EXHIBIT 10(vii)
UNITED DOMINION REALTY TRUST, INC.
Medium-Term Notes
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
July 8, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
ALEX. BROWN & SONS INCORPORATED
135 E. Baltimore Street
Baltimore, Maryland 21202
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, New York 10260
NATIONSBANC CAPITAL MARKETS, INC.
100 North Tyron Street
Charlotte, North Carolina 28255
Ladies and Gentlemen:
United Dominion Realty Trust, Inc., a Virginia corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Alex. Brown & Sons Incorporated, Goldman,
Sachs & Co., J.P. Morgan Securities Inc. and NationsBanc Capital Markets, Inc.
(each, an "Agent", and collectively, the "Agents") with respect to the issue and
sale by the Company of its Medium-Term Notes Due Nine Months or
More From Date of Issue (the "Notes"). The Notes are to be issued pursuant to an
Indenture, dated as of November 1, 1995, as amended, supplemented or modified
from time to time (the "Indenture"), between the Company and First Union
National Bank of Virginia, as trustee (the "Trustee"). As of the date hereof,
the Company has authorized the issuance and sale of up to U.S. $200,000,000
aggregate initial offering price (or its equivalent, based upon the applicable
exchange rate at the time of issuance, in such foreign or composite currencies
as the Company shall designate at the time of issuance) of Notes to or through
the Agents pursuant to the terms of this Agreement. It is understood, however,
that the Company may from time to time authorize the issuance of additional
Notes and that such additional Notes may be sold to or through the Agents
pursuant to the terms of this Agreement, all as though the issuance of such
Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company to
one or more Agents as principal for resale to investors and other purchasers and
for the sale of Notes by the Company directly to investors (as may from time to
time be agreed to by the Company and the applicable Agent), in which case such
Agent will act as an agent of the Company in soliciting purchases of the Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-64275) (which as
declared effective also constitutes post-effective amendment No. 1 to
registration statement No. 33-55159) for the registration of securities
(including the Notes) under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with Rule 415 of
the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"), and the Company has filed such post-effective amendments thereto
as may have been required prior to the Company's acceptance of an offer to
purchase Notes. Such registration statement (as amended, if applicable) has been
declared effective by the Commission. Such registration statement (as amended,
if applicable), including the information, if any, deemed to be a part thereof
pursuant to Rule 434 of the 1933 Act Regulations, on the one hand, and the
prospectus constituting a part thereof and each prospectus supplement relating
to the offering of Notes first provided to the Agents for use (whether or not
such prospectus supplement is required to be filed by the Company pursuant to
Rule 424(b) of the 1933 Act Regulations) (the "Prospectus Supplement"), on the
other hand, including in each case all documents incorporated therein by
reference, as from time to time amended or supplemented prior to the Company's
acceptance of an offer to purchase Notes pursuant to the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or otherwise, are
referred to herein as the "Registration Statement" and the "Prospectus",
respectively; provided, however, that a Prospectus Supplement shall be deemed to
have supplemented the Prospectus only with respect to the offering of Notes to
which it relates. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and
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include, without limitation, any document filed under the 1934 Act which is or
is deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be. If the Company elects to rely on Rule 434 under
the 1933 Act Regulations, all references to "Prospectus" shall be deemed to
include, without limitation, the form of prospectus and the abbreviated term
sheet, taken together, provided to the Agents by the Company in reliance on Rule
434 under the 1933 Act (the "Rule 434 Prospectus"). If the Company files a
registration statement to register a portion of the securities and relies on
Rule 462(b) for such registration statement to become effective upon filing with
the Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" shall be deemed to include the Rule 462 Registration
Statement.
SECTION 1. Appointment as Agents.
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly on
its own behalf, the Company hereby agrees that Notes will be sold exclusively to
or through the Agents. The Company agrees that it will not appoint any other
agents to act on its behalf, or to assist it, in the placement of the Notes.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of purchases of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the aggregate
initial offering price of Notes registered pursuant to the Registration
Statement. The Agents shall have no responsibility for maintaining records with
respect to the aggregate initial offering price of Notes sold, or of otherwise
monitoring the availability of Notes for sale, under the Registration Statement.
(c) Purchases as Principal. The Agents shall not have any obligation to
purchase Notes from the Company as principal, but one or more Agents may agree
from time to time to purchase Notes as principal for resale to investors and
other purchasers determined by such Agent or Agents. Any such purchase of Notes
by an Agent as principal shall be made in accordance with Section 3(a) hereof.
(d) Solicitations as Agents. If agreed upon by an Agent and the
Company, such Agent, acting solely as agent for the Company and not as
principal, will solicit purchases of the Notes. Such Agent will communicate to
the Company, orally, each offer to purchase Notes solicited by it on an agency
basis, other than those offers rejected by such Agent. Such Agent shall have the
right, in its discretion reasonably exercised, to reject any proposed purchase
of Notes, as a whole or in part, and any such rejection shall not be deemed a
breach of its agreement contained herein. The Company may accept or reject any
proposed purchase of Notes, in whole or in part. Such Agent shall make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by it and accepted by
the Company. Such Agent shall not have any liability to the Company in the event
that any such purchase is not consummated for any reason. If the Company shall
default on its obligation to deliver Notes to a purchaser whose offer it has
accepted, the Company shall (i) hold such Agent harmless against any loss, claim
or damage arising from or as a result of
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such default by the Company and (ii) pay to such Agent any commission to which
it would otherwise be entitled absent such default.
(e) Reliance. The Company and the Agents agree that any Notes purchased
by one or more Agents as principal shall be purchased, and any Notes the
placement of which an Agent arranges as agent shall be placed by such Agent, in
reliance on the representations, warranties, covenants and agreements of the
Company contained herein and on the terms and conditions and in the manner
provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to such Agent as principal or through such Agent as
agent), as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to the
Agent as principal being hereafter referred to as a "Settlement Date"), and as
of any time that the Registration Statement or the Prospectus shall be amended
or supplemented or there is filed with the Commission any document incorporated
by reference into the Prospectus (each of the times referenced above being
referred to herein as a "Representation Date"), as follows:
(i) Due Incorporation and Qualification. The Company
has been duly organized and is validly existing as a corporation in
good standing under the laws of the Commonwealth of Virginia, with full
power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus; and the Company is
duly qualified to transact business in all jurisdictions in which the
conduct of its business requires such qualification except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company.
(ii) Subsidiaries. Each subsidiary of the Company has
been duly organized and is validly existing as a corporation, limited
liability company or limited partnership in good standing under the
laws of the jurisdiction of its incorporation or organization, with
corporate power and authority or power and authority as a limited
liability company or limited partnership to own, lease and operate its
properties and conduct its business as described in the Prospectus and
is duly qualified to transact business in all jurisdictions in which
the conduct of its business requires such qualification except where
the failure to so qualify would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of such subsidiary; all of the issued and
outstanding capital stock of each such corporate subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and the Company
and one such corporate subsidiary are the only members or general
partners of the Company's limited liability company or limited
partnership subsidiaries, as applicable, and own the entire
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membership or general partnership interest in each such subsidiary free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(iii) Registration Statement and Prospectus. The
Registration Statement and the Prospectus, at the time the Registration
Statement became effective, complied, and as of each Representation
Date will comply, in all material respects with the requirements of the
1933 Act and 1933 Act Regulations; the Registration Statement, at the
time it became effective, did not, and at each time thereafter at which
any amendment to the Registration Statement becomes effective or any
Annual Report on Form 10-K is filed by the Company with the Commission
and as of each Representation Date, will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(iv) Incorporated Documents. The documents incorporated
by reference in the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the 1933 Act or the 1934 Act,
as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the 1933 Act or the 1934 Act, as applicable, and
the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(v) Accountants. The accountants who certified the
financial statements included or incorporated by reference in the
Prospectus are independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The financial statements and
any supporting schedules of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and the
consolidated results of their operations for the periods specified;
except as stated therein, said financial statements have been prepared
in conformity with U.S. generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the information required to be stated
therein. Pro forma financial information (if applicable) included or
incorporated by reference in the Prospectus has been prepared in
accordance with the applicable requirements of the 1933 Act, the 1933
Act Regulations and AICPA guidelines with respect to pro forma
financial information and includes all adjustments necessary to present
fairly the pro forma financial position of the respective
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entity or entities presented therein at the respective dates indicated
and the results of their operations for the respective periods
specified.
(vii) Authorization and Validity of this Agreement, the
Indenture and the Notes. This Agreement has been duly authorized,
executed and delivered by the Company and, upon execution and delivery
by the Agents, will be a valid and legally binding agreement of the
Company; the Indenture has been duly authorized, executed and delivered
by the Company and, upon execution and delivery by the Trustee, will be
a valid and legally binding agreement of the Company enforceable in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting enforcement of creditors' rights generally or
by general equity principles, and except further as enforcement thereof
may be limited by (1) requirements that a claim with respect to any
Notes payable other than in U.S. dollars (or a foreign currency or
composite currency judgment in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law or (2) governmental authority to limit,
delay or prohibit the making of payments outside the United States; the
Notes have been duly and validly authorized for issuance, offer and
sale pursuant to this Agreement and, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor, the Notes will
constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of
creditors' rights generally or by general equity principles, and except
further as enforcement thereof may be limited by (1) requirements that
a claim with respect to any Notes payable other than in U.S. dollars
(or a foreign currency or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or (2)
governmental authority to limit, delay or prohibit the making of
payments outside the United States; the Notes and the Indenture will be
substantially in the form heretofore delivered to the Agents and
conform in all material respects to all statements relating thereto
contained in the Prospectus; and each holder of Notes will be entitled
to the benefits of the Indenture.
(viii) Material Changes or Material Transactions. Since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change or development
involving a prospective material adverse change in or affecting the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not occurring in the ordinary course of
business and (B) there have been no transactions or acquisitions
entered into by the Company or any of its subsidiaries other than those
arising in the ordinary course of business.
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(ix) No Defaults. Neither the Company nor any of its
subsidiaries is in violation of its Articles of Incorporation or
By-Laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease (other than as
disclosed in the Prospectus) or other instrument to which the Company
or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or
any of its subsidiaries is subject and which default is of material
significance in respect of the business or financial condition of the
Company and its subsidiaries considered as one enterprise; and the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and thereunder
have been duly authorized by all necessary corporate action on the part
of the Company, and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be
bound, or to which any property or assets of the Company or any of its
subsidiaries is subject, or result in any violation of the Articles of
Incorporation or By-Laws of the Company or any law, administrative
regulation or administrative or court decree.
(x) Regulatory Approvals. No authorization, approval or
consent of any governmental authority or agency is necessary in
connection with the consummation by the Company of the transactions
contemplated by this Agreement or in connection with the sale of Notes
hereunder, except such as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws ("Blue Sky").
(xi) Legal Proceedings. There is no action, suit or
proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries which is
required to be disclosed in the Prospectus (other than as disclosed
therein) or which might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and adversely
affect the consummation of this Agreement or the transactions
contemplated herein; all pending legal or governmental proceedings to
which the Company or any of its subsidiaries is a party or of which any
of their respective property is the subject which are not described in
the Prospectus, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material; and there are
no contracts or documents of the Company or any of its subsidiaries
which would be required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not
been filed as exhibits to the Registration Statement.
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(xii) Licenses; Trademarks. The Company and each of its
subsidiaries hold all material licenses, certificates and permits from
governmental authorities which are necessary to the conduct of their
respective businesses; and neither the Company nor any of its
subsidiaries has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the
business of the Company or any of its subsidiaries.
(xiii) Marketable Title; Leasehold Estates. The Company
and its subsidiaries have good and marketable title to, or valid and
enforceable leasehold estates in, all items of real and personal
property referred to in the Prospectus as owned or leased by them, in
each case free and clear of all liens, encumbrances, claims, security
interests and defects, other than those referred to in the Prospectus
or which are not material in amount. Each lease of real property by the
Company or any of its subsidiaries as lessor requiring annual lease
payments in excess of $100,000 is the legal, valid and binding
obligation of the lessee in accordance with its terms (except that the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought and to the Bankruptcy Act) and the rents which at present have
remained due and unpaid for more than 30 days are not payable under
leases such that, were no further rental payments to be received under
such leases, the financial condition or results of operations of the
Company and its subsidiaries would be materially adversely affected
thereby. The Company has no reason to believe that the lessee under any
lease (excluding leases for which rent payments due for the remainder
of such lease are less than $500,000) calling for annual lease payments
in excess of $500,000 is not financially capable of performing its
obligations thereunder.
(xiv) Hazardous Materials. The Company has no knowledge
of (a) the unlawful presence of any hazardous substances, hazardous
materials, toxic substances or waste materials (collectively,
"Hazardous Materials") on any of the properties owned by it or any of
its subsidiaries, or of (b) any unlawful spills, releases, discharges
or disposal of Hazardous Materials that have occurred or are presently
occurring off such properties as a result of any construction on or
operation and use of such properties which presence or occurrence would
materially adversely affect the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company or
any of its subsidiaries. In connection with the construction on or
operation and use of the properties owned by the Company or any of its
subsidiaries, the Company represents that it has no knowledge of any
material failure to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and
judicial orders relating to the generation, recycling, reuse, sale,
storage, handling, transport and disposal of any Hazardous Materials.
(xv) Tax Filings. The Company has filed all Federal,
local and foreign income tax returns which have been required to be
filed and has paid all taxes indicated by said returns and all
assessments received by it to the extent that such taxes have become
due and are not being contested in good faith.
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(xvi) Statements in Prospectus. The statements set forth
in the Prospectus under the captions "Description of Debt Securities"
and "Description of Notes", insofar as they purport to constitute a
summary of the terms of the Notes, and under the captions "Certain
United States Federal Income Tax Considerations" and "Plan of
Distribution", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair.
(xvii) REIT Qualification. With respect to all tax periods
regarding which the Internal Revenue Service is or will be entitled to
assert any claim, the Company has met the requirements for
qualification as a real estate investment trust under Sections 856
through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Company's present and contemplated operations, assets
and income continue to meet such requirements.
(xviii) Use of Form S-3. The conditions for use of
registration statements on Form S-3 set forth in the General
Instructions on Form S-3 have been satisfied and the Company is
entitled to use such form for the transaction contemplated herein.
(xix) Investment Company Act. The Company is not and,
after giving effect to the offering and sale of the Notes as
contemplated herein, will not be an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Commodity Exchange Act. The Notes, when issued,
authenticated and delivered pursuant to the provisions of this
Agreement and the Indenture, will be excluded or exempted under the
provisions of the Commodity Exchange Act.
(xxi) Doing Business with Cuba. Neither the Company nor
any of its affiliates does business with the government of Cuba or with
any person or affiliate located in Cuba within the meaning of Section
517.075, Florida Statutes.
(xxii) Ratings. The Notes are rated Baa1 by Moody's
Investors Service, Inc. and BBB+ by Standard & Poor's Ratings Group.
(b) Additional Certifications. Any certificate signed by any director
or officer of the Company and delivered to one or more Agents or to counsel for
the Agents in connection with an offering of Notes to one or more Agents as
principal or through an Agent as agent shall be deemed a representation and
warranty by the Company to such Agent or Agents as to the matters covered
thereby on the date of such certificate and at each Representation Date
subsequent thereto.
SECTION 3. Purchases as Principal; Solicitations as Agent.
(a) Purchases as Principal. Unless otherwise agreed by an Agent
and the Company, Notes shall be purchased by one or more Agents as principal in
accordance with terms agreed
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upon by such Agent or Agents and the Company (which terms, unless otherwise
agreed, shall, to the extent applicable, include those terms specified in
Exhibit A hereto and be agreed upon orally, with written confirmation prepared
by such Agent or Agents and mailed to the Company). An Agent's commitment to
purchase Notes as principal shall be deemed to have been made on the basis of
the representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Unless the context
otherwise requires, references herein to "this Agreement" shall include the
applicable agreement of one or more Agents to purchase Notes from the Company as
principal. Each purchase of Notes, unless otherwise agreed, shall be at a
discount from the principal amount of each such Note equivalent to the
applicable commission set forth in Schedule A hereto. The Agents may engage the
services of any other broker or dealer in connection with the resale of the
Notes purchased by them as principal and may allow all or any portion of the
discount received in connection with such purchases from the Company to such
brokers and dealers. At the time of each purchase of Notes by one or more Agents
as principal, such Agent or Agents shall specify the requirements for the
stand-off agreement, officers' certificate, opinions of counsel and comfort
letter pursuant to Sections 4(k), 7(b), 7(c) and 7(d) hereof.
(b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers to purchase the Notes
upon the terms and conditions set forth in the Prospectus. The Agents are not
authorized to appoint sub-agents with respect to Notes sold through them as
agent. All Notes sold through an Agent as agent will be sold at 100% of their
principal amount unless otherwise agreed to by the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through an Agent, as agent, commencing at
any time for any period of time or permanently. As soon as practicable after
receipt of instructions from the Company, such Agent will suspend solicitation
of purchases from the Company until such time as the Company has advised such
Agent that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as set
forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes (as applicable) specified in
Exhibit A hereto shall be agreed upon by the Company and the applicable Agent or
Agents and specified in a pricing supplement to the Prospectus (each, a "Pricing
Supplement") to be prepared in connection with each sale of Notes. Except as may
be otherwise specified in the applicable Pricing Supplement, the Notes will be
issued in denominations of U.S. $1,000 or any larger amount that is an integral
multiple of U.S. $1,000. Administrative procedures with respect to the sale of
Notes shall be agreed upon from time to time by the Company, the Agents and the
Trustee (the "Procedures"). The Agents and the Company agree to perform, and the
Company agrees to cause the Trustee to
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agree to perform, their respective duties and obligations specifically provided
to be performed by them in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants with the Agents as follows:
(a) Notice of Certain Events. The Company will notify the Agents
immediately, and confirm such notice in writing, of (i) the effectiveness of any
amendment to the Registration Statement, (ii) the transmittal to the Commission
for filing of any amendment or supplement to the Prospectus or any document to
be filed pursuant to the 1934 Act (other than any amendment, supplement or
document relating solely to securities other than the Notes), (iii) the receipt
of any comments from the Commission with respect to the Registration Statement
or the Prospectus, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose and (vi) any change in the rating assigned by
any nationally recognized statistical rating organization to any debt securities
of the Company or the public announcement by any nationally recognized
statistical rating organization that it has under surveillance or review, with
possible negative implications, its rating of any debt securities of the
Company. The Company will make every reasonable effort to prevent the issuance
of any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) Notice of Certain Proposed Filings. The Company will give the
Agents advance notice of its intention to file or prepare any additional
registration statement with respect to the registration of additional Notes, any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus (other than an amendment or supplement providing solely for a change
in the interest rate or formula applicable to the Notes or relating solely to
the issuance and/or offering of securities other than the Notes), whether by the
filing of documents pursuant to the 1934 Act or the 1933 Act or otherwise, and
will furnish to the Agents copies of any such amendment or supplement or other
documents proposed to be filed or used a reasonable time in advance of such
proposed filing or use, as the case may be, and will not file any such amendment
or supplement or other documents in a form to which the Agents or counsel for
the Agents shall reasonably object.
(c) Copies of the Registration Statement and the Prospectus. The
Company will deliver to the Agents as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as the Agents reasonably
request. The Company will furnish to the Agents as many copies of the Prospectus
(as amended or supplemented) as the Agents reasonably request so long as the
Agents are required to deliver a Prospectus in connection with sales or
solicitations of offers to purchase the Notes.
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(d) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold to or through one or more Agents pursuant to
this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents and will file such Pricing Supplement pursuant
to Rule 424(b)(3) under the 1933 Act not later than the close of business of the
Commission on the fifth business day after the date on which such Pricing
Supplement is first used.
(e) Prospectus Revisions -- Material Changes. Except as otherwise
provided in subsection (l) of this Section, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which it
is necessary, in the opinion of counsel for the Agents or counsel for the
Company, to amend or supplement the Prospectus in order that the Prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time the Prospectus is delivered to a
purchaser, or if it shall be necessary, in the opinion of either such counsel,
to amend or supplement the Registration Statement or the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company shall give immediate notice, confirmed in writing, to the Agents to
cease the solicitation of offers to purchase the Notes in their capacity as
agents and to cease sales of any Notes they may then own as principal, and the
Company will promptly amend the Registration Statement and the Prospectus,
whether by filing documents pursuant to the 1934 Act or the 1933 Act or
otherwise, as may be necessary to correct such untrue statement or omission or
to make the Registration Statement and Prospectus comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (l) of this Section, on or prior to the date on
which there shall be released to the general public interim financial statement
information related to the Company with respect to each of the first three
quarters of any fiscal year or preliminary financial statement information with
respect to any fiscal year, the Company shall furnish such information to the
Agents, confirmed in writing, and shall cause the Prospectus to be amended or
supplemented, whether by filing documents pursuant to the 1934 Act or the 1933
Act or otherwise, to include or incorporate by reference financial information
with respect thereto and corresponding information for the comparable period of
the preceding fiscal year, as well as such other information and explanations as
shall be necessary for an understanding thereof or as shall be required by the
1933 Act or the 1933 Act Regulations.
(g) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (l) of this Section, on or prior to the date on
which there shall be released to the general public financial information
included in or derived from the audited financial statements of the Company for
the preceding fiscal year, the Company shall furnish such information to the
Agents, confirmed in writing, and shall cause the Registration Statement and the
Prospectus to be amended, whether by the filing of documents pursuant to the
1934 Act or the 1933 Act or otherwise, to include or incorporate by reference
such audited financial statements and the report or reports, and consent or
consents to such inclusion or incorporation by reference, of the independent
accountants with respect thereto, as well as such other information
12
and explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act Regulations.
(h) Earnings Statements. The Company will make generally available to
its security holders as soon as practicable, but not later than 90 days after
the close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations) covering
each twelve month period beginning, in each case, not later than the first day
of the Company's fiscal quarter next following the "effective date" (as defined
in such Rule 158) of the Registration Statement with respect to each sale of
Notes.
(i) Blue Sky Qualifications. The Company will endeavor, in cooperation
with the Agents, to qualify the Notes for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States as
the Agents may designate, and will maintain such qualifications in effect for as
long as may be required for the distribution of the Notes; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation in any jurisdiction in which
it is not so qualified. The Company will file such statements and reports as may
be required by the laws of each jurisdiction in which the Notes have been
qualified as above provided. The Company will promptly advise the Agents of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any such state or jurisdiction or the
initiating or threatening of any proceeding for such purpose.
(j) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act in
connection with sales of the Notes, will file all documents required to be filed
with the Commission pursuant to Sections 13, 14 or 15(d) of the 1934 Act within
the time periods prescribed by the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations").
(k) Stand-Off Agreement. If specified by the applicable Agent or Agents
in connection with a purchase of Notes from the Company as principal, between
the date of the agreement to purchase such Notes and the Settlement Date with
respect to such purchase, the Company will not, without the prior written
consent of such Agent or Agents, offer or sell, grant any option for the sale
of, or enter into any agreement to sell, any debt securities of the Company
(other than (i) the Notes that are to be sold pursuant to such agreement, (ii)
commercial paper in the ordinary course of business, (iii) refinancing of debt
securities issued in private placements, (iv) assumptions of mortgages on
acquired properties and (v) offerings of tax-exempt bonds).
(l) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (e), (f) or (g) of this
Section during any period from the time (i) the Agents shall have suspended
solicitation of purchases of the Notes in their capacity as agents pursuant to a
request from the Company and (ii) no Agent shall then hold any Notes purchased
as principal pursuant hereto, until the time the Company shall determine that
solicitation of purchases of the Notes should be resumed or an Agent shall
subsequently purchase Notes from the Company as principal.
13
(m) Continued REIT Qualification. The Company will continue to
elect to qualify as a "real estate investment trust" under the Code and will use
its best efforts to continue to qualify as a "real estate investment trust."
SECTION 5. Conditions of Obligations.
The obligations of the Agents to purchase Notes from the Company as
principal and to solicit offers to purchase Notes as agent of the Company, and
the obligations of any purchasers of Notes sold through an Agent as agent, will
be subject to the accuracy of the representations and warranties on the part of
the Company herein and to the accuracy of the statements of the Company's
directors or officers made in any certificate furnished pursuant to the
provisions hereof, to the performance and observance by the Company of all its
covenants and agreements herein contained and to the following additional
conditions precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and in form
and substance satisfactory to the Agents:
(1) Opinion of Company Counsel. The favorable opinion of
Hunton & Williams, counsel to the Company, to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation and in good standing under
the laws of the Commonwealth of Virginia, with corporate power
and authority to own its properties and conduct its business
as described in the Prospectus as amended or supplemented.
(ii) The Company is duly qualified to transact
business in all jurisdictions in which the conduct of its
business requires such qualification, or in which the failure
to qualify would have a materially adverse effect upon the
business of the Company.
(iii) Each subsidiary of the Company has been duly
organized and is validly existing as a corporation, limited
liability company or limited partnership in good standing
under the laws of the jurisdiction of its incorporation or
organization, with corporate power and authority or power and
authority as a limited liability company or limited
partnership to own its properties and conduct its business as
described in the Prospectus as amended or supplemented; each
such subsidiary is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires
such qualification, or in which the failure to qualify would
have a materially adverse effect upon the business of such
subsidiary; all of the issued and outstanding capital stock of
each such corporate subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned
by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and the
Company and one such corporate subsidiary are the only members
or general partners of the Company's limited liability company
or limited partnership subsidiaries, as
14
applicable, and own the entire membership or general
partnership interest in each such subsidiary free and clear of
any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(iv) This Agreement has been duly authorized,
executed and delivered by the Company
(v) The Notes, in the form(s) certified by the
Company as of the date hereof, have been duly authorized for
issuance, offer and sale pursuant to this Agreement and, when
issued, authenticated and delivered pursuant to the provisions
of this Agreement and the Indenture against payment of the
consideration therefor, will constitute valid and legally
binding obligations of the Company, enforceable in accordance
with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting enforcement of creditors' rights
generally or by general equity principles, and except further
as enforcement thereof may be limited by (1) requirements that
a claim with respect to any Notes payable other than in U.S.
dollars (or a foreign currency or composite currency judgment
in respect of such claim) be converted into U.S. dollars at a
rate of exchange prevailing on a date determined pursuant to
applicable law or (2) governmental authority to limit, delay
or prohibit the making of payments outside the United States;
and each holder of Notes will be entitled to the benefits of
the Indenture.
(vi) The Indenture has been duly authorized,
executed and delivered by the Company and (assuming the
Indenture has been duly authorized, executed and delivered by
the Trustee) constitutes a legal, valid and binding agreement
of the Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating
to or affecting enforcement of creditors' rights generally or
by general equity principles, and further as enforcement
thereof may be limited by (1) requirements that a claim with
respect to any Notes payable other than in U.S. dollars (or a
foreign currency or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to
applicable law or (2) governmental authority to limit, delay
or prohibit the making of payments outside the United States.
(vii) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the
Notes, the Indenture and this Agreement with respect to the
Notes and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known
to such counsel to which the Company is a party or by which
the Company is bound or to which any of the property or assets
of the Company is subject, nor will such actions result in any
violation of the provisions of the Articles of Incorporation
15
or By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of
its properties.
(viii) The Registration Statement is effective under
the 1933 Act and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(ix) The Registration Statement and the Prospectus,
excluding the documents incorporated by reference therein, as
of their respective effective or issue dates, comply as to
form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations; it being understood,
however, that no opinion need be rendered with respect to the
financial statements, schedules and other financial and
statistical data included or incorporated by reference in the
Registration Statement or the Prospectus. If applicable, the
Rule 434 Prospectus conforms in all material aspects to the
requirements of Rule 434 under the 1933 Act Regulations.
(x) Each document filed pursuant to the 1934 Act
(other than the financial statements, schedules and other
financial and statistical data included therein, as to which
no opinion need be rendered) and incorporated or deemed to be
incorporated by reference in the Prospectus complied when so
filed as to form in all material respects with the 1934 Act
and the 1934 Act Regulations.
(xi) The statements set forth in the Prospectus
under the captions "Description of Debt Securities",
"Description of Notes" and "Certain United States Federal
Income Tax Considerations", insofar as they constitute a
summary of documents referred to therein or matters of law are
accurate summaries and fairly and correctly present the
information called for with respect to such documents and
matters.
(xii) To the best of such counsel's knowledge and
information, there are no legal or governmental proceedings
pending or threatened which are required to be disclosed in
the Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the Company
or any of its subsidiaries is a party or of which any of the
property of the Company or its subsidiaries is the subject
which are not described in the Prospectus, including ordinary
routine litigation incidental to the business, are, considered
in the aggregate, not material to the business of the Company
and its subsidiaries considered as one enterprise.
(xiii) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required
to be described or referred to in the Registration Statement
16
or the Prospectus or to be filed as exhibits to the
Registration Statement other than those described or referred
to therein or filed as exhibits thereto, the descriptions
thereof or references thereto are correct, and, to the best of
such counsel's knowledge and information, no default exists in
the due performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to or filed which would have
a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(xiv) The Notes, in the form(s) certified by the
Company as of the date hereof, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture, will be excluded or exempted from the provisions of
the Commodity Exchange Act.
(xv) Neither the Company nor any of its
subsidiaries is required to be registered under the 1940 Act.
(2) Opinion of Counsel to the Agents. The favorable opinion of
Brown & Wood LLP, counsel to the Agents, covering the matters referred
to in subsection (a)(1) under the subheadings (i), (iv), (v), (vi),
(viii), (ix) and (xi) above. In rendering their opinion, Brown & Wood
LLP may rely as to matters of Virginia law upon the opinion of Hunton &
Williams.
(3) Opinion of Counsel to the Company. The favorable opinion
of Hunton & Williams, counsel for the Company, in form and substance
satisfactory to counsel for the Agents, to the effect that the Company
has qualified to be taxed as a real estate investment trust pursuant to
Sections 856 through 860 of the Code for its most recently ended fiscal
year and for the four fiscal years immediately preceding such year, and
the Company's organization and contemplated method of operation are
such as to enable it to continue to so qualify for its current fiscal
year.
(4) Disclosure Documents. In giving their opinions required by
subsections (a)(1) and (a)(2), respectively, of this Section, Hunton &
Williams and Brown & Wood LLP shall each additionally state that
nothing has come to their attention that would lead them to believe
that the Registration Statement or any amendment thereto (excluding the
financial statements and financial schedules included or incorporated
by reference therein, as to which such counsel need express no belief),
at the time it became effective or at the time an Annual Report on Form
10-K was filed by the Company with the Commission (whichever is later),
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (excluding the financial statements and
financial schedules included or incorporated by reference therein, as
to which such counsel need express no belief), at the date hereof (or,
if such
17
opinion is being delivered in connection with the purchase of Notes
from the Company by one or more Agents as principal pursuant to Section
7(c) hereof, at the date of any agreement by such Agent or Agents to
purchase Notes as principal and at the Settlement Date with respect
thereto, as the case may be) (included or) includes an untrue statement
of a material fact or (omitted or) omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Officer's Certificate. At the date hereof, the Agents shall have
received a certificate of the Chief Executive Officer, President or Vice
President and the principal financial officer or principal accounting officer of
the Company, dated as of the date hereof, to the effect that (i) since the
respective dates as of which information is given in the Prospectus or since the
date of any agreement by one or more Agents to purchase Notes from the Company
as principal, there has not been any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) the
representations and warranties of the Company contained in Section 2 hereof are
true and correct with the same force and effect as though expressly made at and
as of the date of such certificate and (iii) the Company has performed or
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the date of such certificate.
(c) Comfort Letter of Ernst & Young LLP. On the date hereof, the Agents
shall have received a letter from Ernst & Young LLP, dated as of the date hereof
and in form and substance satisfactory to the Agents, to the effect that:
(i) they are independent accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act and the
1934 Act and the applicable published rules and regulations thereunder;
(ii) it is their opinion that the consolidated financial statements and
supporting schedules of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement and the
Prospectus and covered by their opinions therein comply in form in all
material respects with the applicable accounting requirements of the
1933 Act and the 1934 Act and the related published rules and
regulations thereunder; (iii) based upon limited procedures set forth
in detail in such letter (which shall include, without limitation, the
procedures specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described
in SAS No. 71, Interim Financial Information, with respect to the
unaudited condensed consolidated financial statements of the Company
and its subsidiaries included or incorporated by reference in the
Registration Statement), nothing came to their attention that caused
them to believe that (A) any material modifications should be made to
the unaudited financial statements and financial statement schedules of
the Company and its subsidiaries included or incorporated by reference
in the Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles, (B) the
unaudited financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus do not comply as to form in all material
18
respects with the applicable accounting requirements of the 1934 Act
and the related published rules and regulations thereunder, or (C) at a
specified date not more than three days prior to the date of such
letter, there has been any change in the capital stock of the Company
or in the notes payable or mortgage notes payable of the Company or any
decrease in the total assets of the Company, as compared with the
amounts shown in the most recent consolidated balance sheet included or
incorporated by reference in the Registration Statement and the
Prospectus or, during the period from the date of the most recent
consolidated statement of operations included or incorporated by
reference in the Registration Statement and the Prospectus to a
specified date not more than three days prior to the date of such
letter, there were any decreases, as compared with the corresponding
period in the preceding year, in rental income or in the total or per
share amounts of net income or income before gains (losses) on
investments and extraordinary items of the Company, except in all
instances for changes, increases or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur or
except for such exceptions enumerated in such letter as shall have been
agreed to by the Agents and the Company; (iv) they have compared the
information in the Prospectus under selected captions with the
disclosure requirements of Regulation S-K and on the basis of limited
procedures specified in such letter nothing came to their attention as
a result of the foregoing procedures that caused them to believe that
this information does not conform in all material respects with the
disclosure requirements of Items 301, 402 and 503(d) of Regulation S-K;
and (v) in addition to the audit referred to in their opinions and the
limited procedures referred to in clause (iii) and (iv) above, they
have carried out certain specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial
information which are included or incorporated by reference in the
Registration Statement and the Prospectus and which are specified by
the Agents, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial
and other records of the Company and its subsidiaries identified in
such letter.
(d) Other Documents. On the date hereof and on each Settlement Date,
counsel to the Agents shall have been furnished with such documents and opinions
as such counsel may reasonably require for the purpose of enabling such counsel
to pass upon the issuance and sale of Notes as herein contemplated and related
proceedings, or in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of Notes as herein contemplated shall be satisfactory in
form and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the applicable Agent or Agents by notice to the Company at any time and any
such termination shall be without liability of any party to any other party,
except that the covenant regarding provision of an earnings statement set forth
in Section 4(h) hereof, the provisions concerning payment of expenses under
Section 10 hereof, the indemnity and contribution agreement set forth in
Sections 8 and 9 hereof, the provisions concerning the representations,
warranties and agreements to survive delivery of
19
Section 11 hereof, the provisions relating to governing law and forum set forth
in Section 14 and the provisions relating to parties set forth in Section 15
hereof shall remain in effect.
SECTION 6. Delivery of and Payment for Notes Sold through an Agent.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, such Agent shall promptly notify the Company and deliver
such Note to the Company and, if such Agent has theretofore paid the Company for
such Note, the Company will promptly return such funds to such Agent. If such
failure occurred for any reason other than default by such Agent in the
performance of its obligations hereunder, the Company will reimburse such Agent
on an equitable basis for its loss of the use of the funds for the period such
funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants and agrees with the Agents that:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
the Company of an offer for the purchase of Notes (whether to one or more Agents
as principal or through an Agent as agent), and each delivery of Notes (whether
to one or more Agents as principal or through an Agent as agent), shall be
deemed to be an affirmation that the representations and warranties of the
Company contained in this Agreement and in any certificate theretofore delivered
to the Agents pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of delivery
to such Agent or Agents or to the purchaser or its agent, as the case may be, of
the Note or Notes relating to such acceptance or sale, as the case may be, as
though made at and as of each such time (and it is understood that such
representations and warranties shall relate to the Registration Statement and
Prospectus as amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rate or formula applicable to the Notes or relating solely to the issuance
and/or offering of securities other than the Notes), (ii) there is filed with
the Commission any document incorporated by reference into the Prospectus (other
than any Current Report on Form 8-K relating solely to the issuance and/or
offering of securities other than the Notes, unless the Agents shall otherwise
specify), (iii) (if required in connection with the purchase of Notes from the
Company by one or more Agents as principal) the Company sells Notes to such
Agent or Agents as principal or (iv) the Company sells Notes in a form not
previously certified to the Agents by the Company, the Company shall furnish or
cause to be furnished to the Agent(s), forthwith a certificate dated the date of
filing with the Commission of such supplement or document, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form satisfactory to the Agent(s) to the effect that the
20
statements contained in the certificate referred to in Section 5(b) hereof which
were last furnished to the Agents are true and correct at the time of such
amendment, supplement, filing or sale, as the case may be, as though made at and
as of such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in Section 5(b) hereof, modified as necessary to relate
to the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rate or formula applicable to the Notes, providing solely for the inclusion of
additional financial information, or, unless the Agents shall otherwise specify,
relating solely to the issuance and/or offering of securities other than the
Notes), (ii) there is filed with the Commission any document incorporated by
reference into the Prospectus (other than any Current Report on Form 8-K
relating solely to the issuance and/or offering of securities other than the
Notes, unless the Agents shall otherwise specify), (iii) (if required in
connection with the purchase of Notes from the Company by one or more Agents as
principal) the Company sells Notes to such Agent or Agents as principal or (iv)
the Company sells Notes in a form not previously certified to the Agents by the
Company, the Company shall furnish or cause to be furnished forthwith to the
Agents and to counsel to the Agents the written opinion of Hunton & Williams,
counsel to the Company, or other counsel satisfactory to the Agents, dated the
date of filing with the Commission of such supplement or document, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form and substance satisfactory to the Agents, of the same tenor as the
opinion referred to in Section 5(a)(1) hereof (and including the statement
required by Section 5(a)(4)), but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion or, in lieu of such opinion, counsel last
furnishing such opinion to the Agents shall furnish the Agents with a letter
substantially to the effect that the Agents may rely on such last opinion to the
same extent as though it was dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes), (ii) there is filed with the Commission any document
incorporated by reference into the Prospectus which contains additional
financial information, or (iii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to such Agent or Agents as principal, the Company shall cause Ernst &
Young LLP forthwith to furnish to the Agents a letter, dated the date of
effectiveness of such amendment, supplement or document with the Commission, or
the date of such sale, as the case may be, in form satisfactory to the Agents,
of the same tenor as the portions of the letter referred to in clauses (i) and
(ii) of Section 5(c) hereof but modified
21
to relate to the Registration Statement and Prospectus as amended and
supplemented to the date of such letter, and of the same general tenor as the
portions of the letter referred to in clauses (iii) and (iv) of said Section
5(c) with such changes as may be necessary to reflect changes in the financial
statements and other information derived from the accounting records of the
Company.
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls such Agent within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be a part of the Registration Statement pursuant
to Rule 434 of the 1933 Act Regulations, if applicable, or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in the Prospectus (or any amendment or
supplement thereto) or the omission, or alleged omission therefrom, of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission
referred to in subsection (i) above, or any such alleged untrue
statement or omission, if such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, the fees and disbursements of counsel chosen by the
Agents), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceedings by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Agent expressly for use in the Registration Statement (or any amendment thereto)
or the Prospectus (or any amendment or supplement thereto).
22
(b) Indemnification of the Company. Each Agent agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Agent expressly for use in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto).
(c) General. Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of such action. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
SECTION 9. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 8 is for
any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Agents shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Company and
one or more of the Agents, as incurred, in such proportions that each Agent is
responsible for that portion represented by the percentage that the commission
or underwriting discount received by such Agent bears to the total sales price
from the sale of the Notes sold to or through such Agent that were the subject
of the claim for indemnification and the Company is responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 9, each person, if any, who controls an Agent within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Agent, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as the Company.
23
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation and filing of the Registration Statement and all
amendments thereto and the Prospectus and any amendments or supplements thereto;
(b) The preparation, filing and reproduction of this Agreement;
(c) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the eligibility and issuance of
Notes in book-entry form;
(d) The fees and disbursements of the Company's accountants and
counsel, of the Trustee and its counsel, and of any calculation agent or
exchange rate agent;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the program relating to the
Notes and incurred from time to time in connection with the transactions
contemplated hereby;
(f) The qualification of the Notes under state securities laws in
accordance with the provisions of Section 4(i) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Agents in connection
therewith and in connection with the preparation of any Blue Sky or Legal
Investment Survey;
(g) The printing and delivery to the Agents in quantities as stated
above of copies of the Registration Statement and any amendments thereto, and of
the Prospectus and any amendments or supplements thereto, and the delivery by
the Agents of the Prospectus and any amendments or supplements thereto in
connection with solicitations or confirmations of sales of the Notes;
(h) The preparation, reproducing and delivery to the Agents of copies
of the Indenture and all amendments, supplements and modifications thereto;
(i) Any fees charged by nationally recognized statistical rating
organizations for the rating of the Notes;
(j) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;
(k) The fees and expenses incurred with respect to any filing with the
National Association of Securities Dealers, Inc.;
(l) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company; and
24
(m) The cost of providing any CUSIP or other identification numbers for
the Notes.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of an Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
agreement by one or more Agents to purchase Notes from the Company as principal)
may be terminated for any reason at any time by the Company or by an Agent, as
to itself, upon the giving of 30 days' written notice of such termination to the
other party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. The
applicable Agent or Agents may also terminate any agreement by such Agent or
Agents to purchase Notes from the Company as principal, by notice to the
Company, at any time at or prior to the Settlement Date relating thereto (i) if
there has been, since the date of such agreement or since the respective dates
as of which information is given in the Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or any outbreak of hostilities or other calamity or crisis or
escalation of any existing hostilities, the effect of which is such as to make
it, in the judgment of such Agent or Agents, impracticable to market the Notes
or enforce contracts for the sale of the Notes, or (iii) if trading in any of
the securities of the Company has been suspended by the Commission or the New
York Stock Exchange, or if trading generally on either the New York Stock
Exchange or the American Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by Federal, New York or Virginia authorities, (iv) if the rating
assigned by any nationally recognized statistical rating organization to any
debt securities of the Company as of the date of such agreement shall have been
lowered since that date or if any such rating organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any debt securities of the Company, or (v) if there
shall have come to the attention of such Agent or Agents any facts that would
cause them to believe that the Prospectus, at the time it was required to be
delivered to a purchaser of Notes, included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time of such
delivery, not misleading.
25
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commission earned in accordance with the third paragraph of
Section 3(b) hereof, (ii) if at the time of termination (A) any Agent shall own
any Notes purchased by it as principal with the intention of reselling them or
(B) an offer to purchase any of the Notes has been accepted by the Company but
the time of delivery to the purchaser or his agent of the Note or Notes relating
thereto has not occurred, the covenants set forth in Sections 4 and 7 hereof
shall remain in effect until such Notes are so resold or delivered, as the case
may be, and (iii) the covenant set forth in Section 4(h) hereof, the provisions
of Section 10 hereof, the indemnity and contribution agreements set forth in
Sections 8 and 9 hereof, and the provisions of Sections 11, 14 and 15 hereof
shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
United Dominion Realty Trust, Inc.
10 South 6th Street, Suite 203
Richmond, Virginia 23219-3802
Attention: John P. McCann, President and Chief Executive Officer
Telecopy No.: (804) 343-1912
If to the Agents:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telecopy No.: (212) 449-2234
Alex. Brown & Sons Incorporated
135 E. Baltimore Street
Baltimore, Maryland 21202
Attention: William G. Byrnes, Managing Director
Telecopy No.: (410) 783-3033
26
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Lisa Payne, Vice President
Telecopy No.: (212) 902-3000
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Attention: Keysha Bailey, Vice President
Telecopy No.: (212) 648-5151
NationsBanc Capital Markets, Inc.
100 North Tryon Street
Charlotte, North Carolina 28255
Attention: Lynn McConnell, Director of Product Management
Telecopy No.: (704) 388-9939
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. Governing Law; Forum.
This Agreement and all the rights and obligations of the parties shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in such State. Any suit,
action or proceeding brought by the Company against any Agent in connection with
or arising under this Agreement shall be brought solely in the state or federal
court of appropriate jurisdiction located in the Borough of Manhattan, The City
of New York.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Sections 8 and 9 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and respective successors and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Notes shall be deemed to be a
successor by reason merely of such purchase.
27
SECTION 16. Counterparts.
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.
28
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between the Agents and the Company in accordance with its terms.
Very truly yours,
UNITED DOMINION REALTY TRUST, INC.
By: s/ James Dolphin
-------------------------------
Name: James Dolphin
Title: Senior Vice President
Confirmed and Accepted, as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: S/
-------------------------------
ALEX. BROWN & SONS INCORPORATED
By: S/
- -------------------------------
S/
- -------------------------------
(Goldman, Sachs & Co.)
J.P. MORGAN SECURITIES INC.
By: S/
- -------------------------------
NATIONSBANC CAPITAL MARKETS, INC.
By: S/
- -------------------------------
29
EXHIBIT A
The following terms, if applicable, shall be agreed to by one or more
Agents and the Company in connection with each sale of Notes:
Principal Amount: $
(or principal amount of foreign currency or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Default Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
[ ] LIBOR Reuters - Page:
[ ] LIBOR Telerate - Page:
Index Currency:
If CMT Rate,
Designated CMT Telerate Page:
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Default Rate:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
If Repayable:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: %, plus accrued interest, if any, from
Settlement Date and Time:
Additional/Other Terms:
Also, in connection with the purchase of Notes from the Company by one or more
Agents as principal, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 7(b) of the Distribution
Agreement. Legal Opinions pursuant to Section 7(c) of the Distribution
Agreement. Comfort Letter pursuant to Section 7(d) of the Distribution
Agreement. Stand-off Agreement pursuant to Section 4(k) of the
Distribution Agreement.
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay the applicable Agent, on a discount basis, a commission for the sale
of each Note equal to the principal amount of such Note multiplied by the
appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
From 9 months to less than 1 year............. .125%
From 1 year to less than 18 months............ .150
From 18 months to less than 2 years........... .200
From 2 years to less than 3 years............. .250
From 3 years to less than 4 years............. .350
From 4 years to less than 5 years............. .450
From 5 years to less than 6 years............. .500
From 6 years to less than 7 years............. .550
From 7 years to less than 10 years............ .600
From 10 years to less than 15 years........... .625
From 15 years to less than 20 years........... .700
From 20 years to 30 years..................... .750
Greater than 30 years......................... *
- --------
* As agreed to by the Company and the applicable Agent at the time of
sale.