Issuer of Notes	Essex Portfolio, L.P.
Guarantor of Notes	Essex Property Trust, Inc., our general partner.
Issuer of Common Shares Upon Exchange of Notes	Essex Property Trust, Inc., our general partner
Notes Offered	$225.0 million aggregate principal amount of 3.625% Exchangeable Senior Notes due 2025.
Maturity Date	November 1, 2025, unless earlier repurchased, redeemed, or exchanged in accordance with their terms prior to such date.
Interest	The notes bear interest at an annual rate of 3.625%. Interest is payable semi-annually in arrears on May 1 and November 1 of each year beginning May 1, 2006.
Ranking	The notes are our senior unsecured obligations and rank equal in right of payment with all of our existing and future indebtedness that is not contractually subordinated to the notes and senior to all of our subordinated indebtedness. The notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the collateral securing such indebtedness, and to all liabilities and preferred equity of our subsidiaries.   As of September 30, 2005, we had $1.31 billion of senior indebtedness, $1.26 billion of which was secured, and our entities which we account for under the equity method of accounting had $190.6 million of liabilities, and $24.4 million of preferred equity.
Parent Guarantee	The notes are fully and unconditionally guaranteed by Essex Property Trust, Inc., our general partner. However, Essex Property Trust has no material assets other than its investment in us.
Exchange Rights	Holders may exchange their notes based on the applicable exchange rate (described below) (i) prior to the close of business on the second business day prior to the stated maturity date at any time on or after November 1, 2020 and (ii) prior to November 1, 2020 only under the following circumstances:   ·  during any calendar quarter (and only during such calendar quarter) commencing after December 31, 2005, if, and only if, the closing sale price of Essex common shares for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is greater than 125% of the exchange price per Essex common share in effect on the applicable trading day;

	·  during the five consecutive trading-day period following any 20 consecutive trading-day period in which the average trading price of the notes was less than 98% of the product of the closing sale price of Essex common shares during such five trading-day period multiplied by the applicable exchange rate;   ·  if we have called the notes for redemption, until the close of business on the second trading day immediately preceding the redemption date;   ·  during prescribed periods upon the occurrence of specified corporate transactions as described under “Description of Notes — Exchange Rights — Exchange Upon Specified Corporate Transactions” in this prospectus;   ·  during prescribed periods upon the occurrence of a fundamental change; or   ·  if Essex common shares cease to be listed on a U.S. national or regional securities exchange or quoted on the Nasdaq National Market for a 30 consecutive trading day period.   By delivering to the holder cash and shares of Essex common shares, if any, we will satisfy our obligations with respect to the notes exchanged. Accordingly, upon exchange of a note, accrued and unpaid interest will be deemed paid in full rather than cancelled, extinguished or forfeited.
Exchange Rate	The initial exchange rate for each $1,000 principal amount of notes is 9.6852 Essex common shares, payable in cash and Essex common shares, if any, as described below under “Description of Notes— Exchange Settlement.” This is equivalent to an initial exchange price of $103.25 per Essex common share. In addition, if certain fundamental change transactions occur prior to November 4, 2010 and a holder elects to exchange notes in connection with any such transaction, we will increase the exchange rate in connection with such transaction by a number of additional Essex common shares, based on the date such transaction becomes effective and the price paid per Essex common share in such transaction as described under “Description of Notes — Exchange Rate Adjustments — Exchange Rate Adjustment Upon Certain Fundamental Changes” in this prospectus, unless such transaction constitutes a public acquirer change of control and we elect to modify the exchange right for a right to exchange the notes for cash and shares of public acquirer common stock, if any. The exchange rate may also be adjusted under other circumstances as described below under “Description of Notes — Exchange Rate Adjustments.”
Exchange Rate Adjustments	As described under “Description of Notes — Exchange Rate Adjustments,” the exchange rate may be adjusted upon the occurrence of certain events, including the payment of quarterly cash dividends in excess of $0.84 per share on the Essex common shares, but will not be adjusted for accrued and unpaid interest. The exchange rate will not be adjusted to the extent that such adjustments would reduce the exchange price below $10.00.
Exchange Settlement	Subject to certain exceptions described under “Description of Notes” in this prospectus, for each $1,000 principal amount of notes exchanged, a holder will be entitled to receive cash and, if applicable, Essex common shares, the aggregate value of which (the “exchange value”) will be determined by multiplying the applicable exchange rate by the average of the daily volume weighted average price per share of Essex common shares for each of the 20 consecutive trading days beginning on the second trading day immediately following the day the notes are tendered for exchange.

	Except as described in this prospectus, we will deliver the exchange value of the notes surrendered for exchange to exchanging holders as follows: (1) a cash amount (the “principal return”) equal to the lesser of (a) the aggregate exchange value of the notes to be exchanged and (b) the aggregate principal amount of the notes to be exchanged; (2) if the aggregate exchange value of the notes to be exchanged is greater than the principal return, an amount payable in cash or, at our election, in whole Essex common shares, determined as set forth in this prospectus, or a combination thereof, equal to the aggregate exchange value less the principal return (the “net amount”); and (3) a cash amount in lieu of any fractional Essex common shares. Exchange settlement will occur no later than the third business day following the determination of the average price.
Optional Redemption	Prior to November 4, 2010, we may not redeem the notes except to preserve the status of Essex as a REIT. However, on or after November 4, 2010, we may redeem the notes in whole or in part, upon not less than 30 nor more than 60 days’ prior written notice to holders of the notes, for cash equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid interest (including additional interest, if any) to, but not including, the redemption date.
Repurchase at Option of Holders on Certain Dates	Holders of notes may require us to repurchase all or a portion of their notes for cash on November 1, 2010, 2015 and 2020 at a repurchase price equal to 100% of the principal amount of the notes to be repurchased plus any accrued and unpaid interest (including additional interest, if any) to, but not including, the repurchase date.
Repurchase at Option of Holders Upon a Fundamental Change	Upon the occurrence of a fundamental change, as defined in this prospectus, holders may require us to repurchase all or a portion of their notes for cash at a repurchase price equal to 100% of the principal amount of the notes to be repurchased plus any accrued and unpaid interest (including additional interest, if any) to, but not including, the repurchase date.
Ownership Limit	In order to maintain Essex’s qualification as a REIT under the Internal Revenue Code, ownership by any person of more than 6.0% of Essex’s outstanding common shares is, subject to certain exceptions, restricted. Shares owned in excess of such limits shall be deemed “excess stock” pursuant to Essex’s charter, in which case the holder will lose certain ownership rights with respect to such shares. See “Description of Notes — Ownership Limit” and “Description of Capital Stock.”
Registration Rights	We and Essex have agreed to file, at our expense, with the SEC within 90 calendar days after the original issuance of the notes, and to use our and Essex’s reasonable best efforts to cause to become effective within 180 calendar days after the original issuance of the notes, a shelf registration statement with respect to the resale of the notes and the Essex common shares issuable upon exchange of the notes. See “Description of Notes — Registration Rights; Additional Interest.”   We and Essex have also agreed to use our and their reasonable best efforts to keep the shelf registration statement effective until the earliest of the following:

	·  the date when all registrable securities have been effectively registered under the Securities Act and disposed of in accordance with the shelf registration statement; or   ·  the date when all registrable securities may be resold without restriction pursuant to Rule 144(k) under the Securities Act.   To sell your notes or any Essex common shares issued upon exchange of the notes pursuant to the shelf registration statement, you must, among other things, be named as a selling securityholder in the prospectus. To be so named, you must complete and deliver a notice and questionnaire, which is available upon request from us.   If we and Essex fail to comply with specified obligations under the registration rights agreement, additional interest will be payable on the notes. See “Description of Notes — Registration Rights; Additional Interest.”   This prospectus is part of the shelf registration statement filed pursuant to the terms of the registration rights agreement.
The PORTALSM Market	The notes are designated for trading in The PORTALSM Market. The notes sold using this prospectus, however, will no longer be eligible for trading on The PORTALSM Market. We do not intend to apply for listing of the notes on any securities exchange or for the inclusion of the notes in any automated quotation system.
New York Stock Exchange Symbol for Common Stock	Essex common shares are listed on the New York Stock Exchange under the symbol “ESS.”
Use of Proceeds	We will not receive any cash proceeds from the sale of the notes or Essex common shares issuable upon exchange of the notes offered under this prospectus.
Book-Entry Form	The notes are issued in book-entry only form and are represented by a permanent global certificate deposited with a custodian for, and registered in the name of a nominee of The Depository Trust Company, commonly known as DTC, in New York, New York. Beneficial interest in the global certificate representing the notes will be shown on, and transfer will be effected only through, records maintained by DTC and its direct and indirect participants and such interests may not be exchanged for certificated notes, except in limited circumstances described in “Description of Notes — Book-Entry System.”
Material U.S. Federal Income Tax Considerations	The notes and the Essex common shares issuable upon exchange of the notes are subject to special and complex United States federal income tax rules. Holders are urged to consult their own tax advisors with respect to the federal, state, local and foreign tax consequences of purchasing, owning and disposing of the notes and Essex common shares issuable upon exchange of the notes. See “Material U.S. Federal Income Tax Considerations.”

 

Risk Factors

You should read carefully the “Risk Factors” section of this prospectus beginning on page 11 of this prospectus to ensure that you understand the risks associated with an investment in the notes and the Essex common shares that may be issued upon exchange of the notes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	actual or anticipated changes in operating results or business prospects;

 

·	changes in financial estimates by securities analysts;

 

·	an inability to meet or exceed securities analysts’ estimates or expectations;

 

·	conditions or trends in our industry or sector;

 

·	the performance of other multifamily residential REITs and related market valuations;

 

·	announcements by Essex or its competitors of significant acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives;

 

·	hedging or arbitrage trading activity in Essex common shares;

 

·	changes in interest rates;

 

·	capital commitments;

 

·	additions or departures of key personnel; and

 

·	future sales of Essex common shares or securities convertible into, or exchangeable or exercisable for, Essex common shares.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	result in holders receiving no shares upon exchange or fewer shares relative to the exchange value of the notes;

 

·	reduce our liquidity because we will be required to pay the principal return in cash and may, at our option, pay the net amount in cash as well;

 

·	delay holders’ receipt of the proceeds upon exchange; and

 

·	subject holders to market risk before receiving any shares upon exchange.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	cash flow may not be sufficient to meet required payments of principal and interest;

 

·	inability to refinance existing indebtedness, including on encumbered properties;

 

·	the terms of any refinancing may not be as favorable as the terms of existing indebtedness;

 

·	inability to comply with debt covenants which could cause an acceleration of the maturity date; and

 

·	repaying debt before the scheduled maturity date could result in prepayment penalties.

 

 

 

·	October 1 to December 31, 2005 — $6.5 million;

 

·	2006 — $26.2 million;

 

·	2007 — $182.4 million (includes lines of credit balance of $56 million as of September 30, 2005);

 

·	2008 — $156.1 million;

 

·	2009 — $147.7 million (includes lines of credit balance of $93.7 million as of September 30, 2005);

 

·	2010 and thereafter — $795.3 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	funds may be expended and management’s time devoted to projects that may not be completed;

 

·	construction costs of a project may exceed original estimates, possibly making the project economically unfeasible;

 

·	development projects may be delayed due to, without limitation, adverse weather conditions, labor shortages, or unforeseen complications;

 

·	occupancy rates and rents at a completed project may be less than anticipated; and

 

·	operating costs at a completed development may be higher than anticipated.

 

 

 

 

 

 

 

 

 

 

 

 

 

·	Essex would not be able to pay its indebtedness as it becomes due in the usual course of business; or

 

·	Essex total assets would be less than its total liabilities.

 

 

 

 

 

 

 

 

 

 

·	authorize or create any class or series of stock that ranks senior to such preferred stock with respect to the payment of dividends, rights upon liquidation, dissolution or winding-up of Essex’s business;

 

·	amend, alter or repeal the provisions of Essex’s charter or bylaws, that would materially and adversely affect the rights of such preferred stock; or

 

·

in the case of the preferred stock into which our preferred units are exchangeable, merge or consolidate with another entity or transfer substantially all of its assets to another entity, except if such preferred stock remains outstanding with the surviving entity and has the same terms and in certain other circumstances.

 

 

 

 

·	Essex completes a ‘‘going private’’ transaction and its common shares are no longer registered under the Securities Exchange Act of 1934, as amended:

 

·	Essex completes a consolidation or merger or sale of substantially all of its assets and the surviving entity’s debt securities do not possess an investment grade rating; or

 

·	Essex fails to qualify as a REIT.

 

 

 

 

 

·	80% of the votes entitled to be cast by holders of outstanding voting shares; and

 

·	66% of the votes entitled to be cast by holders of outstanding voting shares other than shares held by the interested stockholder with whom the business combination is to be effected.

 

 

 

 

 

 

 

 

 

 

 

·	the general economic climate;

 

·	local economic conditions in which the properties are located, such as oversupply of housing or a reduction in demand for rental housing;

 

·	the attractiveness of the properties to tenants;

 

·	competition from other available space;

 

·	Essex’s ability to provide for adequate maintenance and insurance; and

 

·	increased operating expenses.

 

 

 

 

 

 

 

 

 

·	that the value of mortgaged property may be less than the amounts owed, causing realized or unrealized losses;

 

·	the borrower may not pay indebtedness under the mortgage when due, requiring Essex to foreclose, and the amount recovered in connection with the foreclosure may be less than the amount owed;

 

·	that interest rates payable on the mortgages may be lower than our cost of funds; and

 

·	in the case of junior mortgages, that foreclosure of a senior mortgage would eliminate the junior mortgage.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		Nine Months Ended September 30,					Year Ended December 31,
			2005				2004		2003		2002		2001		2000
Ratio of earnings to fixed charges (excluding preferred return and preferred unit dividends)		1.98x					2.44	x	1.94	x	2.17	x	2.49	x	2.80	x

 

 

 

 

 

 

 

Quarter Ended		High			Low
March 31, 2006 (through March 1, 2006)		$	101.64		$	92.10
December 31, 2005		$	93.44		$	80.35
September 30, 2005		$	93.14		$	82.86
June 30, 2005		$	86.13		$	68.50
March 31, 2005		$	84.32		$	68.56
December 31, 2004		$	85.43		$	71.65
September 30, 2004		$	75.31		$	64.89
June 30, 2004		$	69.73		$	58.15
March 31, 2004		$	66.64		$	60.65
December 31, 2003		$	66.60		$	59.88
September 30, 2003		$	64.98		$	56.67
June 30, 2003		$	59.40		$	52.20
March 31, 2003		$	54.91		$	49.00

 

 

 

Quarter      Ended	2003	2004	2005
3/31	$0.7800	$0.7900	$0.8100
6/30	$0.7800	$0.7900	$0.8100
9/30	$0.7800	$0.7900	$0.8100
12/31	$0.7800	$0.7900	$0.8100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

during any calendar quarter beginning after December 31, 2005 (and only during such calendar quarter if, and only if, the closing sale price of Essex common shares for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is more than 125% of the exchange price per Essex common share in effect on the applicable trading day;

 

·	during the five consecutive trading-day period following any 20 consecutive trading-day period in which the trading price of the notes was less than 98% of the product of the closing sale price of Essex common shares during such five trading-day period multiplied by the applicable exchange rate;

 

·	if those notes have been called for redemption, at any time prior to 5:00 p.m., New York City time, on the second trading day immediately preceding the redemption date;

 

·	upon the occurrence of specified corporate transactions;

 

·	upon the occurrence of a fundamental change; or

 

·	if Essex common shares cease to be listed on a U.S. national or regional securities exchange or the Nasdaq National Market for a 30 consecutive trading day period.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	distribute to all holders of Essex common shares certain rights entitling them to purchase, for a period expiring within 60 days, Essex common shares at less than the closing sale price of Essex common shares on the trading day immediately preceding the declaration date of such distribution; or

 

·

distribute to all holders of Essex common shares assets, debt securities or certain rights to purchase securities of the Operating Partnership or Essex, which distribution has a per share value exceeding 10% of the closing sale price of Essex common shares on the trading day immediately preceding the declaration date of such distribution,

 

 

 

 

 

 

 

 

 

 

 

·	the exchange rate then in effect; multiplied by

 

·

the average of the daily volume weighted average price per share of Essex common shares for each of the 20 consecutive trading days (appropriately adjusted to take into account the occurrence during such period of stock splits and similar events) beginning on the second trading day immediately following the day the notes are tendered for exchange (the “twenty day weighted average price”). The “volume weighted average price” per Essex common share on any trading day will be the volume weighted average price on the New York Stock Exchange or, if the Essex common shares are not listed on the New York Stock Exchange, on the U.S. national or regional securities exchange, the Nasdaq National Market or over the counter market on which Essex common shares are then listed or traded, from 9:30 a.m. to 4:00 p.m., New York City time, on that trading day as displayed by Bloomberg (or if such volume weighted average price is not available, the market value of one share on such trading day as Essex’s board of directors determine in good faith using a volume weighted method).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	dividends, distributions, rights, warrants, options, other securities or convertible securities referred in to clause (1) or (3) above;

 

·	dividends and distributions in connection with a reclassification, change, consolidation, merger, combination, sale or conveyance resulting in a change in the exchange consideration described below; and

·	cash dividends or distributions referred to in clause (5) below;

 

 

 

 

·	the numerator of which will be the current market price of Essex common shares minus the dividend threshold amount; and

 

·	the denominator of which will be the current market price of Essex common shares minus the amount per share of such dividend or distribution; and

 

 

 

 

 

 

 

·

the issuance of any Essex common shares or Essex Portfolio units, pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Operating Partnership or those of Essex and the investment of additional optional amounts in Essex common shares under any plan;

 

·	the issuance of any Essex common shares or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of the Operating Partnership or Essex;

 

·	the issuance of any Essex common shares pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security outstanding as of the date the notes were first issued;

 

·	a change in the par value of Essex common shares;

 

·	accrued and unpaid interest including additional interest, if any; and

 

·

the issuance of limited partnership units by the Operating Partnership and the issuance of Essex common shares or the payment of cash upon redemption thereof, or the issuance of Essex common shares or the payment of cash upon the redemption of certain limited partnership interests in the Operating Partnership’s “down REIT” entities.

 

 

 

 

 

 

 

 

 

 

	Effective Date
Stock Price	October 25, 2005		November 1, 2006		November 1, 2007		November 1, 2008		November 1, 2009		November 4, 2010
$ 87.39	1.95		2.12		2.09		2.03		1.96		0.00
$ 90.00	1.75		1.91		1.86		1.79		1.69		0.00
$ 95.00	1.42		1.57		1.50		1.41		1.26		0.00
$100.00	1.16		1.28		1.21		1.10		0.93		0.00
$105.00	0.94		1.05		0.98		0.86		0.69		0.00
$110.00	0.76		0.87		0.79		0.68		0.51		0.00
$115.00	0.62		0.72		0.64		0.53		0.38		0.00
$120.00	0.50		0.59		0.52		0.42		0.29		0.00
$125.00	0.40		0.49		0.43		0.34		0.23		0.00
$130.00	0.33		0.41		0.35		0.28		0.19		0.00
$135.00	0.26		0.35		0.30		0.23		0.16		0.00
$140.00	0.21		0.30		0.25		0.20		0.14		0.00

$145.00	0.17		0.26		0.22		0.17		0.13		0.00
$150.00	0.13		0.22		0.19		0.15		0.12		0.00
$155.00	0.10		0.19		0.16		0.14		0.12		0.00
$160.00	0.08		0.17		0.15		0.12		0.11		0.00
$165.00	0.06		0.15		0.13		0.12		0.11		0.00
$170.00	0.05		0.14		0.12		0.11		0.11		0.00

 

 

 

 

 

 

 

 

·

the numerator of which will be (i) in the case of a share exchange, consolidation, merger, or binding share exchange pursuant to which Essex common share are converted into cash, securities, or other property, the value of all cash, securities, and other property (as determined by the Essex board of directors) paid or payable per Essex common shares or (ii) in the case of any other public acquirer change of control, the average of the closing sale price of Essex common shares for the five consecutive trading days prior to but excluding the effective date of such public acquirer change of control; and

 

·	the denominator of which will be the average of the closing sale prices of the public acquirer common stock for the five consecutive trading days commencing on the trading day next succeeding the effective date of such public acquirer change of control.

 

 

 

 

 

 

 

 

·

issue or register the transfer or exchange of any note during a period beginning at the opening of business 15 days before any selection of notes for redemption and ending at the close of business on the earliest date on which the relevant notice of redemption is deemed to have been given to all holders of notes to be so redeemed; or

 

·	register the transfer or exchange of any note so selected for redemption, in whole or in part, except the unredeemed portion of any note being redeemed in part.

 

 

 

 

·	the repurchase price;

 

·	the name and address of the trustee and any paying agent;

 

·	that notes with respect to which the holder has delivered a repurchase notice may be exchanged, if otherwise exchangeable, only if the holder withdraws the repurchase notice in accordance with the terms of the indenture; and

 

·	the procedures that holders must follow to require us to repurchase their notes.

 

 

 

·	if such notes are in certificated form, the certificate number(s), or, if such notes are in book entry form, that such notice complies with appropriate procedures of The Depository Trust Company, or DTC;

 

·	the principal amount of notes to be repurchased, in integral multiples of $1,000, provided that the remaining principal amount of notes is in an authorized denomination; and

 

·	that the notes are to be repurchased by us pursuant to the applicable provisions of the notes.

 

 

·	the name of the holder;

 

·	the certificate number(s) of all withdrawn notes in certificated form or that the withdrawal notice complies with appropriate DTC procedures with respect to all withdrawn notes in book entry form;

 

·	the principal amount of notes being withdrawn, which must be an integral multiple of $1,000; and

 

·	the principal amount of notes, if any, that remains subject to the repurchase notice, which must be an integral multiple of $1,000.

 

 

 

·	such notes will cease to be outstanding;

 

·	interest on such notes will cease to accrue; and

 

·	all rights of holders of such notes will terminate except the right to receive the repurchase price.

 

 

 

 

 

 

 

·

consummation of any transaction or event (whether by means of a share exchange or tender offer applicable to Essex common shares, a liquidation, consolidation, recapitalization, reclassification, combination or merger of Essex or a sale, lease or other transfer of all or substantially all of the consolidated assets of Essex) or a series of related transactions or events pursuant to which all or substantially all of the outstanding Essex common shares are exchanged for, converted into or constitute solely the right to receive cash, securities or other property;

 

·

any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable), other than Essex, the Operating Partnership or any wholly owned subsidiary of Essex or the Operating Partnership, is or becomes the “beneficial owner,” directly or indirectly, of more than 50% of the total voting power in the aggregate of all classes of capital stock of Essex then outstanding entitled to vote generally in elections of directors;

 

·

during any period of 12 consecutive months after the date of original issuance of the notes (for so long as Essex is our general partner immediately prior to such transaction or series of related transactions), persons who at the beginning of such 12 month period constituted the 53 board of directors of Essex, together with any new persons whose election was approved by a vote of a majority of the persons then still comprising the board of directors who were either members of the board of directors at the beginning of such period or whose election, designation or nomination for election was previously so approved, cease for any reason to constitute a majority of the board of directors of Essex;

 

·

Essex ceases to be our general partner or ceases to control us; provided, however, that the pro rata distribution by Essex to its shareholders of shares of its capital stock or shares of any of Essex’s other subsidiaries will not, in and of itself, constitute a fundamental change for purposes of this definition; or

 

·	Essex common shares cease to be traded on a U.S. national or regional securities exchange or quoted on the Nasdaq National Market or another established automated over-the-counter trading market in the United States.

 

 

 

 

 

 

 

·	if such notes are in certificated form, the certificate number(s), or, if such notes are in book entry form, that such notice complies with appropriate procedures of The Depository Trust Company, or DTC;

 

·	the portion of the principal amount of notes to be repurchased, in multiples of $1,000, provided that the remaining principal amount of notes is in an authorized denomination; and

 

·	that the notes are to be repurchased by us pursuant to the applicable provisions of the notes.

 

 

·	the name of the holder;

 

·	the certificate number(s) of all withdrawn notes in certificated form or that the withdrawal notice complies with appropriate DTC procedures with respect to all withdrawn notes in book entry form;

 

·	the principal amount of notes being withdrawn, which must be an integral multiple of $1,000; and

 

·	the principal amount of notes, if any, that remains subject to the repurchase notice, which must be an integral multiple of $1,000.

 

 

 

 

·	such notes will cease to be outstanding;

 

·	interest on such notes will cease to accrue; and

 

·	all rights of holders of such notes will terminate except the right to receive the repurchase price.

 

 

 

 

 

 

 

 

 

 

 

 

·

the Operating Partnership or Essex, as the case may be, shall be the continuing entity, or the successor entity (if other than the Operating Partnership or Essex, as the case may be) formed by or resulting from any consolidation or merger or which shall have received the transfer of assets shall be an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume payment of the principal of and interest on all of the notes and the due and punctual performance and observance of all of the covenants and conditions in the notes, indenture and the registration rights agreement;

·	if as a result of such transaction the notes become exchangeable into common stock or other securities issued by a third party, such third party fully and unconditionally guarantees all obligations under the notes and the indenture;

 

·	immediately after giving effect to the transaction, no event of default under the indenture, and no event which, after notice or the lapse of time, or both, would become an event of default, shall have occurred and be continuing; and

 

·	an officer’s certificate and legal opinion covering these conditions shall be delivered to the trustee.

 

 

 

 

 

·	default in the payment of any principal amount or any redemption price, repurchase price or fundamental change repurchase price due with respect to the notes, when the same becomes due and payable;

 

·	default in payment of any interest (including additional interest, if any) under the notes, which default continues for 30 days;

 

·	default in the delivery when due of the exchange value, whether due in cash or Essex common shares upon exercise of a holder’s exchange right in accordance with the indenture;

 

·	our failure to provide notice of the occurrence of a fundamental change when required under the indenture;

 

·

our failure to comply with any other term, covenant or agreement in the notes or the indenture upon our receipt of notice of such default from the trustee or from holders of not less than 25% in aggregate principal amount of the notes, and the failure to cure (or obtain a waiver of) such default within 30 days after receipt of such notice;

 

·

default in the payment of principal when due on, or resulting in acceleration of, other indebtedness of ours, Essex or any of our significant subsidiaries for borrowed money where the aggregate principal amount with respect to which the default or acceleration has occurred exceeds (a) $50 million with respect to indebtedness secured by real property and (b) $25 million with respect to all other indebtedness, and, in either case, such indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded, prior to written notice of acceleration of the notes.

·	failure by us or any of our subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $5 million, which judgments are not paid, discharged or stayed for a period of 60 days; and

 

·	certain events of bankruptcy, insolvency or reorganization affecting us or any of our significant subsidiaries.

 

 

 

 

·	rescission would not conflict with any judgment or decree of a court of competent jurisdiction;

 

·	interest on overdue installments of interest (including additional interest, if any) (to the extent the payment of such interest is lawful) and on overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid;

 

·	we have paid the trustee its reasonable compensation and reimbursed the trustee for its expenses, disbursements and advances; and

 

·	all events of default, other than the non-payment of the principal amount and any accrued and unpaid interest and additional interest, if any, that have become due solely by such declaration of acceleration, have been cured or waived.

 

 

 

·	the holder has given the trustee written notice of an event of default;

 

·	the holders of at least 25% in aggregate principal amount of outstanding notes make a written request to the trustee to pursue the remedy, and offer reasonable security or indemnity against any costs, liability or expense of the trustee;

 

·	the trustee fails to comply with the request within 60 calendar days after receipt of the request and offer of indemnity; and

·	the trustee does not receive an inconsistent direction from the holders of a majority in aggregate principal amount of outstanding notes.

 

 

·	our failure to pay principal of or interest (including additional interest, if any) on any note when due;

 

·	our failure to exchange any note into Essex common shares (or cash or a combination of Essex common shares and cash, if we so elect) as required by the indenture;

 

·	our failure to pay the redemption price on the redemption date in connection with a redemption by us or the repurchase price on the repurchase date in connection with a holder exercising its repurchase rights; or

 

·	our failure to comply with any of the provisions of the indenture that would require the consent of the holder of each outstanding note affected.

 

 

 

·	impair or adversely affect the manner of calculation or rate of accrual of interest (including additional interest) on the note or change the time of payment thereof;

 

·	make the note payable in money or securities other than that stated in the note;

 

·	change the stated maturity of the note;

 

·	reduce the principal amount, redemption price, repurchase price or fundamental change repurchase price with respect to the note;

 

·	make any change that impairs or adversely affects the rights of a holder to exchange the note;

 

·	make any change that impairs or adversely affects the right to require us to repurchase the note;

 

·	impair the right to institute suit for the enforcement of any payment with respect to the note or with respect to exchange of the note;

 

·	change our obligation to redeem any notes called for redemption on a redemption date in a manner adverse to the holders;

 

·	change our obligation to maintain an office or agency in New York City;

 

·	make the notes subordinate in right of payment to any other indebtedness;

 

·	reduce the percentage in aggregate principal amount of notes outstanding required to modify or amend the indenture; or

 

·	modify certain provisions of the indenture relating to modification of the indenture or waiver under the indenture.

 

·	to evidence a successor to us and the assumption by that successor of our obligations under the indenture and the notes;

 

·	to provide for exchange right of holders of notes if any reclassification or change of Essex common shares or any consolidation, merger or sale of all or substantially all of the property or assets of the Operating Partnership or Essex occurs;

 

·	to add to our covenants for the benefit of the holders of the notes or to surrender any right or power conferred upon us;

 

·	to secure our obligations in respect of the notes;

 

·	to add guarantees;

 

·	to evidence and provide the acceptance of the appointment of a successor trustee under the indenture;

 

·	to comply with the requirements of the SEC in order to effect or maintain qualification of the indenture under the Trust Indenture Act, as contemplated by the indenture or otherwise;

 

·

to cure any ambiguity, omission, defect or inconsistency in the indenture or make any other provision with respect to matters or questions arising under the indenture which we may deem necessary or desirable and which shall not be inconsistent with provisions of the indenture; provided that such modification or amendment does not, in the good faith opinion of Essex’s board of directors, adversely affect the interests of the holders of notes in any material respect;

 

·	to add or modify any provision with respect to matters or questions arising under the indenture which we and the trustee may deem necessary or desirable and which will not adversely affect the interests of the holders of the notes in any material respect; or

 

·	to make any change to the indenture to conform the terms thereof to this prospectus.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

to file with the SEC, by the 90th day after the date we first issued the notes, a shelf registration statement to cover resales of registrable securities (as described below) by the holders who satisfy certain conditions and provide the information we describe below for use with the shelf registration statement;

 

·	to use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act, as promptly as practicable but in any event by the 180th day after the date we first issued the notes; and

 

·	to use our reasonable best efforts to keep the shelf registration statement continuously effective under the Securities Act, until there are no registrable securities outstanding.

 

 

 

 

·	the date the note or any such Essex common share has been effectively registered under the Securities Act and disposed of in accordance with the shelf registration statement; and

 

·	the date when the note or any such Essex common share is eligible for sale pursuant to Rule 144(k) under the Securities Act or any similar provision then in effect.

 

 

 

·	the shelf registration statement is not filed with the SEC by the 90th day after the first issue date of the notes;

 

·	the shelf registration statement has not been declared effective under the Securities Act by the 180th day after the first issue date of the notes;

·

a holder supplies the questionnaire described below after the effective date of the shelf registration statement, and we and Essex fail to supplement or amend the shelf registration statement, or file a new registration statement, in accordance with the terms of the registration rights agreement, in order to add such holder as a selling securityholder;

 

·

the shelf registration statement is filed and has been declared effective under the Securities Act, but then ceases to be effective (without being succeeded immediately by an additional registration statement that is filed and immediately becomes effective) or usable for the offer and sale of registrable securities, other than as a result of a requirement to file a posteffective amendment or prospectus supplement to the registration statement in order to make changes to the information in the prospectus regarding the selling security holders or the plan of distribution, and (1) we and Essex do not cure the lapse of effectiveness or usability of the registration statement within ten business days (or if a suspension period is then in effect, the tenth business day following the expiration of such suspension period) by a posteffective amendment, prospectus supplement or report filed pursuant to the Exchange Act, or (2) if applicable, we and Essex do not terminate the suspension period, described in the preceding paragraphs, by the 30th or 60th day or (3) if suspension periods exceed an aggregate of 90 days in any 360-day period; or

 

·

we and Essex fail to name as a selling securityholder, in the shelf registration statement or any amendment to the shelf registration statement, at the time it becomes effective under the Securities Act, or in any prospectus relating to the shelf registration statement, at the time we and Essex file the prospectus or, if later, the time the related shelf registration statement or amendment becomes effective under the Securities Act, any holder that is entitled to be so named as a selling securityholder,

 

 

 

·	an additional 0.25% of the principal amount to, and including, the 90th day following such registration default; and

 

·	an additional 0.50% of the principal amount from and after the 91st day following such registration default.

 

 

 

 

We and Essex agreed in the registration rights agreement to give notice to all holders of the filing and effectiveness of the initial shelf registration statement by release through a reputable national newswire service. A holder of registrable securities that does not provide us with a completed questionnaire or the information called for by it on or prior to the tenth business day before the date the initial shelf registration statement becomes effective will not be named as a selling securityholder in the shelf registration statement when it becomes effective and will not able to use the shelf registration statement to resell registrable securities. However, such a holder of registrable securities may thereafter provide us with a completed questionnaire, following which we will, as promptly as reasonably practicable after the date we receive the completed questionnaire, but in any event within ten business days after that date (except as described below), file a supplement to the prospectus relating to the shelf registration statement or, if required, file a posteffective amendment or a new shelf registration statement in order to permit resales of such holder’s registrable securities. However, if we and Essex receive the questionnaire during a suspension period, or we and Essex initiate a suspension period within five business days after we receive the questionnaire, then we will, except as described below, make the filing within ten business days after the end of the suspension period. We and Essex will not be required to file more than three such amendments or supplements for all holders during a fiscal quarter. If we and Essex file a posteffective amendment or a new registration statement, then we and Essex will use our and their reasonable best efforts to cause the post-effective amendment or new registration statement to be declared effective under the Securities Act, as promptly as practicable, but in any event by the 30th day in the case of a post-effective amendment and the 60th day in the case of a new registration statement, after the date the registration rights agreement requires us to file the posteffective amendment or new registration statement, as applicable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	First, we will be taxed at regular corporate rates on any undistributed REIT taxable income, including undistributed net capital gain. (However, we can elect to “pass through” any of our taxes paid on our undistributed net capital gain income to our stockholders on a pro rata basis.)

 

·	Second, under certain circumstances, we may be subject to the “alternative minimum tax” on our items of tax preference.

 

·

Third, if we have (a) net income from the sale or other disposition of “foreclosure property” which is held primarily for sale to customers in the ordinary course of business or (b) other nonqualifying income from foreclosure property, we will be subject to tax at the highest corporate rate on such income.

 

·

Fourth, if we have net income from prohibited transactions (which are, in general, certain sales or other dispositions of property held primarily for sale to customers in the ordinary course of business, generally other than property held for at least four years, foreclosure property, and property involuntarily converted), such income will be subject to a 100% penalty tax.

 

·

Fifth, as discussed in detail below, if we should fail to satisfy the gross income tests or the asset tests, and nonetheless maintain our qualification as a REIT because certain other requirements have been satisfied, we ordinarily will be subject to a penalty tax relating to such failure, computed as described below. Similarly, if we maintain our REIT status despite our failure to satisfy one or more requirements for REIT qualification, other than the gross income tests and asset tests, we must pay a penalty of $50,000 for each such failure.

 

·

Sixth, if we should fail to distribute during each calendar year at least the sum of (1) 85% of our ordinary income for such year, (2) 95% of our net capital gain income for such year, and (3) any undistributed taxable income from prior periods, we will be subject to a 4% excise tax on the excess of such required distribution over the amounts distributed.

 

·

Seventh, if we acquire any asset from a C corporation (i.e., generally a corporation subject to full corporate-level tax) in a transaction in which the basis of the asset in our hands is determined by reference to the basis of the asset (or any other property) in the hands of the C corporation, and we recognize gain on the disposition of such asset during the 10-year period beginning on the date on which we acquired such asset, then, to the extent of any built-in, unrealized gain at the time of acquisition, such gain generally will be subject to tax at the highest regular corporate rate.

 

·	Eighth, we may be subject to an excise tax if our dealings with our taxable REIT subsidiaries, defined below, are not at arm’s length.

 

·	Finally, any earnings we derive through a taxable REIT subsidiary will effectively be subject to a corporate-level tax.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	fails to furnish its taxpayer identification number, which for an individual is ordinarily his or her social security number,

 

·	furnishes an incorrect taxpayer identification number,

 

·	is notified by the Internal Revenue Service that it has failed to properly report payments of interest or dividends, or

 

·	fails to certify, under penalties of perjury, that it has furnished a correct taxpayer identification number and that the Internal Revenue Service has not notified the U.S. holder that it is subject to backup withholding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	fixed prices that may be changed;

 

·	prevailing market prices at the time of sale;

 

·	prices related to the prevailing market prices;

 

·	varying prices determined at the time of sale; or

 

·	negotiated prices.

 

 

·	on any national securities exchange or quotation service on which the notes or the Essex common shares may be listed or quoted at the time of sale, including the New York Stock Exchange in the case of the Essex common shares;

 

·	in the over-the-counter-market;

 

·	in transactions otherwise than on these exchanges or services or in the over-the-counter market (privately negotiated transactions);

 

·	through the writing and exercise of options (including the issuance of derivative securities), whether these options or such other derivative securities are listed on an options or other exchange or otherwise;

 

·	through the settlement of short sales; or

 

·	through any combination of the foregoing, or by any legally available means.