inc.,
General Partner
By
----------------------------------------------------
Stephen O. Evans,
Chairman of the Board and
Chief Executive Officer
AEW PARTNERS, L.P.
By
----------------------------------------------------
As Attorney-in-Fact acting
on behalf of the above entity
CIIF ASSOCIATES II LIMITED PARTNERSHIP
By
----------------------------------------------------
As Attorney-in-Fact acting
on behalf of the above entity
S-1
<PAGE>
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DEAN WITTER REYNOLDS INC.
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By
------------------------------------------
Name:
Title:
For themselves and as Representatives of the other
Underwriters named in Schedule A hereto.
S-2
<PAGE>
SCHEDULE A
Number
Name of Underwriter of Securities
------------------- -------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . .
Dean Witter Reynolds Inc.. . . . . . . . . . . . . . . . . . . .
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . .
Smith Barney Inc.. . . . . . . . . . . . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500,000
-------------
-------------
Schedule A-1
<PAGE>
SCHEDULE B
Maximum Number of
Number of Initial Option Securities to Be
Securities to be Sold Sold
--------------------- -----------------------
Company 2,000,000 *
AEW 1,787,500 *
Copley 712,500 *
---------
Total....... 4,500,000 675,000
--------- --------
--------- --------
* See Section 2(b) of the attached Agreement
Schedule B-1
<PAGE>
SCHEDULE C
4,500,000 Shares
EVANS WITHYCOMBE RESIDENTIAL, INC.
(a Maryland corporation)
Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $_____.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $_____, being an amount equal to the initial
public offering price set forth above less $____ 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.
Schedule C-1
<PAGE>
SCHEDULE D
AEW Partners, L.P.
CIIF Associates II Limited Partnership
Stephen O. Evans
F. Keith Withycombe
Richard G. Berry
Paul R. Fannin
Jay E. Northrop
G. Edward O'Clair
David L. Williams
Reid W. Butler
Joseph F. Azrack
G. Peter Bidstrup
Joseph W. O'Connor
John O. Theobald II
Schedule D-1
<PAGE>
EXHIBIT A
FORM OF OPINION OF COUNSEL FOR THE RESPECTIVE SELLING
SHAREHOLDERS TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) To our knowledge, no filing with, or consent, approval,
authorization, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than the issuance
of the order of the Commission declaring the Registration Statement effective
and such authorizations, approvals or consents as may be necessary under state
securities laws, as to which we express no opinion) is necessary or required to
be obtained by the Selling Shareholder for the performance by the Selling
Shareholder of its obligations under the Purchase Agreement or in the Power of
Attorney and Custody Agreement, or in connection with the offer, sale or
delivery by the Selling Shareholder of the Securities it is selling.
(ii) The Power of Attorney and Custody Agreement has been duly
executed and delivered by the Selling Shareholder and constitutes the valid and
binding agreement of the Selling Shareholder in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting the
rights and remedies of creditors generally, and subject to general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(iii) The Purchase Agreement has been duly authorized, executed
and delivered by or on behalf of the Selling Shareholder.
(iv) The Attorney-in-Fact has been duly authorized by the Selling
Shareholder to deliver the Securities on behalf of the Selling Shareholder in
accordance with the terms of the Purchase Agreement.
(v) The execution, delivery and performance of the Purchase Agreement
and the Power of Attorney and Custody Agreement and the sale and delivery of the
Securities being sold by the Selling Shareholder and the consummation of the
transactions contemplated in the Purchase Agreement and the performance by the
Selling Shareholder of its obligations under the Purchase Agreement have been
duly authorized by all necessary action on the part of the Selling Shareholder
and do not and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or default or
Repayment Event under, or result in the creation or imposition of any tax, lien,
charge or encumbrance upon the Securities being sold by the Selling Shareholder
or any property or assets of the Selling Shareholder pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, license,
lease or other instrument or agreement known to us to which the Selling
Shareholder is a party or by which it may be bound, or to which any of the
property or assets of the Selling Shareholder may be subject nor will such
action result in any violation of the provisions of the limited partnership
agreement of the Selling Shareholder, if applicable, or, to our knowledge, any
law, administrative regulation,
<PAGE>
judgment or order of any governmental agency or body or any administrative or
court decree having jurisdiction over the Selling Shareholder or any of its
properties (except that no opinion is expressed as to federal or state
securities laws)
(vi) Upon consummation of the sale of the Securities pursuant to the
Purchase Agreement, assuming the Underwriters purchased the Securities for value
in good faith and without notice of any adverse claim, each of the Underwriters
will have acquired all rights of the Selling Shareholder in the Securities
purchased by it from such Selling Shareholder, free and clear of any adverse
claim within the meaning of the Uniform Commercial Code, and the Selling
Shareholder has the full right, power and authority (A) to enter into the
Purchase Agreement and the Power of Attorney and Custody Agreement and (B) to
sell, transfer and deliver the Securities to be sold by the Selling Shareholder
under the Purchase Agreement.
<PAGE>
EXHIBIT B
_________ __, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
DEAN WITTER REYNOLDS INC.
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
as Representatives of the several Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters - North Tower
250 Vesey Street
World Financial Center
New York, New York 10281-1209
Re: PROPOSED PUBLIC OFFERING BY EVANS WITHYCOMBE RESIDENTIAL, INC.
Dear Ladies and Gentleman:
The undersigned, a stockholder [and an officer and/or director] of
Evans Withycombe Residential, Inc., a Maryland corporation (the "Company"),
understands that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Dean Witter Reynolds Inc., Morgan Stanley & Co.
and Smith Barney Inc. propose to enter into a Purchase Agreement (the "Purchase
Agreement") with the Company and the Selling Shareholders providing for the
public offering of shares (the "Securities") of the Company's common stock, par
value $.01 per share (the "Common Stock"). In recognition of the benefit that
such an offering will confer upon the undersigned as a stockholder [and an
officer and/or director] of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the Purchase Agreement
that, during a period of 120 days from the date of the Purchase Agreement, the
undersigned will not, without the prior written consent of Merrill Lynch,
directly or indirectly, (i) offer, pledge (other than a pledge to a lending
institution as collateral or security for a bona fide loan), sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or partnership
units ("Units") of Evans Withycombe Residential, L.P. or any security
convertible into or exchangeable or exercisable for Common Stock or Units,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers in whole
<PAGE>
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock or Units, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock, Units or other
securities, in cash or otherwise.
Very truly yours,
Signature:
-------------------------
Print Name:
-----------------------------
<PAGE>
EXHIBIT (23.1)
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Pre-Effective Amendment No. 3 to Form S-3 Registration Statement and related
Prospectus of Evans Withycombe Residential, Inc. for the registration of
4,500,000 shares of its common stock and to the incorporation by reference
therein of our report dated January 19, 1996, with respect to the consolidated
financial statements and schedule of Evans Withycombe Residential, Inc. and
Evans Withycombe Residential Group included in its Annual Report (Form 10-K) for
the year ended December 31, 1995, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Phoenix, Arizona
May 17, 1996
