INVESTMENT AGREEMENT
among
UNITED DOMINION REALTY TRUST, INC.
a Virginia corporation
UNITED DOMINION REALTY, L.P.
a Virginia limited partnership
AMERICAN APARTMENT COMMUNITIES II, INC.
a Maryland corporation
AMERICAN APARTMENT COMMUNITIES III, L.P.
a Delaware limited partnership
AMERICAN APARTMENT COMMUNITIES OPERATING PARTNERSHIP, L.P.
a Delaware limited partnership
SCHNITZER INVESTMENT CORP.
an Oregon corporation
AAC MANAGEMENT LLC
a Delaware limited liability company
and
LF STRATEGIC REALTY INVESTORS, L.P.
a New York limited partnership
Dated: September , 1998
TABLE OF CONTENTS
Page
ARTICLE I CERTAIN DEFINITIONS........................................ 2
ARTICLE II REPRESENTATIONS AND WARRANTIES............................ 5
ARTICLE III LOCK-UP AGREEMENT........................................ 6
Section 3.1.................................................. 6
ARTICLE IV REGISTRATION RIGHTS....................................... 9
Section 4.1 Registration..................................... 9
Section 4.2 State Securities Laws............................ 12
Section 4.3 Expenses......................................... 12
Section 4.4 Indemnification by the Company................... 12
Section 4.5 Agreements of Transaction Party Affiliates....... 13
Section 4.6 Suspension of Registration Requirement:
Restriction on Sale............................ 14
Section 4.7 Contribution..................................... 15
Section 4.8 No Other Obligation to Register.................. 16
Section 4.9 Exchange Act Compliance.......................... 16
Section 4.10 Breach of Agreement............................. 16
ARTICLE V STANDSTILL AGREEMENT....................................... 17
Section 5.1 Standstill....................................... 17
Section 5.2 Termination of Certain Restrictions.............. 18
ARTICLE VI GENERAL PROVISIONS........................................ 20
Section 6.1 Notices.......................................... 20
Section 6.2 Successors and Assigns........................... 23
Section 6.3 Counterparts..................................... 24
Section 6.4 Governing Law.................................... 24
Section 6.5 Severability..................................... 24
Section 6.6 Entire Agreement; Amendment; Waiver.............. 24
Section 6.7 Interpretation; Absence of Presumption........... 24
INVESTMENT AGREEMENT
This Investment Agreement (this "Agreement") is entered into as
of September _, 1998 by and among United Dominion Realty Trust, Inc., a
Virginia corporation (the "Company"), United Dominion Realty, L.P., a
Virginia limited partnership (the "Company Operating Partnership"),
American Apartment Communities II, Inc., a Maryland corporation ("AAC"),
American Apartment Communities III, L.P., a Delaware limited partnership
("AAC III"), American Apartment Communities Operating Partnership, L.P., a
Delaware limited partnership ("AACOP"), Schnitzer Investment Corp., an
Oregon corporation ("Schnitzer"), AAC Management LLC, a Delaware limited
liability company ("AACM" and, collectively with AACOP and Schnitzer, the
"UDR Unit Holders"), and LF Strategic Realty Investors, L.P., a New York
limited partnership (the "Preferred Holder" and, collectively with the UDR
Unit Holders, the "Holders").
RECITALS
WHEREAS, pursuant to that certain Partnership Interest Purchase
and Exchange Agreement, dated September 9, 1998 (the "Exchange Agreement"),
among the Company Operating Partnership, AACLP, Schnitzer, AACOP and AACM,
concurrently herewith the Unit Holders are receiving common units of
limited partnership interest in the Company Operating Partnership (the "UDR
Units"), which UDR Units may be redeemed by the holders thereof for cash
or, at the election of the Company, exchanged for shares of common stock of
the Company, $1 par value ("Common Stock");
WHEREAS, pursuant to that certain Agreement and Plan of Merger,
dated September 9, 1998 (the "Merger Agreement"), between the Company and
AAC concurrently herewith the Preferred Holder is receiving shares of the
Company's Series D Cumulative Convertible Preferred Stock (the "Preferred
Shares"), which Preferred Shares may be converted into shares of Common
Stock;
WHEREAS, AACM proposes to contribute to AAC III certain of the
UDR Units that it will receive pursuant to the Exchange, which contribution
has been consented to by the Company and the Company Operating Partnership
provided AAC III joins in this Agreement as a party hereto; and
WHEREAS, it is a condition precedent to the obligation of the
Holders to consummate the transactions described in the Exchange Agreement
and the Merger Agreement that the Company provide the Holders with the
registration rights set forth in Article IV.
NOW, THEREFORE, in consideration of the foregoing, the mutual
promises and agreements set forth herein, and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement, in addition to the other terms defined
herein the following capitalized defined terms shall have the following
meanings:
"AAC Affiliate" shall mean any Person who was an "affiliate" of
AAC (within the meaning of paragraph (c) of Rule 145) at the time the
Merger was submitted for the vote or consent of the security holders of
AAC.
"AACLP" shall mean American Apartment Communities II, L.P., a
Delaware limited partnership.
"Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 under the Exchange Act.
"Average Market Capitalization" on or as of any date shall mean
the Company's average common equity market capitalization for the ten
consecutive Trading Days prior to but not including such date. The number
of shares of Common Stock into which the Preferred Shares outstanding at
the determination date are convertible shall be taken into account in any
determination of Average Market Capitalization; otherwise, Average Market
Capitalization shall not be determined on a Fully-Diluted Basis.
"Beneficial Ownership" shall be determined in accordance with
Rule 13d-3 of the SEC under the Exchange Act. "Beneficially Own" shall have
a correlative meaning.
"Board" shall mean the Board of Directors of the Company.
"Change of Control" shall mean (i) the merger or consolidation of
the Company with any other real estate investment trust, corporation or
other business entity, in which the Company is not the survivor (without
respect to the legal structure of the transaction), (ii) the transfer or
sale of all or substantially all of the assets of the Company other than to
an Affiliate or subsidiary of the Company, (iii) the liquidation of the
Company, (iv) the acquisition by any person or by a group of persons acting
in concert, of more than 50% of the outstanding voting securities of the
Company, which results in the resignation or addition of 50% or more
members of the Board or the resignation or addition of 50% or more
independent members of the Board, or (v) cessation for any reason of those
directors of the Company who were elected at the annual meeting of
shareholders of the Company immediately preceding the determination date
(together with any new directors elected after such annual meeting whose
election by the Board or whose nomination for election by the shareholders
of the Company was approved by a vote of 66 2/3% of the directors who were
either elected at such annual meeting or whose election or nomination for
election was previously so approved) to constitute a majority of the Board
in office on the determination date.
"Control" shall mean with respect to any Person the power to
direct the management and policies of such Person, directly or indirectly,
whether through ownership of voting securities, by contract or otherwise.
"Controlled" shall have a correlative meaning.
"Conversion Shares" shall mean any shares of Common Stock into
which Preferred Shares are convertible or which may be issued in exchange
for UDR Units upon redemption of such UDR Units.
"Exchange" shall mean the exchange of units of limited
partnership in AACLP for cash and UDR units contemplated by the Exchange
Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Family Member" shall mean any of the following who is at least
18 years of age: a spouse, a child (natural or adopted), a spouse of any
child, a sibling or a lineal descendant of any of the foregoing, or a trust
for the benefit of any of the foregoing, without regard to the age of the
beneficiary or beneficiaries, provided such trust will not terminate in
respect of any of the foregoing who is a beneficiary until such beneficiary
attains 18 years of age.
"First-Tier Transferee" shall mean any Permitted Preferred Share
Transferee (as defined in Section 3.1(c)), any security holder of the
Preferred Holder to whom Preferred Shares are distributed and any security
holder of a UDR Unit Holder or Family Member of such security holder to
whom UDR Units are distributed.
"Fully-Diluted Basis" as a qualifier of any determination to be
made pursuant to this Agreement shall mean that number of shares of Common
Stock then outstanding, plus the number of shares of Common Stock issuable
upon conversion or exchange of other securities which are then convertible
into or exchangeable for Common Stock, plus the number of votes which may
be cast by holders of other securities of the Company then outstanding that
are entitled to vote with the holders of the Common Stock as a single
voting group shall be taken into account in making such determination.
"Group" shall mean a "group," as such term is used in Section
13(d)(3) of the Exchange Act, identified in a Schedule 13D filed or
proposed to be filed with respect to the Company.
"Merger" shall mean the merger of AAC with and into the Company
contemplated by the Merger Agreement.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"NYSE" shall mean the New York Stock Exchange.
"Partnership Agreement" shall mean the agreement of limited
partnership, as amended, of the Company Operating Partnership.
"Person" shall mean an individual, partnership, corporation,
trust, or unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, as amended or supplemented
from time to time, and any documents incorporated by reference therein.
"Registration Expenses" shall mean any and all expenses incident
to performance of or compliance with this Agreement, including, without
limitation: (i) all SEC, stock exchange or NASD registration and filing
fees; (ii) all fees and expenses incurred in connection with compliance
with state securities or "blue sky" laws (including reasonable fees and
disbursements of counsel in connection with "blue sky" qualification of any
of the Conversion Shares and the preparation of a Blue Sky Memorandum) and
compliance with the rules of the NASD; (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, certificates and
other documents relating to the performance of and compliance with this
Agreement; (iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Conversion Shares on any securities exchange
or exchanges pursuant to Section 4.1(d) hereof; and (v) the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any special audit or
"cold comfort" letters required by or incident to such performance and
compliance. Registration Expenses shall specifically exclude underwriting
discounts and commissions relating to the sale or disposition of Conversion
Shares by any Holder or Transaction Party Affiliate, the fees and
disbursements of counsel representing any Holder or Transaction Party
Affiliate, and transfer taxes, if any, relating to the sale or disposition
of Conversion Shares by any Holder or Transaction Party Affiliate, all of
which shall be borne by such Holder or Transaction Party Affiliate in all
cases.
"Registration Statement" shall mean any registration statement of
the Company that covers the issuance of any Conversion Shares and/or the
reoffering thereof by a Transaction Party Affiliate on an appropriate form,
and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all materials incorporated by
reference therein.
"Rule 144" shall mean Rule 144 under the Securities Act.
"Rule 145" shall mean Rule 145 under the Securities Act.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall mean the Preferred Shares and the UDR Units
collectively or, as the context may indicate, either the Preferred Shares
or the UDR Units, and shall include any Conversion Shares or other
securities of the Company issued or issuable upon conversion or exchange
thereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Trading Day" for purposes of any computation pursuant to this
Agreement in which the market value of any security of the Company is taken
into account, shall mean any day on which such security is traded on the
NYSE, or if such security is not listed or admitted for trading on the
NYSE, on the principal national securities exchange on which such security
is listed or admitted for trading, or if not listed or admitted for trading
on any national securities exchange, on the NASDAQ National Market or, if
such security is not quoted on the NASDAQ National Market, in the
applicable securities market in which the security is traded.
"Transaction Party Affiliate" shall mean any AAC Affiliate or any
Holder or First-Tier Transferee who becomes a UDR Affiliate as a result of
the Merger or the Exchange and shall include any pledgee for whom a
Registration Statement is filed pursuant to Section 4.1(a)(iv) or (v).
"UDR Affiliate" shall mean any Person who is an "affiliate" of
the Company within the meaning of paragraph (a)(1) of Rule 144.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
In order to assure the Company's compliance with applicable
securities laws, each Holder represents and warrants to the Company as of
the date of this Agreement, as follows:
(a) Such Holder is an "accredited investor" as defined in
Rule 501(a) of the Securities Act.
(b) Such Holder is aware that the Securities have not been
registered under the Securities Act.
(c) The Securities are being acquired for such Holder's own
account without any intention to distribute or resell the Securities in
violation of the Securities Act or any applicable state securities or "blue
sky" law.
(d) Such Holder has received and thoroughly read and
evaluated the information concerning the Company and the Company
Operating Partnership provided to such Holder by the Company, through
the management of AAC, in connection with the Merger and the Exchange,
and has been given the opportunity to ask questions of, and receive
answers from, the Company and its authorized representatives
concerning the terms and conditions of the Merger and the Exchange and
to obtain such additional information from the Company and its
authorized representatives as such Holder has considered appropriate.
Such Holder has assumed the accuracy and completeness of all such
information and that such information did not omit to
state a material fact necessary to make such information not
misleading in light of the circumstances.
(e) Such Holder has sought such accounting, legal and
tax advice as such Holder has considered necessary to make an informed
investment decision.
(f) Such Holder is experienced in investment and
business matters (or has been advised by an investment advisor who is
so experienced), and understands fully the nature of the risks
involved in an investment in the Securities.
(g) (i) Such Holder's office address as set forth in
Section 6.1 hereof is correct; (ii) such Holder is not a foreign
Person for purposes of U.S. income taxation; and (iii) such Holder is
not subject to backup withholding either because Holder has not been
notified by the Internal Revenue Service ("IRS") that Holder is
subject to backup withholding as a result of a failure to report all
interest or dividends, or because Holder has been notified by the IRS
that Holder is no longer subject to backup withholding.
(h) All information that such Holder has provided to
the Company, directly or indirectly, concerning such Holder's
financial position and such Holder's knowledge of financial and
business matters is correct and complete as of the date hereof, and if
there should be any material change in such information prior to the
delivery of the Securities to such Holder, such Holder will
immediately notify the Company.
ARTICLE III
LOCK-UP AGREEMENT
Section 3.10
(a) (i) The Preferred Holder agrees that until the
second anniversary of the date of original issue of the
Securities (the "Lock-up Period"), except as otherwise
provided in this Agreement, the Preferred Holder will not
offer, pledge, sell, contract to sell, grant any options for
the sale of, seek the redemption or exchange of, transfer,
distribute or otherwise dispose of, directly or indirectly
(collectively "Dispose Of"), any of the Preferred Shares or
Conversion Shares into which Preferred Shares have been
converted.
(ii) Following the second anniversary of the date of
original issuance of the Preferred Shares and during any 12
month period thereafter, except as otherwise provided in
this Agreement, the Preferred Holder shall be entitled to
Dispose Of Preferred Shares, Conversion Shares or a
combination of Preferred Shares and Conversion Shares
representing up to the greater of (i) 50% of the original
number of
Preferred Shares, or their equivalent in Conversion Shares,
or a combination of Preferred Shares and Conversion Shares
representing up to 50% of the original number of Preferred
Shares or (ii) the number of Conversion Shares or equivalent
number of Preferred Shares, or a combination thereof,
equaling the number of shares of Common Stock the total
closing sale price of which on the NYSE on the day before
the day on which the Preferred Holder seeks to Dispose Of
such Securities is not more than 5% of Average Market
Capitalization on such date. For purposes of this Section
3.1(a)(ii) and Section 3.1(c), a number of Preferred Shares
shall be deemed to be equivalent to the number of Conversion
Shares into which it is convertible at the Conversion Price
provided in the Company's Articles of Incorporation on the
determination date, and a number of Conversion Shares shall
be deemed to be equivalent to the number of Preferred Shares
that, if converted at such Conversion Price, would equal
such number of Conversion Shares.
(iii) The restrictions in Sections 3.1(a)(i) and
3.1(a)(ii) shall terminate upon the occurrence of any
Standstill Termination Event. The restrictions in Section
3.1(a)(i) shall terminate upon any breach by the Company of
its obligations under Article IV.
(b) (i) Each UDR Unit Holder agrees that during the
Lock-up Period, except as otherwise provided in this
Agreement, such UDR Unit Holder will not redeem any of the
UDR Units.
(ii) After the first anniversary, and prior to the
second anniversary, of the date of original issue of the
Securities, the UDR Unit Holders may collectively redeem in
accordance with the Partnership Agreement UDR Units having
an aggregate value not exceeding $15,000,000. The ability of
the UDR Unit Holders to redeem up to an aggregate of
$15,000,000 pursuant to the preceding sentence shall be
allocated among such UDR Unit Holders pro-rata, based upon
the number of UDR Units issued to each UDR Unit Holder
pursuant to the Exchange Agreement. For purposes of this
Section 3.1(b)(ii), the value of the UDR Units shall be
assumed to be equal to the Cash Amount (as defined in the
Partnership Agreement) that the Company Operating
Partnership would be obligated to pay to the UDR Unit
Holders upon redemption of such UDR Units pursuant to
Article VIII of the Partnership Agreement.
(iii) The restrictions in Sections 3.1(b)(i) and
3.1(b)(ii) shall terminate upon the occurrence of any
Standstill Termination Event described in Section
5.2(b)(ii), (iii), (iv) or (v). The restrictions in Section
3.1(b)(i) shall terminate upon any breach by the Company of
its obligations under Article IV. Upon any such termination
pursuant to this Section 3.1(b)(iii), such UDR Unit Holders
may redeem any or all UDR Units thereafter if the UDR Units
are then redeemable under the terms of the Partnership
Agreement. Such termination shall not affect any provision
of the Partnership Agreement restricting or otherwise
relating to redemption of UDR Units.
(c) The Preferred Holder may distribute any of its Preferred
Shares and Conversion Shares to its security holders (any such
security holder, a "Permitted Preferred Share Transferee") if before
such distribution it shall deliver to the Company:
(i) an opinion of counsel reasonably acceptable to the
Company that such distribution will not constitute or result
in a violation of the registration requirements of the
Securities Act and state "blue sky" laws,
(ii) agreements substantially identical in form and
substance to this Agreement executed by each Permitted
Preferred Share Transferee who will together with the
Controlled Affiliates of such Permitted Preferred Share
Transferee Beneficially Own as a result of such distribution
more than 40% of the original number of Preferred Shares, or
their equivalent in Conversion Shares, or a combination of
Preferred Shares and Conversion Shares representing more
than 40% of the original number of Preferred Shares.
Upon any such distribution, each Permitted Preferred Share Transferee
shall continue to be bound by Section 3.1(a)(i), shall be entitled to
all of the rights of, subject to all limitations and obligations
applicable to, the Preferred Holder under Article IV, and, except as
contemplated by Section 3.1(c)(ii), shall not be bound by Section 5.1
but shall be entitled to the benefits of Section 5.2.
(d) The Company and the Company Operating Partnership
will consider any proposal by any UDR Unit Holder to
distribute any of its UDR Units and Conversion Shares to its
security holders and, in the case of any such security
holder who is an individual, such individual's Family
Members, in light of factors relevant at the time of such
proposal, including but not limited to whether such proposed
distribution is likely to cause the Company Operating
Partnership to be a "publicly traded partnership" as defined
in Section 7704 of the Internal Revenue Code of 1986, as
amended, and whether all participants in such proposed
distribution are "accredited investors" as defined in Rule
501(a) under the Securities Act. This Section 3.1(d) shall
not be construed to require consent to any such proposal,
and any such distribution, if consented to, shall be subject
to all applicable provisions of the Partnership Agreement.
(e) Notwithstanding Sections 3.1(a)(i) and 3.1(a)(ii),
the Preferred Holder may from time to time, in a transaction
or transactions entered into bona fide and not for the
purpose of evading any provision of this Agreement, pledge
all or any of the Preferred Shares (i) to a bank or other
financial institution to secure obligations for borrowed
money or (ii) as margin collateral. Upon foreclosure or
private sale under any such pledge, neither the pledgee nor
any transferee of the pledgee shall be bound by or entitled
to any benefits or rights under any provision of this
Agreement (except this Section 3.1(e) and Article IV). Prior
to any such pledge, foreclosure or private sale, the Company
shall receive an opinion of counsel reasonably acceptable to
the Company to the effect that the applicable transaction
will not constitute or
result in a violation of the registration requirements of the
Securities Act and state "blue sky" laws.
(f) Notwithstanding Sections 3.1(b)(i) and 3.1(b)(ii),
any UDR Unit Holder may from time to time, in a transaction
or transactions entered into bona fide and not for the
purpose of evading any provision of this Agreement, pledge
all or any of its UDR Units (i) to a bank or other financial
institution to secure obligations for borrowed money or (ii)
as margin collateral, provided, however, that the pledgee
shall agree that upon any foreclosure or private sale under
such pledge, all such UDR Units will be sold to not more
than one purchaser. Upon any such foreclosure or private
sale, neither the pledgee nor any transferee of the pledgee
shall be bound by or entitled to any benefits or rights
under any provision of this Agreement (except this Section
3.1(f) and Article IV). Prior to any such pledge,
foreclosure or private sale, the Company shall receive an
opinion of counsel reasonably acceptable to the Company to
the effect that the applicable transaction will not
constitute or result in a violation of the registration
requirements of the Securities Act and state "blue sky"
laws. The provisions of Article IX of the Partnership
Agreement shall apply to any such foreclosure or private
sale as though the pledgee were the transferor Limited
Partner, as defined in the Partnership Agreement, referred
to therein and the purchaser on foreclosure or in the
private sale were the assignee of such transferor Limited
Partner.
ARTICLE IV
REGISTRATION RIGHTS
Section 4.10...Registration.
(a) Filing of Registration Statement. Subject to the
conditions set forth in this Agreement, the Company shall file a
Registration Statement:
(i) with respect to Conversion Shares issuable upon exchange
for UDR Units redeemable in accordance with Section
3.1(b)(ii), not later than 14 days after the first
anniversary of the date of original issue of the Securities,
(ii) with respect to the Conversion Shares issuable upon
conversion of the Preferred Shares, not later than 14 days
after the earlier of (A) the first anniversary of the date
of original issue of the Securities or (B) the occurrence of
a Standstill Termination Event,
(iii) with respect to the Conversion Shares issuable upon
exchange for UDR Units other than those, if any, with
respect to which a Registration Statement has been filed
(and continues to be effective) pursuant to (i) above, not
later than 14 days after the earlier of (A) expiration of
the Lock-up Period or (B) termination of the restrictions in
Section 3.1(b)(i) and 3.1(b)(ii),
(iv) with respect to Conversion Shares issuable on
conversion of Preferred Shares pledged pursuant to
Section3.1(e) other than such Conversion Shares, if any,
with respect to which a Registration Statement has been
filed (and continues to be effective) pursuant to (ii)
above, promptly after receipt of notice from the pledgee of
a foreclosure on or private sale of such Conversion Shares
pursuant to such pledge, and (v) with respect to Conversion
Shares issuable upon exchange of UDR Units pledged pursuant
to Section3.1(f) other than such Conversion Shares, if any,
with respect to which a Registration Statement has been
filed (and continues to be effective) pursuant to (i) above,
promptly after receipt of notice from the pledgee of a
foreclosure on or private sale of such Conversion Shares
pursuant to such pledge,
and shall cause such Registration Statement to be declared effective
by the SEC as soon as practicable but in no event later than 60 days
after filing. The Company agrees to use reasonable efforts to keep the
Registration Statement, after its date of effectiveness, continuously
effective in accordance with Section 4.1(c). The Company will include
in any Registration Statement relating to Conversion Shares issued to
a Transaction Party Affiliate the disclosures necessary to enable such
Transaction Party Affiliate to reoffer such Conversion Shares in
compliance with the Securities Act by delivery of the Prospectus
included therein, unless such use of such Registration Statement is
prohibited by any rule or regulation (including staff interpretation)
of the SEC, in which case the Company shall file simultaneously with
such Registration Statement a separate Registration Statement relating
to the reoffer of such Conversion Shares by such Transaction Party
Affiliate (a "Reoffer Registration Statement"), shall cause such
Reoffer Registration Statement to be declared effective by the SEC as
soon as practicable but in no event later than 60 days after filing,
and shall use reasonable efforts to keep such Reoffer Registration
Statement, after its date of effectiveness, continuously effective in
accordance with Section 4.1(c). The term "Reoffer Registration
Statement" shall include any Registration Statement applicable to both
the issuance of Conversion Shares and the reoffer of such Conversion
Shares by a Transaction Party Affiliate. In the event that under any
rule or regulation (including staff interpretation) of the SEC, a
Registration Statement filed pursuant to this Section 4.1(a) may not
be used to register Conversion Shares for purposes of distribution of
such Conversion Shares to any Holder and/or any First-Tier Transferee,
such Registration Statement shall relate to the reoffer of such
Conversion Shares by such Holder and/or such First-Tier Transferee,
such Registration Statement shall be deemed a Reoffer Registration
Statement for purposes of this Article IV, and the Holder and /or each
such First-Tier Transferee shall be deemed a Transaction Party
Affiliate for such purposes. The Company shall not be deemed to be in
breach of this Section 4.1(a) if the SEC refuses to accept or make
effective a Reoffer Registration Statement filed pursuant to (ii)
above because the Conversion Shares to which such Registration
Statement relates are subject to the restrictions in Section
3.1(a)(1), provided the Company refiles such Reoffer Registration
Statement promptly after such restrictions terminate and causes such
Reoffer Registration Statement to be declared effective by the SEC as
soon as practicable but in no event later than 60 days after refiling.
(b) Notification and Distribution of Materials. The Company
shall promptly notify each Transaction Party Affiliate of the
effectiveness of any Reoffer Registration Statement applicable to
Conversion Shares issued to such Transaction Party Affiliate or
pledgee and shall furnish to such Transaction Party Affiliate such
number of copies of such Reoffer Registration Statement (including any
amendments, supplements and exhibits), the Prospectus contained
therein (including each preliminary prospectus and all related
amendments and supplements) and any documents incorporated by
reference in the Reoffer Registration Statement or such other
documents as such Transaction Party Affiliate may reasonably request
in order to facilitate the reoffer and sale of such Conversion Shares
in the manner described in such Reoffer Registration Statement.
(c) Amendments and Supplements. The Company shall prepare
and file with the SEC from time to time such amendments and
supplements to each Registration Statement and Prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective and, in the case of a Reoffer Registration
Statement, to comply with the provisions of the Securities Act with
respect to the disposition of the Conversion Shares offered by the
Transaction Party Affiliates for which such Reoffer Registration
Statement is filed, until all Conversion Shares have been issued upon
conversion of Preferred Shares and exchange of UDR Units and, in the
case of such Reoffer Registration Statement, until the earlier of (a)
the date on which such Transaction Party Affiliates no longer hold any
Conversion Shares or (b) in the case of Transaction Party Affiliates
who are AAC Affiliates, the date on which no such Transaction Party
Affiliates are deemed to be engaged in a distribution by reason of
paragraph (d)(3) of Rule 145, or, in the case of Transaction Party
Affiliates who are UDR Affiliates and Persons who are deemed to be
Transaction Party Affiliates pursuant to the last sentence of Section
4.1(a), the Conversion Shares held by such Transaction Party
Affiliates or deemed Transaction Party Affiliates become eligible for
sale under paragraph (k) of Rule 144 (the "Reoffer Registration
Expiration Date"). Upon 20 business days' notice from a Transaction
Party Affiliate, the Company shall file any supplement or
post-effective amendment to a Reoffer Registration Statement with
respect to such Transaction Party Affiliate's plan of distribution,
such Transaction Party Affiliate's ownership interests in securities
of the Company, or other matters required to be disclosed therein,
that is reasonably necessary to permit the reoffer and sale of such
Transaction Party Affiliate's Conversion Shares pursuant to such
Reoffer Registration Statement. The Company shall cause the Conversion
Shares registered under any Registration Statement to be then listed
or quoted on the primary exchange or quotation system on which the
Common Stock is then listed or quoted.
(d) Notice of Certain Events. The Company shall promptly
notify each Transaction Party Affiliate of, and confirm in writing,
the filing of a Reoffer Registration Statement relating to the
Conversion Shares of such Transaction Party Affiliate or any
Prospectus, amendment or supplement related thereto or any
post-effective amendment to such Reoffer Registration Statement and
the effectiveness of such
Reoffer Registration Statement and any post-effective amendment.
At any time when a Prospectus included in a Reoffer
Registration Statement is required to be delivered under the
Securities Act by a Transaction Party Affiliate, the Company shall
immediately notify each Transaction Party Affiliate of the happening
of any event as a result of which the Prospectus included in such
Reoffer Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. In such event, the Company shall promptly prepare and
furnish to each applicable Transaction Party Affiliate a reasonable
number of copies of a supplement to or an amendment of such Prospectus
as may be necessary so that, as thereafter delivered to offerees of
such Transaction Party Affiliate's Conversion Shares, such Prospectus
shall not include 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 light of the circumstances under which
they are made, not misleading. The Company will, if necessary, amend
the Reoffer Registration Statement of which such Prospectus is a part
to reflect such amendment or supplement.
Section 4.20 State Securities Laws.
Subject to the conditions set forth in this Agreement, the
Company shall, in connection with the filing of any Registration
Statement hereunder, file such documents as may be necessary to
register or qualify the Conversion Shares to which such Registration
Statement relates (with respect to the issuance of such Conversion
Shares and, if applicable, the subsequent resale thereof) under the
securities or "blue sky" laws of such states as any Transaction Party
Affiliate offering such Conversion Shares may reasonably request, and
the Company shall use its best efforts to cause such filings to become
effective; provided, however, that the Company shall not be obligated
to qualify as a foreign corporation to do business under the laws of
any such state in which it is not then qualified or to file any
general consent to service of process in any such state. Once
effective, the Company shall use its best efforts to keep such filings
effective until the earlier of (a) the Reoffer Registration Expiration
Date or (b) in the case of a particular state, such Transaction Party
Affiliate has notified the Company that it no longer requires an
effective filing in such state in accordance with its original request
for filing.
Section 4.30 Expenses.
The Company shall bear all Registration Expenses incurred in
connection with the registration of the Conversion Shares pursuant to
this Agreement.
Section 4.40 Indemnification by the Company.
The Company agrees to indemnify each Transaction Party
Affiliate and its officers, directors, employees, agents,
representatives and Transaction Party Affiliates, and each person or
entity, if any, that controls such Transaction Party Affiliate within
the meaning of the Securities
Act, and each other person or entity, if any, subject to liability
under the Securities Act because of his, her or its connection with a
Transaction Party Affiliate (each, an "Indemnitee"), against any and
all losses, claims, damages, actions, liabilities, costs and expenses
(including without limitation reasonable fees, expenses and
disbursements of attorneys and other professionals), joint or several,
arising out of or based upon any violation by the Company of any rule
or regulation promulgated under the Securities Act applicable to the
Company and relating to action or inaction required of the Company in
connection with any Reoffer Registration Statement or the related
Prospectus relating to Conversion Shares offered by such Transaction
Party Affiliate, or upon any untrue or alleged untrue statement of
material fact contained in such Reoffer Registration Statement or
Prospectus, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, that the Company shall not be
liable to such Indemnitee or any person who participates as an
underwriter in the offering or sale of such Conversion Shares or any
other person, if any, who controls such underwriter within the meaning
of the Securities Act, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission
made in any such Registration Statement or in any such Prospectus in
reliance upon and in conformity with information regarding such
Transaction Party Affiliate or its plan of distribution that was
furnished to the Company for use in connection with such Reoffer
Registration Statement or related Prospectus by such Transaction Party
Affiliate or (ii) such Transaction Party Affiliate's failure to send
or give a copy of the final, amended or supplemented Prospectus
furnished to such Transaction Party Affiliate by the Company at or
prior to the time such action is required by the Securities Act to the
person claiming an untrue statement or alleged untrue statement or
omission or alleged omission if such statement or omission was
corrected in such final, amended or supplemented Prospectus.
Section 4.50 Agreements of Transaction Party Affiliates.
The Company shall have no obligation or liability to any
Transaction Party Affiliate under this Article IV unless such
Transaction Party Affiliate shall have entered into a written
agreement with the Company or shall otherwise be obligated to the
Company (a) to cooperate with the Company and to furnish to the
Company all such information concerning its plan of distribution with
respect to its Conversion Shares, its ownership of Company securities
and other matters in connection with the preparation of a Reoffer
Registration Statement with respect to such Conversion Shares as the
Company may reasonably request, (b) to deliver or cause delivery of
the Prospectus contained in such Reoffer Registration Statement to any
purchaser of the shares covered by such Registration Statement from
such Transaction Party Affiliate, (c) to indemnify the Company, its
officers, directors, employees, agents, representatives and
Transaction Party Affiliates, and each person, if any, who controls
the Company within the meaning of the Securities Act, and each other
person, if any, subject to liability under the Securities Act because
of this connection with the Company, against any and all losses,
claims, damages, actions, liabilities, costs and expenses arising out
of or based upon (i) any untrue
statement or alleged untrue statement of material fact contained in
such Reoffer Registration Statement or the related Prospectus, or any
omission or alleged omission to state therein 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, if and to the extent that such statement or omission
occurs from reliance upon and in conformity with written information
regarding such Transaction Party Affiliate that was furnished to the
Company in writing by such Transaction Party Affiliate specifically
for use therein, unless such statement or omission was corrected in
writing to the Company not less than three (3) business days prior to
the date of the final Prospectus (as supplemented or amended, as the
case may be) or (ii) the failure of such Transaction Party Affiliate,
through no fault of the Company, to deliver or cause to be delivered
the Prospectus contained in such Reoffer Registration Statement (as
amended or supplemented if applicable) furnished by the Company to
such Transaction Party Affiliate to any purchaser from such
Transaction Party Affiliate of the Conversion Shares to which such
Reoffer Registration Statement relates, (d) if requested by the
Company in the case of a Company-initiated non-underwritten offering,
or if requested by the managing underwriter in a Company-initiated
underwritten offering, not to effect any public sale or distribution
of any Conversion Shares, including a sale pursuant to Rule 144,
during the period of 60 days beginning 15 days prior to the proposed
offering date specified in such request; provided, however, that the
aggregate of all periods of restrictions on resale imposed on any
Transaction Party Affiliate as a result of requests under this Section
4.5(d) and of deferral or suspension of the Company's obligation to
cause a Registration Statement for the Conversion Shares of such
Transaction Party Affiliate or to amend or supplement such a
Registration Statement pursuant to Section 4.6(b) shall not exceed 90
days during any 12 month period, (e) following the effectiveness of
any Reoffer Registration Statement relating to Conversion Shares of
such Transaction Party Affiliate, not to effect any sales of such
Conversion Shares pursuant to such Reoffer Registration Statement at
any time after such Transaction Party Affiliate has received notice
from the Company to suspend sales as a result of the occurrence or
existence of any event referred to in Section 4.6(b) or so that the
Company may correct or update such Reoffer Registration Statement,
provided that such Transaction Party Affiliate may recommence
effecting sales of such Conversion Shares pursuant to such Reoffer
Registration Statement following further notice to such effect from
the Company, which notice shall be given by the Company not later than
five business days after the cessation of any such event, and (f)
incorporating the provisions of Section 4.7.
Section 4.60 Suspension of Registration Requirement:
Restriction on Sale.
(a) The Company shall promptly notify each Transaction Party
Affiliate, and confirm such notice in writing, of (i) the Company's
receipt of any notification with respect to the suspension of the
qualification of such Transaction Party Affiliate's Conversion Shares
for offer or sale in any jurisdiction or the initiation of any
proceedings for that purpose and (ii) the issuance by the SEC of any
stop order suspending the effectiveness of a Reoffer Registration
Statement with respect to such Transaction Party Affiliate's
Conversion Shares or the initiation of any proceedings for that
purpose. The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of such Reoffer
Registration Statement or the qualification of such Conversion Shares
at the earliest possible moment.
(b) Notwithstanding anything to the contrary set forth in
this Agreement, the Company may defer its obligation to cause a
Registration Statement to become effective or to amend or supplement a
Registration Statement for a period of not more than 60 days in the
event of (i) an underwritten primary offering by the Company if the
Company is advised by the managing underwriter of such offering that
the sale of Conversion Shares under such Registration Statement would
impair the pricing or commercial practicality of such offering, or
(ii) pending negotiations relating to, or consummation of, a
transaction or the occurrence of an event that would require
additional disclosure of material information by the Company in such
Registration Statement, as to which the Company has a bona fide
business purpose for preserving confidentiality or which renders the
Company unable to comply with SEC requirements and that would in each
case make it impractical or inadvisable to cause such Registration
Statement to become effective or to amend or supplement such
Registration Statement; provided, however, that the Company shall not
defer or suspend its obligation under this Agreement to cause a
Registration Statement to become effective or to amend or supplement a
Registration Statement pursuant to this Section 4.6(b) for an
aggregate period of more than 90 days during any 12 month period. The
Company shall notify each Holder of the existence and, in the case of
an event referred to in clause (i) of this Section 4.6 (b), the nature
of any such event.
Section 4.70 Contribution.
If the indemnification provided for in Sections 4.4 and
4.5(c) is unavailable to an indemnified party with respect to any
losses, claims, damages, actions, liabilities, costs or expenses
referred to therein or is insufficient to hold the indemnified party
harmless as contemplated therein, then the indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, actions, liabilities, costs or expenses in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and the indemnified party, on the
other hand, in connection with the statements or omissions that
resulted in such losses, claims, damages, actions, liabilities, costs
or expenses as well as any other relevant equitable considerations.
The relative fault of the indemnifying party, on the one hand, and of
the indemnified party on the other hand, shall be determined by
reference to, among other factors, whether the untrue or alleged
untrue statement of a material fact or omission to state a material
fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission; provided, however, that in no event shall the
obligation of any indemnifying party to contribute under this Section
4.7 exceed the amount that such indemnifying party would have been
obligated to pay by way of indemnification if the indemnification
provided for under Sections 4.4 or 4.5(c) had been available under the
circumstances.
The Company and the Holders agree that it would not be just
and equitable if contribution pursuant to this Section 4.7 were
determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to
in the immediately preceding paragraph.
Notwithstanding the provision of this Section 4.7, no
Transaction Party Affiliate shall be required to contribute any amount
in excess of the amount by which the gross proceeds from the sale of
such Transaction Party Affiliate's Conversion Shares exceeds the
amount of any damages that such Transaction Party Affiliate has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission. No indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent
misrepresentation.
Section 4.80 No Other Obligation to Register.
Except as otherwise expressly provided in this Agreement,
the Company shall have no obligation to the Holders to register the
Conversion Shares under the Securities Act.
Section 4.90 Exchange Act Compliance.
The Company shall maintain registration of the Common Stock
under the Exchange Act and shall timely file all reports required to
be filed thereunder so that the current public information
requirements of paragraph (c) of Rule 144 shall continuously be
complied with.
Section 4.10 Breach of Agreement
No act or omission to act of the Company in contravention of
this Article IV shall be deemed a breach of the Company's obligations
hereunder if (a) such act or omission is cured within 30 days of
receipt of written notice from any Holder or First-Tier Transferee or
(b) in the case of any such act or omission that cannot be cured
within such 30-day period, the Company actively and diligently
attempts to cure such act or omission during such 30-day period and
such act or omission is cured within 30 days thereafter; provided,
however, that this Section 4.10 shall not apply to any failure to file
a Registration Statement within the time limits specified in Sections
4.1(a)(i), (ii) and (iii).
ARTICLE V
STANDSTILL AGREEMENT
Section 5.10 Standstill.
(a) Each UDR Unit Holder hereby agrees that until the fifth
anniversary of the date of this Agreement, such UDR Unit Holder will
not directly or indirectly:
(i) sell or transfer any Securities to any Person,
except (A) as a participant in a merger, consolidation
or other business combination approved by the Board or
(B) in a transaction on the NYSE or other market in
which such Securities are traded, in which the identity
of the buyer or transferee is not known by the seller
or transferor in advance of the transaction, if such
sale or transfer would result in Beneficial Ownership
by the purchaser or transferee, or any Group of which,
to the actual knowledge of such UDR Unit Holder, the
purchaser or transferee is a member, of more than 9.8%
of the number of shares of Common Stock outstanding at
the time of such sale or transfer, determined on a
Fully-Diluted Basis;
(ii) purchase or acquire Securities or shares of Common
Stock if such purchase or acquisition would result in
Beneficial Ownership by all UDR Unit Holders, including
any Group of which, to the actual knowledge of such UDR
Unit Holder, any UDR Unit Holder is a member, of more
than 9.8% of the number of shares of Common Stock
outstanding at the time of such purchase or
acquisition, determined on a Fully-Diluted Basis;
(iii) solicit, propose or effect any business
combination, liquidation or sale of the Company or
similar extraordinary transaction in which the Company
would not be the survivor;
(iv) seek representation on the Company's Board (except
as provided in the Exchange Agreement);
(v) solicit, initiate, encourage or participate in any
"solicitation" of "proxies" or become a "participant"
in any "election contest" (as such terms are defined or
used in Regulation 14A under the Exchange Act,
disregarding clause (iv) of Rule 14a-1(l)(2) and
including an exempt solicitation pursuant to Rule
14a-2(b)(1)); or
(vi) contest the validity or enforceability of this
Section 5.1, except as a consequence of establishing
the occurrence of any of the events specified in
Sections 5.2(b)(ii), (iii), (iv) or (v).
(b) The Preferred Holder hereby agrees that until the fifth
anniversary of the date of this Agreement, the Preferred Holder will
not directly or indirectly:
(i) sell or transfer any Securities to any Person,
except (A) as a participant in a merger, consolidation
or other business combination approved by the Board or
(B) in a transaction on the NYSE or other market in
which such Securities are traded, in which the identity
of the buyer or transferee is not known by the seller
or transferor in advance of the transaction, if such
sale or transfer would result in Beneficial Ownership
by the purchaser or transferee, or any Group of which,
to the actual knowledge of the Preferred Holder, the
purchaser or transferee is a member, of more than 9.8%
of the number of shares of Common Stock outstanding at
the time of such sale or transfer, determined on a
Fully-Diluted Basis;
(ii) purchase or acquire Securities or shares of Common
Stock if such purchase or acquisition would result in
Beneficial Ownership by the Preferred Holder and its
Controlled Affiliates in the aggregate of more than 15%
of the number of shares of Common Stock outstanding at
the time of such purchase or acquisition, determined on
a Fully-Diluted Basis;
(iii) solicit, propose or effect any business
combination, liquidation or sale of the Company or
similar extraordinary transaction in which the Company
would not be the survivor;
(iv) seek representation on the Company's Board (except
as provided in the Merger Agreement);
(v) solicit, initiate, encourage or participate in any
"solicitation" of "proxies" or become a "participant"
in any "election contest" (as such terms are defined or
used in Regulation 14A under the Exchange Act,
disregarding clause (iv) of Rule 14a-1(l)(2) and
including an exempt solicitation pursuant to Rule
14a-2(b)(1)); or
(vi) contest the validity or enforceability of this
Section 5.1, except as a consequence of establishing
the occurrence of any Standstill Termination Event
defined in Section 5.2(b).
Section 5.20 Termination of Certain Restrictions.
(a) The restrictions in Section 5.1(a) shall terminate upon
the occurrence of any of the events specified in Sections 5.2(b)(ii),
(iii), (iv) or (v).
(b) The restrictions in Section 5.1(b) shall terminate upon
any of the following (each a "Standstill Termination Event"):
(i) a quarterly distribution on the Preferred Shares is
in arrears for any quarter for a period exceeding five
days,
(ii) the occurrence of a Change of Control,
(iii) the authorization by the Board (with the director
or directors nominated and serving pursuant to Section
5.9 of the Merger Agreement, if any, voting against) of
the direct or indirect solicitation of offers with
respect to any merger, consolidation, other business
combination, liquidation or sale of the Company or all
or substantially all of its assets or any other similar
extraordinary transaction (any of the foregoing, other
than any transaction in which the Company is the
surviving and acquiring entity and in which (A) the
only other parties to the transaction are subsidiaries
or Controlled Affiliates of the Company or (B) the
business or assets acquired do not, or would not
reasonably be expected to, have a value greater than
50% of the assets of the Company and its subsidiaries,
consolidated, prior to such transaction, a "Covered
Transaction"), it being understood that mere direction
by the Board that the officers of the Company or a
committee of the Board review and report on a proposal
originated by any officer or director of the Company or
by a third party that might result in a solicitation of
offers shall not, without more, be deemed a
"solicitation of offers," provided the director or
directors nominated and serving pursuant to Section 5.9
of the Merger Agreement, if any, receive notice of and
have the opportunity to participate in any meeting of
the Board at which such a direction is made or the
report of the officers of the Company or such committee
of the Board is presented,
(iv) the written submission by any person or Group
other than the Preferred Holder of a proposal to the
Company (including the Board and any agent,
representative or Affiliate of the Company) with
respect to, or otherwise expressing interest in
pursuing, a Covered Transaction, unless, as soon as
practicable after receipt of any such proposal, the
Board determines that such proposal is not in the best
interests of the Company and its shareholders and
continues to reject such proposal as a result of such
determination,
(v) in connection with any actual or proposed Covered
Transaction, the termination of any shareholder rights
plan or amendment of the articles of incorporation or
bylaws of the Company to delete staggered terms of
directors, supermajority voting of the Company's
shareholders, "excess share" provisions, or other
similar provisions which would reasonably be expected
to impede the consummation of such Covered Transaction,
(vi) any breach of Section 5.9 of the Merger Agreement,
(vii) the initiation by the Company or any of its
Affiliates of any action, suit or other legal
proceeding against the Preferred Holder, any of
its Affiliates or any of their respective officers or
directors with respect to any matter unrelated to the
express terms of this Agreement and the related documents
and the transactions contemplated thereby, unless such
action, suit or legal proceeding is authorized by the Board
at a meeting of which the director or directors nominated
and serving pursuant to Section 5.9 of the Merger Agreement,
if any, receive notice and in which they have the
opportunity to participate, provided that if there shall be
a final judgment on the merits in favor of the Preferred
Holder or such Affiliate in any such action, suit or legal
proceeding that is so authorized by the Board, a Standstill
Termination Event shall exist even though such judgment may
be subject to further appeal,
(viii) the distribution by the Preferred Holder of all
of its Preferred Shares and Conversion Shares pursuant
to Section 3.1(c), provided that such Standstill
Termination Event shall not affect any agreement
entered into by a Permitted Preferred Share Transferee
pursuant to Section 3.1(c)(ii), and
(ix) the date on which the Preferred Holder ceases
(otherwise than as a result of a distribution of
Preferred Shares and Conversion Shares pursuant to
Section 3.1(c)) to be the Beneficial Owner of
Securities having an aggregate market value of more
than 5% of Average Market Capitalization. For purposes
of this Section 5.2(b) (ix), the "market value" of
Conversion Shares shall be determined by reference to
the closing sale price of the Common Stock on the day
preceding the determination date, and the "market
value" of Preferred Shares shall be the Series D
Redemption Price of the Preferred Shares provided in
the Company's Articles of Incorporation on the
determination date.
ARTICLE VI
GENERAL PROVISIONS
Section 6.10 Notices.
All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be
deemed given if delivered personally, sent by overnight courier
(providing proof of delivery) to the parties or sent by telecopy
(providing confirmation of transmission) at the following addresses or
telecopy numbers (or at such other address or telecopy number for a
party as shall be specified by like notice), and further provided that
in case of directions to amend the Registration Statement pursuant to
Article IV, the Holder must confirm such notice in writing by
overnight express delivery with confirmation of receipt:
(a) if to the Company, to
UNITED DOMINION REALTY TRUST, INC.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxx X. XxXxxx, President
Fax: (000) 000-0000
with a copy to:
UNITED DOMINION REALTY TRUST, INC.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxxxxx X. Surface, Senior Vice President
and General Counsel
Fax: (000) 000-0000
and
HUNTON & XXXXXXXX
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxxxxxxx, III
Fax: (000) 000-0000
(b) if to AAC, to
AMERICAN APARTMENT COMMUNITIES II, INC.
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, Chief Executive Officer
Fax: (000) 000-0000
with copies to:
AMERICAN APARTMENT COMMUNITIES II, INC.
00 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq., General Counsel
Fax: (000) 000-0000
and
XXXXXX, XXXX & XXXXXXXX LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
(c) if to the Preferred Holder, to:
LF STRATEGIC REALTY INVESTORS, L.P.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Managing Director
Fax: (000) 000-0000
with a copy to:
Lazard Freres Real Estate Investors, LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxxxx, Vice President & General Counsel
Fax: (000) 000-0000
(d) if to Schnitzer, to
SCHNITZER INVESTMENT CORP.
Schnitzer Investment Corp.
0000 XX Xxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx, President & Chief Executive Officer
Fax: (000) 000-0000
(e) if to AACOP, to
AMERICAN APARTMENT COMMUNITIES OPERATING
PARTNERSHIP, L.P.
00 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq., General Counsel
Fax: (000) 000-0000
with a copy to:
XXXXXX, XXXX & XXXXXXXX LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
(f) if to AACM, to
AAC MANAGEMENT LLC
00 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq., General Counsel
Fax: (000) 000-0000
with a copy to:
XXXXXX, XXXX & XXXXXXXX LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
(g) if to AAC III, to
AMERICAN APARTMENT COMMUNITIES III, L.P.
00 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq., General Counsel
Fax: (000) 000-0000
with a copy to:
XXXXXX, XXXX & XXXXXXXX LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
In addition to the manner of notice permitted above, notices given
pursuant to Sections 4.1, 4.6 and 4.7 hereof may be effected
telephonically and confirmed in writing thereafter in the manner
described above.
Section 6.2 Successors and Assigns.
Except as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Except as otherwise provided
herein, this Agreement may not be assigned by any Holder and any
attempted assignment hereof by any Holder will be void and of no
effect and shall terminate all obligations of the Company hereunder. A
purchaser or transferee of any Securities shall not solely by reason
of such purchase or transfer be deemed a successor or assign of the
seller or transferor, and no Person who purchases Securities from any
Holder, Transaction Party Affiliate or First-
Tier Transferee in a transaction complying with the applicable
provisions of Rule 144 or Rule 145 or in a transaction effected after
a Registration Statement with respect to such Securities has become
effective shall be bound by any provision of this Agreement.
Section 6.3 Counterparts.
This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when
so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 6.4 Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, regardless of the
laws that might otherwise govern under applicable principles of
conflict of laws of such State.
Section 6.5 Severability.
In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason,
the validity, legality and unenforceable of any such provision in
every other respect and of the remaining provisions contained herein
shall not be in any way impaired thereby, it being intended that all
of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
Section 6.6 Entire Agreement; Amendment; Waiver.
This Agreement is intended by the parties as a final
expression of their agreement and intended to be the complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those
set forth or referred to herein, with respect to such subject matter.
This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter. No amendment
or waiver of any provision hereof shall be effective unless in writing
signed by each party against whom enforcement of such amendment or
waiver is sought. No waiver of any provision of this Agreement or a
breach of any such provision shall be construed as a waiver of any
other provision hereof or a breach of such provision or a subsequent
breach of the same or any other provision.
Section 6.7 Interpretation; Absence of Presumption.
For the purposes hereof, (i) words in the singular shall be
held to include the plural and vice versa and words of one gender
shall be held to include the other gender as the context requires,
(ii) the terms "hereof", "herein" and "herewith", and words of similar
import shall,
unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement, and
Article and Section references are to the Articles and Sections of
this Agreement unless otherwise specified, (iii) the word "including"
and words of similar import when used in this Agreement shall mean
"including without limitation," unless the context otherwise requires
or unless otherwise specified, (iv) the word "or" shall not be
exclusive and (v) provisions shall apply, when appropriate, to
successive events and transactions. This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to
be drafted.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
UNITED DOMINION REALTY TRUST, INC.
By:
----------------------------------
Name:
Title:
UNITED DOMINION REALTY, L.P.
By: United Dominion Realty Trust, Inc.,
General Partner
By:
----------------------------------
Name:
Title:
AMERICAN APARTMENT COMMUNITIES
II, INC.
By:
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
AMERICAN APARTMENT COMMUNITIES
III, L.P.
By American Apartment Communities III, Inc.,
General Partner
By:
----------------------------------
Name:
Title:
SCHNITZER INVESTMENT CORP.
By:
----------------------------------
Name:
Title:
LF STRATEGIC REALTY INVESTORS, L.P.
By:
----------------------------------
Name:
Title:
AMERICAN APARTMENT COMMUNITIES
OPERATING PARTNERSHIP, L.P.
By American Apartment Communities, Inc.,
General Partner
By:
----------------------------------
Name:
Title:
AAC MANAGEMENT LLC
BY:
----------------------------------
Name:
Title:
