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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 10, 1997
EVANS WITHYCOMBE RESIDENTIAL, INC.
(Exact Name of Registrant as Specified in its Charter)
Maryland 1-13256 86-0766008
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
6991 East Camelback Road, Suite A-200 85251
Scottsdale, Arizona (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (602) 840-1040
None
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On September 8, 1995 Evans Withycombe Residential, Inc. (the "Company")
filed a registration statement (File No. 33-96756) on Form S-3 with the
Securities and Exchange Commission (the "Commission") relating to the public
offering, pursuant to Rule 415 under the Securities Act of 1933, as amended, of
up to an aggregate of $200,000,000 in securities of the Company (the
"Registration Statement"). On December 6, 1995, the Commission declared the
Registration Statement, as amended by Amendment No. 1 and Amendment No. 2,
effective. (The Registration Statement and definitive prospectus contained
therein are collectively referred to as the "Prospectus.")
The Company filed on February 11, 1997 a supplement to the Prospectus,
dated February 10, 1997, relating to the issuance and sale of up to 2,070,000
shares of the Company's common stock, $.01 par value per share (the "Common
Stock Supplement"), with the Commission. In connection with the filing of the
Common Stock Supplement with the Commission, the Company is filing certain
exhibits as part of this Form 8-K. See "Item 7. Financial Statements and
Exhibits."
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed with this report on Form 8-K:
Exhibit No. Description
----------- -----------
1.1 Purchase Agreement by and among the Company, Evans
Withycombe Residential, L.P., Merrill Lynch & Co.
and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
dated February 10, 1997, with respect to the issuance
and sale by the Company of up to 2,070,000 shares of
the Company's common stock.
5.1 Opinion of Ballard Spahr Andrews & Ingersoll regarding the
validity of the common stock.
8.1 Opinion of Gibson, Dunn & Crutcher LLP regarding certain tax
matters.
23.1 Consent of Ballard Spahr Andrews & Ingersoll (included as
part of Exhibit 5.1)
23.2 Consent of Gibson, Dunn & Crutcher LLP (included as part of
Exhibit 8.1)
23.3 Consent of Ernst & Young LLP.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EVANS WITHYCOMBE RESIDENTIAL, INC.
Date: February 11, 1997 By: /s/ Paul R. Fannin
-------------------------------------
Paul R. Fannin
Senior Vice President and Chief
Financial Officer, Treasurer and Secretary
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EVANS WITHYCOMBE RESIDENTIAL, INC.
(a Maryland corporation)
Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
February 10, 1997
MERRILL LYNCH & CO.
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") and Evans Withycombe Residential, L.P., a Delaware limited
partnership (the "Operating Partnership") each confirms its respective
agreement with Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Underwriter," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), with
respect to (i) the sale by the Company and the purchase by the Underwriter,
of 1,800,000 shares of common stock, par value $.01 per share, of the Company
("Common Shares") and (ii) the grant by the Company to the Underwriter, of
the option described in Section 2(b) hereof to purchase all or any part of
270,000 additional Common Shares to cover over-allotments, if any. The
aforesaid 1,800,000 Common Shares described in clause (i) above (the "Initial
Securities") to be purchased by the Underwriter and all or any part of the
270,000 Common Shares subject to the option described in Section 2(b) hereof
(the "Option Securities") are collectively hereinafter called the
"Securities."
The Company and the Operating Partnership understand that the
Underwriter proposes to make a public offering of the Securities as soon as it
deems advisable after this Agreement has been executed and delivered.
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A registration statement on Form S-3 (No. 33-96756) and amendments No.
1 and 2 thereto dated November 17, 1995 and December 6, 1995, respectively, with
respect to the Common Shares has (i) been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Securities
Act" or the "1933 Act"), and the rules and regulations (the "Rules and
Regulations" or the "1933 Act Regulations") of the Securities and Exchange
Commission (the "Commission") promulgated thereunder for the offering from time
to time of the Common Shares and certain of the Company's debt and other equity
securities in accordance with Rule 415 of the Rules and Regulations (the "Shelf
Securities"), (ii) been filed with the Commission under the Securities Act and
(iii) become effective under the Securities Act. Copies of such registration
statement and Amendments No. 1 and 2 thereto have been delivered by the Company
to the Underwriter. Such registration statement, as amended through the date of
this Agreement, is, on the one hand, and the prospectus constituting a part
thereof and each prospectus supplement relating to the offering of Common Shares
to the Underwriter for use (whether or not such prospectus supplement is
required to be filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations) (the "Prospectus Supplement"), on the other hand, including all
documents incorporated therein by reference, as from time to time amended or
supplemented pursuant to the Securities Act, the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act" or the "1934 Act"), or otherwise, are referred
to herein as the "Registration Statement" and the "Prospectus," respectively;
PROVIDED, HOWEVER, that the Prospectus Supplement shall be deemed to have
supplemented the Prospectus only with respect to the offering of Shelf
Securities to which it relates; and PROVIDED FURTHER, that if any revised
prospectus shall be provided to the Underwriter by the Company for use in
connection with the offering of the Securities which differs from the prospectus
on file (whether or not such revised prospectus is required to be filed by the
company pursuant to Rule 424(b) of the 1933 Act Regulations), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Underwriter for such use. 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.
For purposes of this Agreement, all references to the Registration Statement,
the Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("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 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 or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
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 or the Prospectus, as the case may be.
If the Company elects to rely on Rule 434 under the 1933 Act Regulations, all
references to the Prospectus shall be
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deemed to include, without limitation, the
form of prospectus and the term sheet (the "Term Sheet"), taken together,
provided to the Underwriter by the Company in reliance on Rule 434 under the
1933 Act (the "Rule 434 Prospectus").
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 the 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 the 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 (taking into account any
applicable prospectus supplement) 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 Supplement, the last paragraph on the
inside cover page of the Prospectus Supplement and the third paragraph
under the heading "Underwriting" in the Prospectus Supplement and
furnished to the Company in writing by the Underwriter expressly for
use in the Prospectus Supplement. 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, the Prospectus delivered to the Underwriter 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").
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(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 and the Prospectus, 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, 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
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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 (as defined in the Prospectus), or any site
owned by the Company and intended for development as so defined in the
Prospectus (the "Development Sites"), 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 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
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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 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
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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").
(xi) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus
Supplement 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 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
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state securities laws. None of the outstanding Common Shares 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 Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, which is included in the
Prospectus by reference. 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
from the Company have been duly authorized for issuance and sale to
the Underwriter 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 the Underwriter 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.
(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,
24,846,612 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 20,239,134 Units representing 81.5% of the outstanding
Units in the Operating Partnership, including the Company's 1% general
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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 Underwriter, 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 and the use of proceeds from the sale of the Securities
as described in the Prospectus Supplement 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 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
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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 and the Prospectus 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 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
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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.
(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.
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(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, the Managed Properties
or the Development Sites 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, the Managed Properties or the Development Sites.
(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.
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(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 and
the Development Sites (the "Environmental Reports") have been
disclosed or made available to the Underwriter or its counsel.
(F) Except as set forth in the Environmental Reports, no
Community, Managed Property or Development Site (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, Managed Property or Development Site.
(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
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
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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, the Managed Properties or the
Development Sites; or
(iv) the presence of which on any of the Communities,
the Managed Properties or the Development Sites 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, the Managed Properties or the Development Sites; or
(v) the presence of which on adjacent properties
constitutes a trespass by any owner or operator of the
Communities, the Managed Properties, the Development Sites or any
Other Property; or
(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
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(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 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
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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 Underwriter; (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 Site 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) REGULATION M. 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 Regulation M 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. There are no persons with
registration or other similar rights to have any securities registered
pursuant to the Registration Statement other than AEW Partners, L.P. a
Delaware limited partnership, CIIF Associates II Limited Partnership,
a Delaware limited partnership, Stephen O. Evans and F. Keith
Withycombe, who have waived such rights, and 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 latter case, 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 commissions (other than those payable to the Underwriter)
in connection with the execution and delivery of this Agreement, the
offer and sale of the Securities or the transactions contemplated
hereby.
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(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.
(xxxiii) INVESTMENT GRADE RATING. The Company has received an
investment grade rating of BBB- from Standard & Poor's Corporation and
Baa3 from Moody's Investors Service, Inc. with respect to prospective
issuances of senior debt.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITER; 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 agrees to sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, at the price per share set forth in Schedule A,
the Initial 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 Company hereby grants an option to the
Underwriter to purchase up to an additional 270,000 Common Shares at the price
per share set forth in Schedule A. 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 Underwriter to the Company setting forth the number of Option
Securities as to which the Underwriter is 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
Underwriter, 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.
(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 LLP, 333 South Grand Avenue, Los Angeles, California 90071; or
at such other place as shall be agreed upon by the Underwriter and the Company,
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, or such other time not later than seven business days after such date as
shall be agreed upon by the Underwriter and the Company (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 Underwriter, 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 LLP, or at such other place as shall be
agreed upon by the Underwriter and the Company, on each Date of Delivery as
specified in the notice from the Underwriter to the Company.
Payment shall be made to the Company, by wire transfer of immediately
available funds or similar same day funds payable to the order of the Company
against delivery to the Underwriter of certificates for the Securities to be
purchased by it. Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names
as the Underwriter 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. The
certificates for the Initial Securities and the Option Securities, if any, will
be made available for examination and packaging by the Underwriter 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 notify the Underwriter 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 the 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 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 Underwriter
with copies of the form of Rule 434 Prospectus, in such number as the
Underwriter 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 Underwriter
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
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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 Underwriter 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
Underwriter or counsel for the Underwriter 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
the Underwriter and counsel for the Underwriter, 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 the Underwriter, without charge, conformed copies of the Registration
Statement as originally filed and of each amendment thereto (excluding
exhibits). If the Company was subject to EDGAR at the time of filing, the
copies of the Registration Statement and each amendment thereto furnished to the
Underwriter was 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 the
Underwriter, without charge, as many copies of the Prospectus as the 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 the
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 the Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriter 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.
(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 Underwriter
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
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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 Underwriter such number
of copies of such amendment or supplement as the Underwriter may reasonably
request.
(g) BLUE SKY QUALIFICATIONS. The Company will use its best efforts,
in cooperation with the Underwriter, 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 Underwriter 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 60 days
from the date hereof, the Company and the Operating Partnership will not,
without the prior written consent of the Underwriter, (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 or director stock 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
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(C) above agree in writing to lock-up provisions substantially identical to
those contained in the Lock-Up Agreement attached hereto as Exhibit A) 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 Underwriter 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 Underwriter 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 Underwriter in writing
immediately if (i) any event occurs that renders any of the representations and
warranties of 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 Underwriter,
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including any stock or other transfer taxes or duties payable upon the sale
of the Securities to the Underwriter, (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 Underwriter 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 Underwriter
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 Underwriter
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 Underwriter in connection with the NASD's review
of the terms of the proposed public offering of the Securities, if applicable
(viii) the fees and expenses incurred in connection with the listing of the
Common Shares on the New York Stock Exchange and (ix) the fees and expenses
of any transfer agent or registrar for the Securities.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriter for all of its out-of-pocket
expenses, including the reasonable fees and other charges of counsel for the
Underwriter.
SECTION 5. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The
obligations of the Underwriter hereunder are subject to the accuracy of the
representations and warranties of the Company and the Operating Partnership
contained in Section 1 hereof or in certificates of any officer of the Company
or any Subsidiary or any partner of the Operating Partnership delivered pursuant
to the provisions hereof, to the performance by the Company and the Operating
Partnership 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 Underwriter. The
Prospectus 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
Underwriter 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
Underwriter shall have received:
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(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 Underwriter, 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 Supplement under
the heading "CAPITALIZATION" (except for subsequent issuances, if
any, pursuant to this Agreement or 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). 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 18,439,134 of the 23,046,612 issued
and outstanding Units and immediately following the Closing Time
will be the holder of 20,239,134 of the issued and outstanding
Units.
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(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 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.
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(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 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 and the Term Sheet, 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
25
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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 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.
(S) To the best knowledge of such counsel, there are no
persons with registration or other similar rights to have any
securities of the Company registered pursuant to the Registration
Statement other than AEW Partners, L.P. a Delaware limited
partnership, CIIF
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Associates II Limited Partnership, a Delaware limited
partnership, Stephen O. Evans and F. Keith Withycombe, who, to
such counsel's knowledge, have waived such rights.
(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 Underwriter,
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 have
been duly authorized and validly issued and are fully paid and
nonassessable and none of the outstanding shares of 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.
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(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 Underwriter from
the Company have been duly authorized for issuance and sale to
the Underwriter pursuant to this Agreement, and, when issued and
delivered by the Company pursuant to this Agreement against
payment of the consideration, (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
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.
(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
Latham & Watkins, counsel for the Underwriter, with respect to such
matters as the Underwriter may reasonably request.
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(iv) In giving their opinions required by subsections (b)(i) and
(b)(iii), 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 Underwriter by the Company for use in connection with
the offering of Securities which differs from the Prospectus on 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 Underwriter. Each such opinion
required by subsections (b)(i) and (b)(iii) 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) 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
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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 Underwriter 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 (c), and stating that each of 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.
(d) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of
this Agreement, the Underwriter shall have received from Ernst & Young LLP a
letter dated such date, in form and substance reasonably satisfactory to the
Underwriter, 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.
(e) BRING-DOWN COMFORT LETTER. At the Closing Time, the Underwriter
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 (d) 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.
(f) 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.
(g) NO OBJECTION. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(h) LOCK-UP AGREEMENT. On or before the date of this Agreement, the
Underwriter shall have received a lock-up agreement, substantially in the form
of Exhibit A hereto, signed by each of the persons listed on Schedule B hereto.
(i) ADDITIONAL DOCUMENTS. At the Closing Time and at each Date of
Delivery, if any, counsel for the Underwriter 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 Company in
connection with the issuance and sale of the Securities as herein contemplated
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shall be reasonably satisfactory in form and substance to the Underwriter and
counsel for the Underwriter.
(j) CONDITIONS TO PURCHASE OF OPTION SECURITIES. In the event that
the Underwriter exercises its 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 Underwriter 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(c) hereof remains true and correct as of such Date of
Delivery.
(ii) 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 Underwriter, 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)(iv) hereof.
(iii) 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 Underwriter, 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.
(iv) OPINION OF COUNSEL FOR UNDERWRITER. The favorable opinion
of Latham & Watkins, counsel for the Underwriter, 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)(iii) and 5(b)(iv) hereof.
(v) BRING-DOWN COMFORT LETTER. A letter from Ernst & Young LLP
in form and substance satisfactory to the Underwriter and dated such
Date of Delivery, substantially the same in form and substance as the
letter furnished to the Underwriter pursuant to Section 5(d) 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
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purchase of Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the Underwriter to purchase the relevant
Option Securities, may be terminated by the Underwriter by notice to the
Company 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.
(a) Each of the Company and the Operating Partnership agrees, jointly
and severally, to indemnify and hold harmless the Underwriter and each person,
if any, who controls the Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental 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(d)
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 the Underwriter), 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
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inside front cover page and the third paragraph in the section of the
Prospectus Supplement under the heading "UNDERWRITING" and furnished to the
Company by the Underwriter 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 the Underwriter from whom the person asserting any
such losses, liabilities, claims, damages or expenses purchased Securities,
or any person controlling the 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 the 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) the Underwriter 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, and each person,
if any, who controls the Company or the Operating Partnership 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 third paragraph in the section of the Prospectus Supplement under
the heading "UNDERWRITING" and furnished to the Company by the Underwriter
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have 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 Section 6(a) above, counsel to the
indemnified parties shall be selected by the Underwriter and shall be reasonably
satisfactory to the indemnifying person(s), and, in the case of parties
indemnified pursuant to Section 6(b) above, counsel to the indemnified parties
shall be selected by the Company and shall be reasonably satisfactory to the
Underwriter. 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.
33
<PAGE>
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 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.
(d) 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) 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.
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 on the one
hand and the Underwriter 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 on the one hand and of the Underwriter 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 on the one hand and the
Underwriter 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 but including any expenses
reimbursed by the Underwriter) received by the
34
<PAGE>
Company and the total underwriting discount received by the Underwriter, bear
to the aggregate initial public offering price of the Securities.
The relative fault of the Company on the one hand and the Underwriter
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 or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation 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, the 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 it 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 the
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 the 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.
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 submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of the Underwriter or controlling person, or by or on
behalf of the Company, the Operating Partnership, and shall survive delivery of
the Securities to the Underwriter.
35
<PAGE>
SECTION 9. TERMINATION OF AGREEMENT.
(a) the Underwriter may terminate this Agreement, by notice to the
Company, 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 Underwriter, 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 THE UNDERWRITER. If the Underwriter shall
fail at the Closing Time or Date of Delivery to purchase the Securities which it
is obligated to purchase under this Agreement (the "Defaulted Securities"), the
Underwriter shall have the right, within 24 hours thereafter, to make
arrangements for 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.
No action taken pursuant to this Section 10 shall relieve the
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 Underwriter or the Company 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 the
Underwriter under this Section 10.
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.
36
<PAGE>
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to Merrill Lynch World Headquarters, North Tower,
World Financial Center, New York, New York 10281-1201, attention of Equity
Capital Markets and 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.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Underwriter and the Company, the Operating Partnership
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 Underwriter, the Company and the Operating
Partnership 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 Underwriter, the
Company and the Operating Partnership and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Securities from the Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. 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 14. EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
37
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriter and the Company in accordance with its terms.
Very truly yours,
EVANS WITHYCOMBE RESIDENTIAL, INC.
By /s/ STEPHEN O. EVANS
-------------------------------------
Stephen O. Evans,
Chairman of the Board and Chief Executive
Officer
EVANS WITHYCOMBE RESIDENTIAL, L.P.
By: Evans Withycombe Residential, Inc.,
General Partner
By /s/ STEPHEN O. EVANS
-------------------------------------
Stephen O. Evans,
Chairman of the Board and
Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By /s/ PAUL M. MEURER
-------------------------------
Name: Paul M. Meurer
Title: Vice President
S-1
<PAGE>
SCHEDULE A
1,800,000 Shares
EVANS WITHYCOMBE RESIDENTIAL, INC.
(a Maryland corporation)
Common Stock
(Par Value $.01 Per Share)
1. The purchase price per share for the Securities to be paid to the
Company by the Underwriter shall be $19.90; 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 A-1
<PAGE>
SCHEDULE B
Stephen O. Evans
F. Keith Withycombe
Richard G. Berry
Paul R. Fannin
Jay E. Northrop
G. Edward O'Clair
David L. Williams
Joseph F. Azrack
G. Peter Bidstrup
Joseph W. O'Connor
John O. Theobald II
Schedule B-1
<PAGE>
EXHIBIT A
_________ __, 1997
MERRILL LYNCH & CO.
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"), propose to enter into a Purchase Agreement (the
"Purchase Agreement") with the Company 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 60 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>
EXHIBIT A
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>
[LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL]
February 12, 1997
Evans Withycombe Residential, Inc.
6991 East Camelback Road
Suite A200
Scottsdale, Arizona 85251
Re: Evans Withycombe Residential, Inc., a Maryland corporation (the
"Corporation") - Issuance and Sale of up to 2,070,000 shares (the
"Shares") of Common Stock of the Corporation, par value One Cent
($.01) per Share (the "Common Stock")
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with the registration of the Shares under the Securities Act
of 1933, as amended (the "Act"), by the Corporation on Form S-3 (Registration
No. 33-96756) filed with the Securities and Exchange Commission (the
"Commission"), as amended (the "Registration Statement"), you have requested our
opinion with respect to the matters set forth below.
We have acted as special Maryland corporate counsel for the Corporation in
connection with the matters described herein. In our capacity as special
Maryland corporate counsel to the Corporation, we have reviewed and are familiar
with the proceedings taken by the Corporation in connection with the
authorization of the Shares. In addition, we have relied upon certificates and
advice from the officers of the Corporation upon which we believe we are
justified in relying and on various certificates from, and documents recorded
with, the State Department of Assessments and Taxation of Maryland (the "SDAT"),
including the charter of the Corporation (the "Charter"), consisting of Articles
of Incorporation of the Corporation filed with the SDAT on May 24, 1994 and
Articles of Amendment filed with the SDAT on August 11, 1994. We have also
examined Bylaws of the Corporation adopted as of May 25, 1994 and amended and
restated on August 4, 1994 and resolutions of the Board of Directors of the
Corporation adopted on or before the date hereof and are in full force and
effect on the date hereof; and such
<PAGE>
Evans Withycombe Residential, Inc.
February 12, 1997
Page 2
laws, records, documents, certificates, opinions and instruments as we deem
necessary to render this opinion.
We have assumed the genuineness of all signatures, and the authenticity of
all documents submitted to us as originals and the conformity of the originals
of all documents submitted to us as certified, photostatic or conformed copies.
In addition, we have assumed that each person executing any instrument, document
or certificate referred to herein on behalf of any party is duly authorized to
do so. We have also assumed that all certificates submitted to us are true and
correct and that the shares will not be issued in violation of provisions of
Article V, Section 2 of the Charter of the Company entitled "REIT-Related
Restrictions and Limitations on the Equity Shares".
Based on the foregoing and subject to the assumptions and qualifications
set forth herein, it is our opinion that, as of the date of this letter, the
Shares have been duly authorized by all necessary corporate action on the part
of the Corporation, and the Shares will, upon issuance and delivery in
accordance with the terms and conditions described in the Registration Statement
against payment of the purchase price therefore as determined by the Board of
Directors of the Corporation or a committee thereof, be validly issued, fully
paid and nonassessable.
We consent to your filing this opinion as an exhibit to the Registration
Statement, and further consent to the filing of this opinion as an exhibit to
the applications to securities commissioners for the various states of the
United States for registration of the Shares. We also consent to the
identification of our firm as Maryland counsel to the Corporation in the section
of the Prospectus (which is part of the Registration Statement) entitled "Legal
Matters".
The opinions set forth herein are limited to the current laws of the State
of Maryland and we express no opinion with respect to any laws other than the
laws of the State of Maryland. Furthermore, the opinions presented in this
letter are limited to the matters specifically set forth herein an no other
opinion shall be inferred beyond the matters expressly stated.
<PAGE>
Evans Withycombe Residential, Inc.
February 12, 1997
Page 3
The opinions expressed in this letter are solely for your use and may not
be relied upon by any other person without our prior written consent.
Very truly yours,
/s/ BALLARD SPAHR ANDREWS & INGERSOLL
<PAGE>
February 11, 1997
(213) 229-7000 C 26181-00025
Evans Withycombe Residential, Inc.
6991 East Camelback Road
Suite A200
Scottsdale, Arizona 85251
Re: EVANS WITHYCOMBE RESIDENTIAL, INC.
Gentlemen:
We have acted as special counsel to Evans Withycombe Residential, Inc., a
Maryland corporation (the "Company"), in connection with the sale by the Company
of shares of common stock, par value $.01 per share, of the Company (the "Common
Shares") pursuant to a Registration Statement on Form S-3 (the "Registration
Statement") filed with the Securities and Exchange Commission on September 8,
1995 (Registration No. 33-96756), and amended on November 17, 1995 and December
6, 1995.
You have requested our opinion concerning certain of the federal income tax
consequences to the Company and the purchasers of Common Shares on connection
with the sale described above. This opinion is based on various assumptions,
and is conditioned upon certain representations made by the Company as to
factual matters. In addition, this opinion is based upon the factual
representations of the Company concerning its business and properties as set
forth in the Registration Statement.
We have made much legal and factual examinations and inquiries, including
an examination of originals or copies certified or otherwise identified to our
satisfaction of such documents, of corporate records and other instruments as we
have deemed necessary or appropriate for purposes of this opinion.
<PAGE>
Evans Withycombe Residential, Inc.
February 11, 1997
Page 2
We are opining herein as to the effect on the subject transaction only of
the federal income tax laws of the United States and we express no opinion with
respect to the applicability thereto, or the effect thereon, of other federal
laws, the laws of any other jurisdiction or as to any matters of municipal law
or the laws of any other local agencies with any state.
Based on such facts, assumptions and representations, it is our opinion
that:
(1) Commencing with the Company's taxable year ending December 31, 1994,
the Company was organized in conformity with the requirements for qualification
as a real estate investment trust, and its proposed method of operation has
enabled and will enable it to meet the requirements for qualification and
taxation as a real estate investment trust under the Internal Revenue Code of
1986, as amended (the "Code").
(2) The information in the Registration Statement under the caption
"Federal Income Tax Considerations," to the extent that it constitutes matters
of law, summaries of legal matters, or legal conclusions, has been reviewed by
us and is accurate in all material respects.
This opinion is based on various statutory provisions, regulations
promulgated thereunder and interpretations thereof by the Internal Revenue
Service and the courts having jurisdiction over such matters, all of which are
subject to change either prospectively or retroactively. Also, any variation or
difference in the facts from those set forth in the Company's representations
may affect the conclusions stated herein. Moreover, the Company's qualification
and taxations as a real estate investment trust depends upon the Company's
ability to meet, through annual operating results, distribution levels and
diversity of stock ownership, the various qualification tests imposed under the
Code, the results of which will not be reviewed by Gibson, Dunn & Crutcher LLP.
Accordingly, no assurance can be given that the actual results of the Company's
operation for any one taxable year will satisfy such requirements.
We hereby consent to the use of our name and our opinion under the heading
"Federal Income Tax Considerations" and "Legal Matters" in the Prospectus that
forms a part of the Registration Statement.
Very truly yours,
/s/ Gibson, Dunn & Crutcher LLP
-------------------------------
GIBSON, DUNN & CRUTCHER LLP
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 33-96756) and related Prospectus and
Prospectus Supplement of Evans Withycombe Residential, Inc. for the issuance of
up to 2,070,000 shares of its common stock and to the incorporation by reference
therein of our report dated January 31, 1997, with respect to the consolidated
financial statements and schedule of Evans Withycombe, Residential, Inc.
included in its Annual Report (Form 10-K) for the year ended December 31, 1996,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
February 7, 1997
