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EXECUTION COPY
WAIVER AND RELEASE AGREEMENT
WAIVER AND RELEASE AGREEMENT, dated as of August 14, 2001 (this
"Agreement"), by and between United Dominion Realty Trust, Inc., a Virginia
corporation (the "Company"), and LF Strategic Realty Investors L.P., a Delaware
limited partnership (the "Shareholder").
WHEREAS, the Shareholder currently owns 8,000,000 shares of Series D
Cumulative Convertible Preferred Stock of the Company (the "Preferred Stock"),
and desires to sell all of the Preferred Stock to Security Capital Preferred
Growth Incorporated, a Maryland corporation (the "Purchaser");
WHEREAS, the Company, the Shareholder and certain other parties, entered
into an Investment Agreement, effective as of December 7, 1998 (the "Investment
Agreement"), which provides, among other things, certain restrictions on the
Shareholder's ability to transfer the Preferred Stock and an obligation on the
part of the Company to file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission with respect to the
shares of common stock of the Company issuable upon conversion of the Preferred
Stock;
WHEREAS, the Company has agreed to waive all transfer restrictions
related to the Preferred Stock with respect to the sale of the Preferred Stock
to the Purchaser, including those under the Investment Agreement; and
WHEREAS, the Shareholder has agreed to release the Company from any and
all liability related to the Company's failure to timely file the Registration
Statement.
NOW, THEREFORE, in consideration of the foregoing and the covenants of
the parties set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, subject to the terms
and conditions set forth herein, the parties hereby agree as follows:
Section 1. Transfer Restrictions. The Company hereby waives any and
all transfer restrictions on the Preferred Stock, including the transfer
restrictions contained in Sections 3.1 and 5.1 of the Investment Agreement,
solely with respect to the sale to the Purchaser of the Preferred Stock.
Section 2. Release. The Shareholder, for itself and on behalf of
its successors and assigns, hereby releases, remises and forever discharges the
Company and its affiliates, officers, directors, shareholders, employees,
agents, personal representatives, successors and assigns from all manner of
actions, causes of action, suits, claims and demands, whatsoever, related to the
Company's failure to timely file the Registration Statement and its method of
calculating and paying dividends with respect to the Preferred Stock for periods
prior to, and including, the period ended July 31, 2001.
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Section 3. Expenses. Shareholder shall pay the Company's reasonable
attorneys' fees in connection with the consummation of the transactions
contemplated hereby.
Section 4. Indemnity. Shareholder shall indemnify and hold the
Company harmless against all claims, demands, actions, liabilities, losses,
damages, lawsuits and other proceedings at law or in equity, judgments, awards,
commissions, fees, costs and expenses (including, without limitation, attorneys'
fees and expenses), of every kind and nature incurred by the Company (a) in
connection with any breach of any of the representations and warranties made by
the Shareholder in this Agreement, (b) arising out of any breach or alleged
breach by Shareholder of the Purchase Agreement between Shareholder and
Purchaser and (c) arising primarily from any dispute between the Shareholder and
any third party (other than the Company) relating to the transactions
contemplated by this Agreement, provided, that the Company shall not be entitled
to indemnity under this paragraph for any matters relating primarily to its
decision to grant the waiver referred to in Section 1 of this Agreement.
Section 5. Representations and Warranties of the Shareholder.
(a) Authorization. Shareholder has all requisite power and
authority to enter into this Agreement. This Agreement and the transactions
contemplated hereby have been duly authorized by all necessary partnership
action on the part of Shareholder and its partners and no further action is
required on the part of the Shareholder to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Shareholder and is the valid and binding
obligation of the Shareholder, enforceable against the Shareholder in accordance
with its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the rights of
creditors generally and (b) principles of equity, whether considered at law or
in equity.
(b) No Violation or Conflict. The execution, delivery and
performance by the Shareholder of this Agreement and the consummation of the
transactions contemplated hereby do not and will not conflict with or violate
(i) the certificate of limited partnership or partnership agreement of the
Shareholder, (ii) any law, rule, regulation, judgment, order or decree binding
on the Shareholder or (iii) any other contract binding on the Shareholder.
Section 6. Representations and Warranties of the Company.
(a) Authorization. Company has all requisite corporate power
and authority to enter into this Agreement. This Agreement and the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company and no further action is required on the part of the
Company to authorize this Agreement and the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the Company
and is the valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the rights of creditors generally and (b) principles of equity,
whether considered at law or in equity.
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(b) No Violation or Conflict. The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby do not and will not conflict with or violate
(i) the Articles of Incorporation of the Company, (ii) any law, rule,
regulation, judgment, order or decree binding on the Company or (iii) any other
contract binding on the Company.
Section 7. Public Announcements; Confidentiality. Each party hereto
shall keep confidential, and shall cause its directors, officers, employees,
agents, representatives and advisors to keep confidential, any information
concerning this transaction. Neither party hereto shall issue or make any
reports, statements or releases to the public or generally with respect to this
Agreement or the transactions contemplated hereby without the prior written
approval of the other party, which consent shall not be unreasonably withheld or
delayed. Notwithstanding anything to the contrary contained herein, (a) the
Shareholder shall be permitted to make disclosures regarding this transaction to
its limited and general partners and (b) each party shall be permitted to make
disclosures or announcements regarding this transaction (i) to the extent
required by statute, rule (including New York Stock Exchange rules and rules and
regulations of the Securities and Exchange Commission), regulation or judicial
process, or (ii) to the extent such information is generally available to the
public.
Section 8. Entire Agreement. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subject matter hereof.
Section 9. Amendment. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby.
Section 10. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be enforceable against the parties
actually executing such counterparts, and all of which together shall constitute
one instrument.
Section 11. Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision.
Section 12. Section Titles. Section titles are for descriptive
purposes only and shall not control or alter the meaning of this Agreement as
set forth in the text.
Section 13. Effective Time. The waiver granted under Section 1 of
this Agreement shall be effective immediately prior to, and the release granted
under Section 2 of this Agreement shall be effective upon, the closing of the
sale of the Preferred Stock to the Purchaser, provided that the Company shall
have received at or prior to such closing an executed Investment Agreement from
the Purchaser in the form attached as Exhibit A, and provided, further, that
such closing shall have occurred within 30 days of the date of this Agreement.
Section 14. Successors and Assigns. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns.
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Section 15. Governing Law. This Agreement shall be governed in all
respects by the laws of the State of New York.
[Signature Page Follows.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
UNITED DOMINION REALTY TRUST, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: President and Chief Executive Officer
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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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