EXHIBIT 1.01
UNITED DOMINION REALTY TRUST, INC.
4,000,000 SHARES
COMMON STOCK
($1.00 PAR VALUE)
UNDERWRITING AGREEMENT
September 5, 2003
Wachovia Capital Markets, LLC
As Representative of the Underwriters
c/o Wachovia Capital Markets, LLC
7 St. Paul Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
United Dominion Realty Trust, Inc., a corporation organized under the
laws of Maryland (the "COMPANY," which term, as used herein, includes its
predecessor United Dominion Realty Trust, Inc., a Virginia corporation (the
"PREDECESSOR")), proposes to sell to the several underwriters named in Schedule
I hereto (the "UNDERWRITERS"), for whom you (the "REPRESENTATIVES") are acting
as representatives, 4,000,000 shares of Common Stock, $1.00 par value ("COMMON
STOCK"), of the Company (said shares to be issued and sold by the Company being
hereinafter called the "FIRM SECURITIES"), and for the purpose of covering
over-allotments in connection with the sale of the Firm Securities, at the
option of the Representatives, up to an additional 600,000 shares (the "OPTION
Securities") of Common Stock. The Firm Securities and the Option Securities are
referred to herein as the "UNDERWRITTEN SECURITIES" or the "SECURITIES." To the
extent there are no additional Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires. To the extent that there is only a single Underwriter
listed on Schedule I, then references to the "several" Underwriters shall be
disregarded. Any reference herein to the Registration Statement or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of the Registration Statement or
the issue date of the Prospectus, as the case may be; and any reference herein
to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date of
the Registration Statement, or the issue date of the Prospectus, as the case may
be, deemed to be incorporated therein by reference. Certain terms used herein
are defined in Section 17 hereof.
As used herein, the term "subsidiary" means a corporation, real estate
investment trust, partnership or limited liability company a majority of the
outstanding voting stock or beneficial, partnership or membership interests, as
the case may be, of which is owned or controlled, directly or indirectly, by the
Company or by one or more other subsidiaries of the Company, including, without
limitation, United Dominion Realty L.P., a Virginia limited partnership
("UDR OPERATING PARTNERSHIP"), and Heritage Communities L.P., a Delaware limited
partnership ("HERITAGE OPERATING PARTNERSHIP" and, together with UDR Operating
Partnership, the "OPERATING PARTNERSHIPS").
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form
S-3 under the Act and has prepared and filed with the Commission a
registration statement (file number 333-101611) on Form S-3, including
a related preliminary prospectus, for registration under the Act of the
offering and sale of the Shelf Securities. The Company may have filed
one or more amendments thereto, including a related preliminary
prospectus, each of which has previously been made available to you.
The Company will next file with the Commission a final prospectus
supplement in accordance with Rule 424(b). The Company has included in
such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such registration statement and
the Prospectus. As filed, such Prospectus Supplement shall contain all
Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such specific
additional information and other changes as the Company has advised
you, prior to the Execution Time, will be included or made therein.
(b) On the Effective Date and on each date that the
Company's most recent Annual Report on Form 10-K was filed with the
Commission, the Registration Statement did, and when the Prospectus
Supplement is first filed (if required) in accordance with Rule 424(b)
and on the Closing Date (as defined herein), the Prospectus (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; on the Effective Date, on each date that
the Company's most recent Annual Report on Form 10-K was filed with the
Commission and at the Execution Time, the Registration Statement did
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading; and, the Prospectus, on
the date of any filing of a Prospectus Supplement pursuant to Rule
424(b) and on the Closing Date (together with any supplement thereto)
will not include any untrue statement of a material fact or omit 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; provided, however, that the Company makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto) as
described in Section 8(b) hereof.
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(c) Each of the Company and its subsidiaries has been
duly incorporated or formed, as applicable, and is validly existing as
a corporation, limited liability company, real estate investment trust
or partnership, as the case may be, in good standing under the laws of
the jurisdiction in which it is chartered or organized with full power
and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation, limited
liability company, real estate investment trust or partnership, as the
case may be, and is in good standing under the laws of each
jurisdiction which requires such qualification (except in any case in
which the failure to so qualify or to be in good standing would not
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto)).
(d) All the outstanding shares of capital stock of each
corporate subsidiary and all of the issued and outstanding shares of
beneficial interest of each real estate investment trust subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus,
all outstanding shares of capital stock or other ownership interest of
each of the Company's corporate subsidiaries and all outstanding shares
of beneficial interest of each real estate investment trust subsidiary
are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances; all
outstanding partnership interests of each partnership subsidiary and
all outstanding limited liability company interests of each limited
liability company subsidiary have been duly authorized and validly
issued, are fully paid and (except in the case of general partnership
interests) non-assessable, and, except as otherwise disclosed in the
Prospectus and except for minority interests in the Operating
Partnerships described in the Prospectus, are owned by the Company
either directly or through wholly owned subsidiaries free and clear of
any perfected security interest or any other security interests,
claims, liens or encumbrances; and the Company and/or one or more
subsidiaries of the Company are the only members or general partners of
the Company's limited liability company or limited partnership
subsidiaries, as applicable, and own the entire membership or general
partnership interest in each such subsidiary free and clear of any
perfected security interest or any other security interests, claims,
liens or encumbrances.
(e) The Company's authorized equity capitalization is as
set forth in the Prospectus; the capital stock of the Company conforms
in all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock and the outstanding
shares of the Company's preferred stock, no par value per share (the
"PREFERRED STOCK"), have been duly and validly authorized and issued
and are fully paid and nonassessable; the Securities have been duly and
validly authorized for issuance and sale to the Underwriters pursuant
to this Agreement and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued, fully
paid and nonassessable; the Securities are duly listed, and admitted
and authorized for trading, subject to official notice of issuance, on
the New York Stock Exchange; the
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certificates for the Securities are in valid and sufficient form;
neither the holders of outstanding shares of capital stock of the
Company nor the holders of any of the Company's other outstanding
securities are entitled to preemptive or other rights to subscribe for
the Securities; and, except as set forth in the Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests in
the Company are outstanding.
(f) There is no franchise, contract or other document of
a character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Prospectus
Supplement under the headings "Description of Common Stock" and
"Federal Income Tax Considerations" and in the Prospectus under the
headings "Description of Preferred Stock" and "Federal Income Tax
Considerations" (as modified by the Prospectus Supplement), insofar as
such statements constitute matters of law or legal conclusions, are
correct in all material respects.
(g) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company, the
Operating Partnerships or any subsidiaries and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection
with the offering, issuance and sale of the Securities.
(h) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles.
(i) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(j) No consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such as
have been obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus.
(k) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter or by-laws or other organizational
documents of the Company or any of its subsidiaries, (ii) the terms of
any indenture, contract, lease, mortgage, deed
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of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or
any of its subsidiaries is a party or bound or to which its or their
property is subject (except in any case in which such would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto)), or (iii) any statute, law, rule, regulation, judgment, order
or decree applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
any of its subsidiaries or any of its or their properties (except in
any case in which such would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto)).
(l) No holders of securities of the Company have rights
to the registration of such securities under the Registration
Statement.
(m) The financial statements together with related notes
and schedules of the Company and its subsidiaries and of any companies,
other entities or properties acquired or to be acquired by the Company,
in each case as set forth or incorporated by reference in the
Registration Statement and the Prospectus, present fairly the financial
position and the results of operations of the Company and its
subsidiaries and of such companies, entities and properties, as the
case may be, at the indicated dates and for the indicated periods. Such
financial statements have been prepared in accordance with United
States generally accepted principles of accounting, consistently
applied throughout the periods involved, and all adjustments necessary
for a fair presentation of results for such periods have been made
(except to the extent that, in accordance with the Exchange Act and the
rules and regulations of the Commission thereunder, certain footnotes
have been omitted from the financial statements included in the
Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Registration Statement and the Prospectus). The summary financial
and statistical data included in the Registration Statement and
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with the financial statements presented
therein; the pro forma financial statements and related notes thereto,
if any, included in the Registration Statement and Prospectus present
fairly the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the assumption used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(n) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court
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or governmental action, order or degree, otherwise than as set forth or
contemplated in the Prospectus.
(o) Since the respective dates as of which information is
given in the Registration Statement, there has not been any material
change in the capital stock, total assets or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus. Neither the Company nor any of its subsidiaries has entered
into any transaction not in the ordinary course of business which is
material to the Company and its subsidiaries considered as a whole.
(p) No action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries or its or their property is
pending or, to the best knowledge of the Company, threatened that (i)
could reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto).
(q) Each of the Company and each of its subsidiaries owns
or leases all such properties as are necessary to the conduct of its
operations as presently conducted.
(r) Neither the Company nor any subsidiary is in
violation or default of (i) any provision of its charter or bylaws or
other organizational documents, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject (except in any case in which such would not have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto)), or (iii) any
statute, law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body, arbitrator
or other authority having jurisdiction over the Company or such
subsidiary or any of its properties (except in any case in which such
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto)), as applicable.
(s) Ernst & Young LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the
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audited consolidated financial statements and schedules included in the
Prospectus, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published
rules and regulations thereunder, and to the Company's knowledge, Ernst
& Young LLP has not engaged in any activity with respect to the Company
that is prohibited by any of the subsections (g) through (l) of Section
10A of the Exchange Act.
(t) There are no transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Securities hereunder.
(u) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto)) and has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good
faith or as would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(v) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its subsidiaries'
principal suppliers, contractors or customers, that could have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto).
(w) The Company and each of its subsidiaries are insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company or any of its subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause (except in any case in which such
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and
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its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto)); and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(x) Except as described in the Prospectus, the Company
and its subsidiaries have good and marketable title to all real
properties owned by them (each, a "PROPERTY" and collectively, the
"PROPERTIES"), in each case free from liens, encumbrances and defects
that would materially affect the value thereof or materially interfere
with the use made or to be made thereof by them; the Company or its
subsidiaries have obtained an owner's title insurance policy in an
amount at least equal to the cost of acquisition from a title insurance
company with respect to each of its real estate properties; except as
disclosed in the Prospectus, the Company and its subsidiaries hold any
leased real or personal property under valid and enforceable leases,
with no exceptions that would materially interfere with the value
thereof or materially interfere with the use made or to be made thereof
by them; neither the Company nor its subsidiaries has knowledge of any
pending or threatened condemnation proceeding, zoning change, or other
proceeding or action that will in any manner affect the size of, use
of, improvements on, construction on or access to any of the
Properties.
(y) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
required by the terms of the Company's indebtedness described in the
Prospectus.
(z) The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses (except in any case in which
failure to possess such would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto)), and neither the Company nor any
such subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions
8
in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(aa) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(bb) The Company has not taken, directly or indirectly,
any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.
(cc) The Company and its subsidiaries (i) are in
compliance with any and all applicable Environmental Laws, (ii) have
received and are in compliance with all permits, licenses or other
approvals required of them under applicable Environmental Laws to
conduct their respective businesses and all such permits, licenses and
approvals remain in full force and effect, and (iii) have not received
and are not aware of any pending or threatened notice of any actual or
potential liability for the investigation or remediation or any
disposal or release of Hazardous Substances or for any other
non-compliance with Environmental Laws, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not,
individually or in the aggregate, result in a material adverse change
in the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto). Except as set forth in the
Prospectus, (i) neither the Company nor any of its subsidiaries has
been named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, and (ii) to the Company's knowledge, Hazardous Substances have
not been released or disposed in, on, under or near the Properties.
(dd) Each of the Company and its subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards
of Section 302 of the United States Employee Retirement Income Security
Act of 1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "plan" (as defined in Section 3(3) of
ERISA and such regulations and published interpretations) in which
employees of the Company and its subsidiaries are eligible to
participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such
regulations and published interpretations (except in any case in which
failure to do such would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a
9
whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto)). The Company and its
subsidiaries have not incurred any unpaid liability to the Pension
Benefit Guaranty Corporation (other than for the payment of premiums in
the ordinary course) or to any such plan under Title IV of ERISA
(except in any case in which such would not have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto)).
(ee) The subsidiaries listed on Exhibit B attached hereto
are the only significant subsidiaries of the Company as defined by Rule
1-02 of Regulation S-X.
(ff) The Company and its subsidiaries own, possess,
license or have other rights to use, on reasonable terms, all patents,
patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "INTELLECTUAL PROPERTY") necessary for the conduct
of the Company's business as now conducted or as proposed in the
Prospectus to be conducted. To the Company's knowledge, (a) there is no
material infringement by third parties of any such Intellectual
Property; (b) there is no pending or threatened action, suit,
proceeding or claim by others challenging the Company's rights in or to
any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (c) there is no
pending or threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property,
and the Company is unaware of any facts which would form a reasonable
basis for any such claim; and (d) there is no pending or threatened
action, suit, proceeding or claim by others that the Company infringes
or otherwise violates any patent, trademark, copyright, trade secret or
other proprietary rights of others, and the Company is unaware of any
other fact which would form a reasonable basis for any such claim.
(gg) The Company has been and is organized and has
operated in conformity with the requirements for qualification and
taxation as a real estate investment trust (a "REIT") for each of its
taxable years beginning with the taxable year ended December 31, 1999
through its taxable year ended December 31, 2002, or any prior year
where the Company's failure to so qualify could cause the Company to
have a liability for taxes (whether in that year or any subsequent
year) for which the Internal Revenue Service is or will be entitled to
assert a claim, and its current organization and current and proposed
method of operation will enable it to continue to meet the requirements
for qualification and taxation as a REIT for the taxable year ending
December 31, 2003 and thereafter. No transaction event has occurred
which could cause the Company not to be able to qualify as a REIT for
its current taxable year or any future taxable year. The Company
currently intends to continue to qualify as a REIT under the Code.
(hh) Each of the Operating Partnerships is properly
classified as a partnership, and not as a corporation or as a publicly
traded partnership taxable as a corporation, for
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Federal income tax purposes throughout the period from its formation
through the date hereof.
(ii) Each of the subsidiaries that is a partnership or a
limited liability company (other than an entity for which a taxable
REIT subsidiary election has been made) ("SUBSIDIARY PARTNERSHIPS") is
properly classified either as a disregarded entity or as a partnership,
and not as a corporation or as a publicly traded partnership taxable as
a corporation, for Federal income tax purposes throughout the period
from its formation through the date hereof, or, in the case of any
Subsidiary Partnerships that have terminated, through the date of
termination of such Subsidiary Partnerships.
(jj) Each of the Company and its subsidiaries has filed
all federal, state, local and foreign income tax returns which have
been required to be filed and has paid all taxes required to be paid
and any other assessment, fine or penalty levied against it, to the
extent that any of the foregoing is due and payable, except, in all
cases, for any such tax, assessment, fine or penalty that is being
contested in good faith. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred
to in Section 1(m) hereof in respect of all federal, state, local and
foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of the subsidiaries has not been
finally determined.
(kk) Since July 30, 2002, the Company has not, in
violation of the Sarbanes-Oxley Act, directly or indirectly, including
through a subsidiary, extended or maintained credit, arranged for the
extension of credit, or renewed an extension of credit, in the form of
a personal loan to or for any executive officer or director of the
Company.
(ll) The Company has filed certifications and statements
with its periodic reports pursuant to Sections 302 and 906 of the
Sarbanes-Oxley Act and has made the evaluations of the Company's
disclosure controls and procedures required under Rule 13a-15 under the
Exchange Act.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of $18.08 per
share, the amount of the Firm Securities set forth opposite such Underwriter's
name in Schedule I hereto.
In addition, the Company hereby grants to the Underwriters the option
to purchase up to 600,000 Option Securities at the same purchase price per share
to be paid by the Underwriters to the Company for the Firm Securities as set
forth in this Section 2, for the sole purpose of covering over-allotments in the
sale of Firm Securities by the Underwriters. This option may be exercised at any
time and from time to time, in whole or in part, on or before the thirtieth day
11
following the date of the Prospectus Supplement, by written notice by you to the
Company. Such notice shall set forth the aggregate number of Option Securities
as to which the option is being exercised and the date and time, as reasonably
determined by you, when the Option Securities are to be delivered (such date and
time being herein sometimes referred to as the "OPTION CLOSING DATE"); provided,
however, that the Option Closing Date shall not be earlier than the Closing Date
or earlier than the second full business day after the date on which the option
shall have been exercised nor later than the eighth full business day after the
date on which the option shall have been exercised (unless such time and date
are postponed in accordance with the provisions of Section 9 hereof).
The number of Option Securities to be sold to each Underwriter shall be
the number which bears the same ratio to the aggregate number of Option
Securities being purchased as the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule I hereto (or such number increased as
set forth in Section 9 hereof) bears to the total number of Firm Securities
being purchased from the Company, subject, however, to such adjustments to
eliminate any fractional shares as Wachovia Capital Markets, LLC in its sole
discretion shall make.
3. Delivery and Payment. Delivery of and payment for the Firm
Securities shall be made at 9:00 AM, New York City time, on September 11, 2003,
or at such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Firm Securities being herein called the "CLOSING DATE"). Delivery of the Firm
Securities and the Option Securities shall be made to the Representatives for
the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price thereof
to or upon the order of the Company by wire transfer payable in same-day funds
to an account specified by the Company. Delivery of the Firm Securities and the
Option Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus as amended and supplemented by the Prospectus Supplement.
5. Agreements. The Company agrees with the several Underwriters
that:
(a) Prior to the termination of the offering of the
Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for
your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely
12
filing. The Company will promptly advise the Representatives (1) when
the Prospectus, and any supplement thereto, shall have been filed with
the Commission pursuant to Rule 424(b), (2) during the period in which
a prospectus relating to the Securities is required to be delivered
under the Act, when any amendment to the Registration Statement shall
have been filed or become effective, (3) of any request by the
Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Prospectus or for any additional information, (4) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (5) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act (the "PROSPECTUS
DELIVERY PERIOD"), any event occurs as a result of which the Prospectus
as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder, the Company
promptly will (1) notify the Representatives of such event, (2) prepare
and file with the Commission, subject to the first sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (3)
supply any supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make
generally available to its security holders and to the Representatives
an earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of the Prospectus and
any supplement thereto as the Representatives may reasonably request.
The Company will pay the expenses of printing or other production of
all documents relating to the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Securities and will pay any fee of the National Association of
Securities Dealers, Inc., in connection with its review of the
offering; provided that in no
13
event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(f) The Company will apply the net proceeds from the sale
of the Securities as set forth under the caption "Use of Proceeds" in
the Prospectus Supplement.
(g) The Company will use its best efforts to maintain the
listing of the Securities on the New York Stock Exchange. In addition,
on or before completion of this offering, the Company shall make all
filings required under applicable securities laws and by the New York
Stock Exchange.
(h) The Company will not, without the prior written
consent of Wachovia Capital Markets, LLC, sell, offer or contract to
sell, solicit offers to purchase (including, without limitation, offers
and solicitations made by Cantor Fitzgerald & Co. on behalf of the
Company) , pledge or otherwise dispose of, (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in privity with
the Company or any affiliate of the Company) directly or indirectly,
including the filing (or participation in the filing) of a registration
statement with the Commission in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act, any
shares of Common Stock (other than the Securities sold to the
Underwriters) or any securities convertible into, or exercisable or
exchangeable for, shares of Common Stock, or publicly announce an
intention to effect any such transaction, for a period beginning on and
including the date of this Agreement through and including the date
which is 30 days after the date of this Agreement, provided, however,
that the Company may (i) issue and sell Common Stock pursuant to any
employee stock option plan, employee stock ownership plan or dividend
reinvestment plan of the Company in effect at the Execution Time; (ii)
issue Common Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time; and (iii) issue
Common Stock and/or securities convertible into Common Stock as
consideration for the acquisition by the Company or one of its
subsidiaries from a third party of assets or of equity interests of any
other entity which entity would, after giving effect to the acquisition
of such equity interests, be a subsidiary of the Company.
(i) The Company will not take, directly or indirectly,
any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.
(j) During the Prospectus Delivery Period, the Company
will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and
within the time periods required by the Exchange
14
Act (subject to compliance with the first sentence of Section 5(a) of
this Agreement) and in material compliance with Sections 302 and 906 of
the Sarbanes-Oxley Act.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein as of the Execution Time and the Closing Date (for
purposes of this Section 6 "Closing Date" shall refer to the Closing Date for
the Firm Securities and any Option Closing Date, if different, for the Option
Securities), to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus, and any
such supplement, will be filed in the manner and within the time period
required by Rule 424(b) and in no event later than the day prior to the
Closing Date; and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Morrison
& Foerster LLP, counsel for the Company, to have furnished to the
Representatives their opinion to the effect set forth in Exhibit D
hereto, dated the Closing Date and addressed to the Representatives, in
form and substance reasonably satisfactory to the Representatives. In
rendering such opinion, such counsel may rely as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of
the Company and public officials. References to the Prospectus in
Exhibit D hereto include any supplements thereto at the Closing Date.
(c) The Representatives shall have received from Sidley
Austin Brown & Wood LLP, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date and addressed to the Representatives,
with respect to this Agreement, the Registration Statement, the
Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the Chairman of
the Board or the President and the principal financial or accounting
officer of the Company, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Prospectus, any supplements to the Prospectus and this
Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct on and as of
the Closing Date with the same effect as if made on the
Closing Date and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
15
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus (exclusive of any supplement thereto), there has
been no material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(e) The Representatives shall have received from Ernst &
Young LLP, at the Closing Date, a letter, dated as of the Closing Date,
in form and substance satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Act and
the Exchange Act and the respective applicable rules and regulations
adopted by the Commission thereunder, and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included or
incorporated by reference in the Registration Statement and
the Prospectus and reported on by them comply as to form in
all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related
rules and regulations adopted by the Commission;
(ii) carrying out certain specified procedures
(but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
shareholders, directors and executive, audit, compensation,
corporate governance and investment and secured financing
committees of the Company and the subsidiaries; and inquiries
of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to June
30, 2003, nothing came to their attention which caused them to
believe that:
(1) with respect to the period
subsequent to June 30, 2003, there were any changes,
at a specified date not more than five days prior to
the date of the letter, in the capital stock of the
Company or any increases in consolidated secured debt
or consolidated unsecured debt or any decreases in
the total assets or stockholders' equity of the
Company as compared with the amounts shown on the
June 30, 2003 consolidated balance sheet included or
incorporated by reference in the Registration
Statement and the Prospectus, or for the period from
June 30, 2003 to such specified date there were any
decreases, as compared with the corresponding period
in the preceding year in consolidated rental income
or income before gains on sales of investments,
minority interests and extraordinary items or in
total or per share amounts of net income or funds
16
from operations of the Company and its subsidiaries,
except in all instances for changes or decreases set
forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Representatives; and
(2) the information included or
incorporated by reference in the Registration
Statement and Prospectus in response to Regulation
S-K, Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information), Item 402
(Executive Compensation) and Item 503(d) (Ratio of
Earnings to Fixed Charges) is not in conformity with
the applicable disclosure requirements of Regulation
S-K;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus and in Exhibit 12.1 to the
Registration Statement, including without limitation the
information set forth under the caption "Recent Developments,"
"Use of Proceeds" and "Ratio of Earnings to Fixed Charges and
Ratios of Earnings to Fixed Charges and Preferred Stock
Dividends" in the Prospectus, the information included or
incorporated by reference in Items 1, 2, 6, 7, 11 and 13 of
the Company's Annual Report on Form 10-K (and any amendment
thereto) incorporated by reference in the Registration
Statement and the Prospectus, and the information included in
"Compensation of Executive Officers," "Compensation of
Directors," "CEO Compensation," "Certain Business
Relationships" and "Audit Fees" included or incorporated by
reference in the Company's Proxy Statement on Schedule 14A,
incorporated by reference in the Registration Statement and
the Prospectus, the information appearing in items 1, 2 and 3
of any Quarterly Report on Form 10-Q incorporated by reference
in the Prospectus, or any information appearing in a Current
Report on Form 8-K incorporated by reference in the
Registration Statement and the Prospectus, agrees with the
accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(e) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the
17
Prospectus (exclusive of any supplement thereto) the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of
the Securities as contemplated by the Registration Statement (exclusive
of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto).
(g) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(h) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(i) The Securities shall have been listed and admitted
and authorized for trading on the New York Stock Exchange, and
satisfactory evidence of such actions shall have been provided to the
Representatives.
(j) Prior to the Closing Date, the Company shall have
furnished to the Representatives a letter substantially in the form of
Exhibit A hereto from each officer and director of the Company listed
on Exhibit C, addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be cancelled at,
or at any time prior to, the Closing Date by the Representatives, and the
obligations of the Underwriters to purchase the Option Securities may be
cancelled at, or at any time prior to, the Option Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Sidley Austin Brown & Wood LLP, counsel for the
Underwriters, at 787 Seventh Avenue, New York, New York 10019, on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally through Wachovia Capital Markets, LLC on demand for all
reasonable documented out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
18
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (including, without limitation, any Rule 462(b)
Registration Statement) as originally filed or in any amendment thereof, or in
the Prospectus, or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein as described in Section
8(b) hereof. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the statements
set forth in the first paragraph under the caption "Underwriting--Commissions
and Discounts" (concerning the public offering price, selling concession and
reallowance), the first sentence of the first paragraph under the caption
"Underwriting--Stabilization" (concerning stabilization) and the last paragraph
under the caption "Underwriting--Stabilization" (also concerning stabilization)
(but only to the extent the statements in such last paragraph concern the
Underwriters) in the Prospectus Supplement constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in the Prospectus, the Registration Statement or any of the other documents
referred to in the foregoing indemnity.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve the indemnifying party from liability under paragraph (a) or
(b) above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the
19
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. It is understood, however,
that the indemnifying party shall, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such indemnified parties, which firm shall be
designated in writing by Wachovia Capital Markets, LLC. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "LOSSES") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the
20
Underwriters on the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by it, and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus Supplement. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date or the Option Closing Date, as applicable, shall be
postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination
(or, in the case of an Option Closing Date that is subsequent to the Closing
Date for the Firm Securities, the obligations of the Underwriters to purchase
the applicable Option Securities on such Option
21
Closing Date shall be subject to termination), in the absolute discretion of the
Representatives, by notice given to the Company prior to delivery of and payment
for the Firm Securities (or such Option Securities, as the case may be), if at
any time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States shall have occurred or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be
telefaxed to Wachovia Capital Markets, LLC, 7 St. Paul Street, Baltimore,
Maryland 21202, Attention of Barrett B. Kollme (fax no.: (443) 263-6809) and
confirmed to Wachovia Capital Markets, LLC, 7 St. Paul Street, Baltimore,
Maryland 21202, (with a copy to Sidley Austin Brown & Wood LLP, 555 California
Street, San Francisco, California 94104, Attention: Eric S. Haueter) or, if sent
to the Company, will be mailed, delivered or telefaxed to (720) 283-2451 and
confirmed to it at 1745 Shea Center Drive, Suite 200, Highlands Ranch, CO 80129,
Attention: President (with a copy to Morrison & Foerster LLP, 370 Seventeenth
Street, Suite 5200, Denver, Colorado 80202, Attention: Warren L. Troupe).
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
22
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"BASE PROSPECTUS" shall mean the prospectus covering the Shelf
Securities in the form first used by the Underwriters to confirm sales
of Securities.
"BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"COMMISSION" shall mean the Securities and Exchange
Commission.
"EFFECTIVE DATE" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"ENVIRONMENTAL LAWS" shall mean any and all federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any Governmental
Authority regulating, relating to or imposing liability or standards of
conduct concerning any Hazardous Substances, public health or
environmental protection, together with any amendment or a
re-authorization thereof or thereto.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"EXECUTION TIME" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, local
or municipal governmental body, department, agency or subdivision
responsible for the due administration and/or enforcement of any
Environmental Law.
"HAZARDOUS SUBSTANCES" shall mean any pollutant, contaminant,
hazardous material, hazardous waste, infectious medical waste,
hazardous or toxic substance defined or regulated as such in or under
any Environmental Law.
"PROSPECTUS" shall mean the Base Prospectus as supplemented by
the Prospectus Supplement.
"PROSPECTUS SUPPLEMENT" shall mean the prospectus supplement
to the Base Prospectus specifically relating to the Securities in the
form first used by the Underwriters to confirm sales.
23
"REGISTRATION STATEMENT" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"RULE 424," "RULE 430A" and "RULE 462" refer to such rules
under the Act.
"RULE 430A INFORMATION" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"RULE 462(b) REGISTRATION STATEMENT" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
"SHELF SECURITIES" shall mean certain securities to be issued
from time to time by the Company pursuant to the Registration
Statement, including the Securities.
[SIGNATURE PAGE FOLLOWS]
24
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate
hereof, whereupon this letter and your acceptance shall represent a
binding agreement among the Company and the several Underwriters.
Very truly yours,
UNITED DOMINION REALTY TRUST, INC.
By: /s/ CHRISTOPHER D. GENRY
--------------------------------------------
Name: Christopher D. Genry
Title: Executive Vice President and Chief
Financial Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
WACHOVIA CAPITAL MARKETS, LLC
By: /s/ J. BRIT STEPHENS
----------------------------------
Name: J. Brit Stephens
Title: Managing Director
For itself and the other several Underwriters, if any, named in Schedule I to
the foregoing Agreement.
25
EXHIBIT A
United Dominion Realty Trust, Inc.
Public Offering of Common Stock
September ___, 2003
Wachovia Capital Markets, LLC
7 St. Paul Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "UNDERWRITING AGREEMENT") between United Dominion
Realty Trust, Inc., a Maryland corporation (the "COMPANY"), and you as
representative of the underwriter or underwriters named therein (the
"Underwriters"), relating to an underwritten public offering of Common Stock,
$1.00 par value (the "COMMON STOCK"), of the Company.
In order to induce you and the other Underwriters, if any, to enter
into the Underwriting Agreement, the undersigned agrees that the undersigned
will not, without the prior written consent of Wachovia Capital Markets, LLC,
sell, offer or contract to sell, solicit offers to purchase, pledge or otherwise
dispose of, (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period beginning on and
including the date of the Underwriting Agreement through and including the date
which is 30 days after the date of the Underwriting Agreement. Notwithstanding
the foregoing, the undersigned may transfer any or all of the shares of Common
Stock or any securities convertible into or exchangeable or exercisable for
Common Stock owned by the undersigned, either during his or her lifetime or on
death, by gift, will or intestate succession, to members of his or her immediate
family or to a trust the beneficiaries of which are exclusively the undersigned
and/or a member or members of his or her immediate family; provided, however,
that in any such transfer, it shall be a condition to such transfer that, prior
to the transfer, the transferee execute and deliver to Wachovia Capital Markets,
LLC an agreement stating that the transferee is receiving and holding the shares
of Common Stock or other securities, as the case may be, subject to, and the
transferee agrees to be bound by, the provisions of this letter agreement, and
there shall be no further transfer of such shares of Common Stock or other
securities, as the case may be, except in accordance with this letter agreement.
Notwithstanding the foregoing provisions of this letter agreement, the
undersigned will be permitted to sell a total of not more than 70,000 shares of
Common Stock so long as such shares are sold as part of a "cashless exercise"
pursuant to which (a) such shares are issued upon the exercise of options to
purchase Common Stock granted by the Company to the undersigned and thereafter
such shares are sold for cash and (b) the proceeds from such sales are applied
solely to pay the exercise price of other outstanding options to purchase Common
Stock granted by the Company to the undersigned or to satisfy withholding tax
obligations in connection with the option exercises referred to in this clause
(b) or in clause (a) of this sentence; provided, however, that, anything in this
letter agreement to the contrary notwithstanding, the undersigned shall not be
entitled to sell any shares of Common Stock pursuant to this paragraph to the
extent that (x) the number of shares of Common Stock to be sold by the
undersigned pursuant to this paragraph, plus (y) the total number of shares of
Common Stock previously sold by the undersigned pursuant to this paragraph, plus
(z) the total number of shares of Common Stock sold pursuant to the
corresponding paragraph of the similar letter agreements entered into by other
officers and directors of the Company pursuant to the Underwriting Agreement
would exceed 1,000,000 shares. For the avoidance of doubt, it is hereby
understood and agreed by the undersigned that the sum of the total number of
shares of Common Stock sold by the undersigned pursuant to this paragraph plus
the total number of shares of Common Stock sold by such other officers and
directors pursuant to the corresponding paragraph of such other letter
agreements shall in no event exceed 1,000,000 shares of Common Stock.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), this agreement
shall likewise be terminated.
This agreement shall be governed by and construed in accordance with
the laws of the State of New York.
[SIGNATURE PAGE FOLLOWS]
2
Yours very truly,
__________________________________________
Print Name:
3
EXHIBIT B
SIGNIFICANT SUBSIDIARIES
United Dominion Realty L.P.
Heritage Communities L.P.
EXHIBIT C
OFFICERS AND DIRECTORS PROVIDING LOCK-UP LETTERS
John P. McCann
Jon A. Grove
Thomas W. Toomey
Mark J. Sandler
Thomas R. Oliver
W. Mark Wallis
Christopher D. Genry
Ella S. Neyland
Robert W. Scharar
James D. Klingbeil
Robert P. Freeman
Lynne B. Sagalyn
Robert C. Larson
Eric J. Foss
Scott A. Shanaberger
EXHIBIT D
FORM OF OPINION OF MORRISON & FOERSTER
(a) Each of the Company and United Dominion Realty, L.P. and
Heritage Communities L.P. (the "Subsidiaries") has been duly incorporated or
formed, as applicable, and is validly existing as a corporation or limited
partnership, as the case may be, in good standing under the laws of the
jurisdiction in which it is incorporated or formed, as applicable, with full
corporate or partnership, as applicable, power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business as
described in the Prospectus.
(b) The Company is duly qualified as a foreign corporation and
authorized to transact business as a foreign corporation in the states of
Arizona, Colorado, Delaware, Florida, Georgia, North Carolina, Ohio, Oregon,
South Carolina and Tennessee and Virginia. United Dominion Realty, L.P. is duly
qualified as a foreign limited partnership and authorized to transact business
as a foreign limited partnership in the States of California, Georgia, Maryland,
Ohio, Oregon and Tennessee. Heritage Communities L.P. is duly qualified as a
foreign limited partnership and authorized to transact business as a foreign
limited partnership in the State of Arizona.
(c) The Company owns a general partnership interest in each
Subsidiary. The Company has a 93.7% partnership interest in United Dominion
Realty, L.P. and a 89.2% partnership interest in Heritage Communities L.P.
(d) The Company's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus; all of the
outstanding shares of the Company's Common Stock and Preferred Stock have been
duly authorized and validly issued and are fully paid and non-assessable, and
none of such shares was issued in violation of any preemptive rights; the
Securities have been duly authorized for issuance and sale to the Underwriters
pursuant to the Underwriting Agreement and, upon delivery to the Underwriters
against payment therefor in accordance with the terms of the Underwriting
Agreement, will be validly issued, fully paid and nonassessable; the Securities
are duly listed, and admitted and authorized for trading, subject to official
notice of issuance, on the New York Stock Exchange; the certificates for the
Securities are in valid and sufficient form; and the issuance of the Securities
is not subject to preemptive rights.
(e) To our knowledge, there is no pending or threatened action,
suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of the Subsidiaries or its
or their property of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus, and there is no
franchise, contract or other document known to us of a character required to be
described in the Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required; and the statements
included or incorporated by reference in the Prospectus Supplement under the
heading "Description of Common Stock" and in the Prospectus under the heading
"Description of Preferred Stock," insofar as such statements constitute matters
of law or legal conclusions or descriptions of the terms of the Common Stock,
any series of Preferred
1
Stock or the Company's charter, bylaws, or shareholder rights plan, are correct
in all material respects and correctly presents the information called for with
respect to such documents and matters in all material respects.
(f) The Registration Statement has become effective under the Act;
any required filings of the Prospectus, and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the time period required by
Rule 424(b); to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that purpose have
been instituted or threatened and the Registration Statement and the Prospectus
(other than the financial statements (including notes thereto), supporting
schedules and other financial and statistical information contained therein, as
to which we express no opinion) as of their respective effective or issue dates
complied as to form in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder.
(g) Each document filed pursuant to the Exchange Act (other than
the financial statements (including notes thereto), supporting schedules and
other financial and statistical information contained therein, as to which we
express no opinion) 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 Exchange Act and the rules thereunder.
(h) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
(i) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940, as amended.
(j) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with the
transactions contemplated by the Underwriting Agreement, except such as have
been obtained under the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated in the Underwriting
Agreement and in the Prospectus and such other approvals (which shall be
identified in such opinion) as have been obtained.
(k) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions contemplated in the Underwriting
Agreement will (i) to our knowledge, result in an imposition of any lien, charge
or encumbrance upon any property or assets of the Company or, to our knowledge,
its subsidiaries, (ii) result in a violation of the charter or by-laws or other
organizational documents of the Company or the Subsidiaries, (iii) to our
knowledge, constitute a material breach of the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the Company or
its subsidiaries is a party or bound or to which its or their property is
subject and which has been filed as an exhibit to any of the Company's filings
made pursuant to the Exchange Act and incorporated by reference in the
Prospectus, or (iv) to our knowledge, violate any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or its
subsidiaries of any court, regulatory body, administrative agency, governmental
body,
2
arbitrator or other authority of the State of Maryland, the Commonwealth of
Virginia or the United States of America having jurisdiction over the Company or
its subsidiaries or any of its or their properties.
(l) To our knowledge, no holders of securities of the Company have
rights to the registration of such securities under the Registration Statement.
(m) The Company has been organized and has operated in conformity
with the requirements for qualification and taxation as a REIT under the Code
for each of its taxable years beginning with the taxable year ended December 31,
1999 through its taxable year ended December 31, 2002, and its current
organization and current and proposed method of operation will enable it to
continue to meet the requirements for qualification and taxation as a REIT for
the taxable year ending December 31, 2003 and thereafter.
(n) Each of the Subsidiaries is and has been properly treated as a
partnership for federal income tax purposes and not as a corporation or as an
association or publicly traded partnership taxable as a corporation, throughout
the period from the later of its formation or January 1, 1999 through the date
of this opinion.
(o) We have reviewed the statements included or incorporated by
reference in the Prospectus Supplement under the heading "Federal Income Tax
Considerations," and in the Prospectus under the heading "Federal Income Tax
Considerations" (as modified by the Prospectus Supplement), and, insofar as such
statements pertain to matters of law or legal conclusions, they are correct in
all material respects.
In addition, we have participated in conferences with your
representatives and with representatives of the Company and its accountants
concerning the Registration Statement and the Prospectus and have considered the
matters required to be stated therein and the statements contained therein,
although we have not independently verified the accuracy, completeness or
fairness of such statements. Based upon and subject to the foregoing, nothing
has come to our attention that leads us to believe that the Registration
Statement, at the time of the filing of the Company's Annual Report on Form 10-K
for the year ended December 31, 2002 with the Commission, 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, as of the date of the Prospectus Supplement or as the date
of this opinion, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that we have not
been requested to and do not make any comment in this paragraph with respect to
the financial statements (including notes thereto), supporting schedules and
other financial and statistical information contained in the Registration
Statement or Prospectus or any amendments or supplements thereto).
Such opinion shall state that such counsel expresses no opinion as to
matters governed by the laws of any jurisdiction other than the substantive laws
of the State of Maryland and the Commonwealth of Virginia and the federal laws
of the United States of America.
3
Capitalized terms used in this Exhibit and not defined have the
respective meanings ascribed thereto in the Underwriting Agreement to which this
Exhibit is attached.
4
SCHEDULE I
Number of Firm Securities
Underwriter to be Purchased
- ---------------------------------------------------------------------------------------
Wachovia Capital Markets, LLC.................... 4,000,000
---------
Total................................... 4,000,000
=========
Sch. I-1