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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement"), dated as of August
14, 2001 is by and between Security Capital Preferred Growth Incorporated, a
Maryland corporation (the "Purchaser"), and LF Strategic Realty Investors L.P.,
a Delaware limited partnership (the "Seller").
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, 8,000,000 shares of Series D
Cumulative Convertible Preferred Stock (the "Series D Preferred Shares") of
United Dominion Realty Trust, Inc., a Virginia corporation (the "Company"), on
the terms and subject to the conditions described herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, agreements and warranties herein contained, the parties hereto
agree as follows:
1 PURCHASE AND SALE OF SERIES D PREFERRED SHARES. Subject to the
terms and conditions set forth in this Agreement, at the Closing (as hereinafter
defined), the Seller agrees to sell, assign, transfer, convey and deliver to the
Purchaser, free and clear from any liens, encumbrances or defects of title
(collectively, "Liens"), and the Purchaser agrees to accept, acquire and take
assignment and delivery of, all of the Series D Preferred Shares.
2 CLOSING; PAYMENT OF PURCHASE PRICE.
a Time; Purchase Price. Subject to the terms and conditions set
forth herein, the closing (the "Closing") of the transactions
described herein shall occur on the fifth business day following
the execution and delivery (a) by the Company and the Seller of
the Waiver (as herein defined) and (b) by the Company and the
Purchaser of the New Investment Agreement (as herein defined),
or on such other date as shall be agreed upon by the Seller and
the Purchaser. At the Closing, the Purchaser shall pay the
Seller cash in the amount set forth on Schedule A hereto (the
"Purchase Price"). The Purchase Price shall be paid to the
Seller by means of a wire transfer of immediately available
funds to a bank account designated by the Seller in writing. The
Closing and the deliveries required thereby shall be made at the
offices of the Purchaser, 00 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxx 00000 or at such other place or in such other
manner as shall be agreed upon by the Seller and the Purchaser.
b The Purchaser's Conditions to Closing. The obligation of the
Purchaser to proceed with the Closing shall be conditional upon:
(i) Receipt by the Purchaser from the Seller
of a certificate, dated the day of Closing, of an
executive officer of the general partner of the Seller,
in a form satisfactory to the Purchaser, to the effect
that all representations
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and warranties made by the Seller in this Agreement are
true and correct in all material respects as of the
Closing;
(ii) The Seller and the Company shall have
executed the Waiver and Release Agreement substantially
in the form of Exhibit A (the "Waiver");
(iii) The Company shall have executed the
investment agreement substantially in the form of
Exhibit B (the "New Investment Agreement"); and
(iv) There shall not have been any amendment
to the Company's Restated Articles of Incorporation
since January 21, 1999.
c The Seller's Conditions to Closing. The obligation of the Seller
to proceed with the Closing shall be conditional upon:
(i) Receipt by the Seller from the Purchaser
of a certificate, dated the day of Closing, of an
executive officer of the Purchaser, in a form
satisfactory to the Seller, to the effect that all
representations and warranties made by the Purchaser in
this Agreement are true and correct in all material
respects as of the Closing; and
(ii) The Company shall have executed the
Waiver.
d Deliveries. The Closing shall be completed when each of the
following has been delivered, all of which shall be deemed to
have taken place simultaneously:
(i) The Purchaser shall have delivered to
the Seller the Purchase Price;
(ii) The Seller shall have delivered to the
Purchaser a stock certificate or certificates evidencing
all of the Series D Preferred Shares, which
certificate(s) shall be duly endorsed in blank or
accompanied by duly executed stock powers; and
(iii) All of the Purchaser's Conditions to
Closing and the Seller's Conditions to Closing have been
satisfied.
3 REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby
represents and warrants to the Purchaser:
a Due Organization. The Seller is a limited partnership duly
organized, validly existing and in good standing under the laws
of Delaware, with all requisite power to own its properties and
to conduct its business as now conducted.
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b Authorization. The Seller has the requisite power and authority
to enter into this Agreement and to carry out its obligations
hereunder. This Agreement has been duly and validly executed and
delivered by the Seller and constitutes the legal, valid and
binding agreement of the Seller, enforceable against the Seller
in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally or by general
equitable principles.
c Series D Preferred Shares. The Series D Preferred Shares have
been fully paid and are nonassessable. The Seller is the
beneficial and legal owner of record of all of the Series D
Preferred Shares and holds the Series D Preferred Shares free
and clear of any and all Liens, except for certain restrictions
set forth in the Investment Agreement (as hereinafter defined),
a waiver of which the Seller has obtained from the Company or
will obtain from the Company prior to the Closing. The Seller
has no other agreements, arrangements or understandings, whether
by means of a right of first refusal or first purchase or
otherwise, with respect to a sale or other disposition of the
Series D Preferred Shares. Except for the Investment Agreement,
there are no shareholder agreements, voting trusts or other
agreements or understandings to which the Seller is a party or
by which it is bound relating to the Series D Preferred Shares.
d Consents. Except for such waivers related to the Investment
Agreement as have been obtained or will be obtained before the
Closing, no consent, authorization or approval of, filing or
registration with, waiver of any right of first refusal or first
offer from, or cooperation from, any governmental authority or
any other person not a party to this Agreement is necessary in
connection with the execution, delivery and performance by the
Seller of this Agreement or the consummation by the Seller of
the transactions contemplated hereby.
e No Conflicts. The execution, delivery and performance by the
Seller of this Agreement and the consummation by the Seller of
the transactions contemplated hereby do not and will not (i)
violate any law applicable to the Seller; (ii) except for
restrictions under the Investment Agreement, a waiver of which
the Seller has obtained from the Company or will obtain from the
Company prior to the Closing, violate or conflict with, result
in a breach or termination of, constitute a default or give any
third party any additional right (including a termination right)
under, permit cancellation of, result in the creation of any
Lien upon any of the assets of the Seller pursuant to any
contract to which the Seller is a party or by which the Seller
or any of its assets are bound; or (iii) violate or conflict
with any provision of any of the limited partnership agreement
or similar organizational instruments of the Seller.
f No Default or Violations. The Seller has no Knowledge of any
payment or other default by the Company under the Series D
Preferred Shares or of any current or past
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violation by the Company of its Restated Articles of
Incorporation related to the Series D Preferred Shares.
g Litigation Against the Seller. To the knowledge of the Seller,
there are no actions, suits, mediations, arbitrations,
regulatory proceedings or other litigation, proceedings or
governmental investigations pending or threatened against or
affecting the Seller or any of its affiliates concerning the
Series D Preferred Shares or which might reasonably be expected
to impede the consummation of the transactions contemplated
hereby, and the Seller is not aware of any facts or
circumstances which may give rise to any of the foregoing.
h Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission from any
party in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the
Seller.
i No General Solicitation. The Series D Preferred Shares have not
been offered or sold by the Seller by any form of general
solicitation or general advertising.
j No Undisclosed Material Facts. There is no fact of which the
Seller has Knowledge that has not been publicly disclosed which
could reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), earnings, business,
prospects or operations of the Company.
k No Material Adverse Change. To the Knowledge of the Seller,
since December 31, 2000, there has not occurred any material
adverse change in the condition (financial or otherwise),
earnings, business, prospects or operations of the Company.
l Investment Agreement. The Seller has previously delivered to the
Purchaser a true and correct copy of the Investment Agreement,
effective as of December 7, 1998, by and between the Seller, the
Company and certain other parties (the "Investment Agreement").
There have been no amendments or modifications to, or waivers,
written or verbal, related to, the Investment Agreement, except
for the Waiver.
Except with respect to Section 3(g), the term "Knowledge" means, with
respect to the Seller, the actual knowledge of either Xxxxxx X. Xxxxxx, Chairman
of Lazard Freres Real Estate Investors L.L.C. ("LFREI"), or Xxxxxx X. Xxxxxxxxx,
Principal of LFREI, and expressly excludes the knowledge of any other
shareholder, director, trustee, partner, member, director, officer, manager,
employee, agent or representative of Seller or any of Seller's affiliates.
4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants to the Seller as follows:
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a Due Organization. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Maryland, with all requisite power to own
its properties and to conduct its business as now conducted.
b Authorization. The Purchaser has the requisite power to enter
into this Agreement and to carry out its obligations hereunder.
This Agreement has been duly authorized, executed and delivered
by the Purchaser and constitutes a valid and binding agreement,
enforceable against the Purchaser in accordance with its terms
except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by
general equitable principles.
c Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission from any
party in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the
Purchaser.
d Sophistication of the Purchaser. The Purchaser has such
knowledge and experience in financial and business matters as to
be able to evaluate the merits and risks of the acquisition of
the Series D Preferred Shares, and, having had access to
information as it has considered necessary, reasonably believes
that it is able to bear those risks. The Purchaser is purchasing
the Series D Preferred Shares for investment and not with a view
to or for sale in connection with any public distribution
thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"). The Purchaser understands that
the Series D Preferred Shares have not been registered under the
Securities Act and are being offered and sold pursuant to
exemptions therefrom.
5 COVENANTS.
(a) Each of the Seller and the Purchaser agrees to use its
best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, and to assist and
cooperate with the other in doing, in the most
expeditious manner practicable, all things necessary,
proper or advisable to fulfill all conditions to the
Closing, including obtaining the Company's approval of
the New Investment Agreement and the Waiver.
(b) On and after the date of this Agreement and prior to the
date that this Agreement is terminated in accordance
with Section 6, neither the Seller nor any of its
affiliates shall make an offer or proposal related to,
hold any discussions regarding, negotiate with respect
to, or invite, initiate, solicit or encourage, directly
or indirectly, the making of any proposal or offer
related to, the purchase or sale of the Series D
Preferred Shares.
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6 TERMINATION. This Agreement shall be terminable:
(a) by the parties upon mutual written agreement;
(b) by either party, if the other party materially breaches
any covenant, representation or warranty contained
herein, and such breach is not cured within five
business days after the delivery of written notice by
the nonbreaching party; and
(c) by either party at any time after August 25, 2001 upon
written notice to the other party, provided that the
terminating party is not then in breach of any material
provision of this Agreement.
Upon termination of this Agreement, all obligations of each party hereunder
shall terminate except those obligations pursuant to Section 7 and Section 11.
Neither party shall have any liability to the other party upon a termination of
this Agreement, except for liability arising from the breach of Section 5 hereof
or in the event such termination arises by reason of the material breach of a
covenant, representation or warranty by a party hereto.
7 EXPENSES. Each party hereto shall bear its own expenses with
respect to this transaction.
8 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective heirs,
personal representatives, successors, assigns and affiliates.
9 NOTICES. Any notice or other communication provided for herein
or given hereunder to a party hereto shall be in writing and shall be given by
delivery, by telex, facsimile, telecopier or by mail (registered or certified
mail, postage prepaid, return receipt requested) to the respective parties as
follows:
If to the Purchaser:
Security Capital Preferred Growth Incorporated
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxx
Facsimile: 312-345-5888
With a copy to:
Xxxxx, Xxxxx & Xxxxx
000 X. XxXxxxx Xxxxxx
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Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Facsimile: 000-000-0000
If to the Seller:
LF Strategic Realty Investors L.P.
c/o Lazard Freres Real Estate Investors L.L.C.
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx
Facsimile: 000-000-0000
and
Attn: General Counsel
Facsimile: 000-000-0000
After the Closing, the Seller shall promptly forward all notices or other
correspondence it receives relating to the Series D Preferred Shares to the
Purchaser at the above address.
10 FURTHER ASSURANCES. Upon request of the Purchaser, the Seller
shall execute and deliver such other instruments of conveyance, assignment,
transfer and delivery and take such other actions as the Purchaser reasonably
may request in order to consummate the transactions contemplated by this
Agreement.
11 PUBLIC DISCLOSURE. Except as required by law and communications
to partners of the Seller and to the shareholders of the Purchaser,
respectively, neither the Seller nor the Purchaser may publicly disclose the
existence of the transactions contemplated by this Agreement, including a
summary of the terms of such transactions, unless such party obtains the consent
of the other party hereto, which consent shall not be unreasonably withheld or
delayed.
12 WAIVER. No party may waive any of the terms or conditions of
this Agreement except by a duly signed writing referring to the specific
provision to be waived.
13 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, among the parties hereto and their affiliates with respect to
the matters set forth herein.
14 SEVERABILITY. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
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15 CAPTIONS. The Section references herein are for convenience of
reference only, do not constitute part of this Agreement and shall not be deemed
to limit or otherwise affect any of the provisions hereof.
16 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
17 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Illinois.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the day and year first written above.
SECURITY CAPITAL PREFERRED
GROWTH INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
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Title: Senior Vice President
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LF STRATEGIC REALTY
INVESTORS L.P.
By: Lazard Freres Real Estate Investors L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Title: Principal
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