Exhibit 1.01
UDR, INC.
Medium-Term Notes, Series A
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
March 20, 2007
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J.P. Morgan Securities Inc.
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Banc of America Securities LLC
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270 Park Avenue, 8th Floor
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Hearst Tower
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New York, New York 10017
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214 North Tryon Street
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Charlotte, North Carolina 28255
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Citigroup Global Markets Inc.
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Goldman, Sachs & Co.
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388 Greenwich Street
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85 Broad Street
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New York, New York 10013
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New York, New York 10004
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McDonald Investments Inc.
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Morgan Stanley & Co. Incorporated
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127 Public Square
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1585 Broadway
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Cleveland, Ohio 44114
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New York, New York 10036
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SunTrust Capital Markets, Inc.
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Wachovia Capital Markets, LLC
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303 Peachtree Street
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301 S. College St., NC0600
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23rd Floor, MC 3947
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Charlotte, North Carolina 28288
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Atlanta, Georgia 30308
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Wells Fargo Securities, LLC
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600 California Street, Suite 1600
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San Francisco, California 94108
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Ladies and Gentlemen:
UDR, Inc., a Maryland corporation (the Company), confirms its agreement with J.P. Morgan
Securities Inc., Banc of America Securities LLC, Citigroup Global Markets Inc., Goldman, Sachs &
Co., McDonald Investments Inc., Morgan Stanley & Co. Incorporated, SunTrust Capital Markets, Inc.,
Wachovia Capital Markets, LLC and Wells Fargo Securities, LLC (each, an Agent, and together, the
Agents) with respect to the issue and sale by the Company of its Medium-Term Notes, Series A Due
Nine Months or More From Date of Issue (the Notes). The Notes are to be issued pursuant to an
Indenture, dated as of November 1, 1995, as amended, supplemented or modified from time to time
(the Indenture), between the Company (successor by merger to United Dominion Realty Trust, Inc.,
a Virginia corporation) and U.S. Bank National Association, successor trustee to Wachovia Bank,
National Association (formerly known as First Union National Bank of Virginia), as trustee (the
Trustee).
United Dominion Realty, L.P., a Delaware limited partnership (the Operating Partnership),
and Heritage Communities L.P., a Delaware limited partnership (Heritage OP), are hereinafter
referred to collectively as the Operating Entities and individually referred to as
an Operating Entity. All references herein to any subsidiary or subsidiaries of the
Company shall be deemed to include the Operating Entities unless otherwise expressly stated.
This Agreement provides both for the sale of Notes by the Company to one or more Agents as
principal for resale to investors and other purchasers and for the sale of Notes by the Company
directly to investors (as may from time to time be agreed to by the Company and the applicable
Agent), in which case such Agent will act as an agent of the Company in soliciting purchases of the
Notes.
The Company has filed with the Securities and Exchange Commission (the Commission) an
automatic shelf registration statement on Form S-3 (No. 333-131278) which provides for the
registration of securities (including the Notes) under the Securities Act of 1933, as amended (the
1933 Act), and the offering thereof from time to time in accordance with Rule 415 of the rules
and regulations of the Commission under the 1933 Act (the 1933 Act Regulations), and the Company
has filed such post-effective amendments thereto as may have been required prior to the Companys
acceptance of an offer to purchase Notes. Such registration statement (as so amended, if
applicable), including any document incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the 1934 Act), and any prospectus, prospectus supplement and/or
pricing supplement deemed or retroactively deemed to be a part thereof that has not been superseded
or modified is referred to herein as the Registration Statement. Registration Statement
without reference to a time means the Registration Statement as of the time of the first contract
of sale of any issue of Notes, which time shall be considered the effective date of the
Registration Statement with respect to such Notes. For purposes of the definition of Registration
Statement as used herein, information contained in a form of prospectus, prospectus supplement or
pricing supplement that is deemed retroactively to be a part of the Registration Statement pursuant
to Rule 430B of the 1933 Act Regulations (Rule 430B) shall be considered to be included in the
Registration Statement at the time specified in Rule 430B. The prospectus supplement relating to
the series of Notes and the base prospectus and all applicable amendments or supplements thereto,
in each case immediately prior to the Applicable Time (as defined in the applicable Terms
Agreement), including any document incorporated by reference therein, is herein called the
Statutory Prospectus. The Prospectus means the Statutory Prospectus and the final pricing
supplement in the form first filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations (Rule 424(b)) that discloses the public offering price and other final terms of the
Notes of any issue and otherwise satisfies Section 10(a) of the 1933 Act. A preliminary
prospectus shall be deemed to refer to any prospectus, any prospectus supplement and any pricing
supplement used before the acceptance by the Company of an offer for the purchase of Notes which
omitted information to be included upon pricing in a form of prospectus filed with the Commission
pursuant to Rule 424(b). For purposes of this Agreement, all references to the Registration
Statement, Statutory Prospectus, Prospectus or preliminary prospectus or to any amendment or
supplement thereto shall be deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system (EDGAR).
All references in this Agreement to financial statements and schedules and other information
which is disclosed, contained, included or stated (or other references of like import) in
the Registration Statement, Statutory Prospectus, Prospectus or preliminary prospectus
shall be deemed to include all such financial statements and schedules and other information
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which is incorporated by reference in or otherwise deemed by the 1933 Act Regulations to be a part
of or included in the Registration Statement, Statutory Prospectus, Prospectus or preliminary
prospectus, as the case may be; and all references in this Agreement to amendments or supplements
to the Registration Statement, Statutory Prospectus, Prospectus or preliminary prospectus shall be
deemed to include the filing of any document under the 1934 Act which is incorporated by reference
in or otherwise deemed by the 1933 Act Regulations to be a part of or included in the Registration
Statement, Statutory Prospectus, Prospectus or preliminary prospectus, as the case may be.
SECTION 1.
Appointment as Agents
.
(a)
Appointment
. Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly on its own behalf, the Company
hereby agrees that Notes will be sold to or through the Agents. Notwithstanding any provision
herein to the contrary, the Company reserves the right to appoint additional agents for the offer
and sale of Notes, which agency may be on an on-going basis or on a one-time basis. Any such
additional agent shall become a party to this Agreement and shall thereafter be subject to the
provisions hereof and entitled to the benefits hereunder upon the execution of a counterpart hereof
or other form of acknowledgement of its appointment hereunder, including the form of letter
attached hereto as Exhibit B, and delivery to the Company of addresses for notice hereunder and
under the Procedures.
(b)
Sale of Notes
. The Company shall not sell or approve the solicitation of
purchases of Notes in excess of the amount which shall be authorized by the Company from time to
time. The Agents shall have no responsibility for maintaining records with respect to the
aggregate initial offering price of Notes sold, or of otherwise monitoring the availability of
Notes for sale, under the Registration Statement.
(c)
Purchases as Principal
. The Agents shall not have any obligation to purchase
Notes from the Company as principal, but one or more Agents may agree from time to time to purchase
Notes as principal for resale to investors and other purchasers determined by such Agent or Agents.
Any such purchase of Notes from the Company by an Agent as principal shall be made in accordance
with Section 3(a) hereof.
(d)
Solicitations as Agents
. If agreed upon by an Agent and the Company, such Agent,
acting solely as agent for the Company and not as principal, will solicit purchases of the Notes.
Unless otherwise instructed by the Company, such Agent will communicate to the Company, orally,
each offer to purchase Notes solicited by it on an agency basis other than those offers rejected by
such Agent. Such Agent shall have the right, in its discretion reasonably exercised, to reject any
proposed purchase of Notes, as a whole or in part, and any such rejection shall not be deemed a
breach of its agreement contained herein. The Company may accept or reject any proposed purchase
of Notes, in whole or in part. Such Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Notes has been solicited by it and
accepted by the Company. Such Agent shall not have any liability to the Company in the event that
any such purchase is not consummated for
any reason. If the Company shall default on its obligation to deliver Notes to a purchaser
whose offer it has accepted, the Company shall (i) hold such Agent harmless against any loss, claim
or
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damage arising from or as a result of such default by the Company and (ii) pay to such Agent any
commission to which it would otherwise be entitled absent such default.
(e)
Reliance
. The Company and the Agents agree that any Notes purchased from the
Company by one or more Agents as principal shall be purchased, and any Notes the placement of which
an Agent arranges as agent of the Company shall be placed by such Agent, in reliance on the
representations, warranties, covenants and agreements of the Company contained herein and on the
terms and conditions and in the manner provided herein.
SECTION 2.
Representations and Warranties
.
(a) The Company represents and warrants to each Agent as of the date hereof, as of the date of
the effectiveness of any amendment to the Registration Statement (including the filing of any
document incorporated by reference therein), as of the date of any supplement to the Prospectus, as
of the Applicable Time and as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to such Agent as
principal is referred to herein as the Settlement Date) (each of the times referred to above
shall be a Representation Date), as follows:
(i)
Due Incorporation and Qualification
. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of the State of
Maryland, with full power and authority to own, lease and operate its properties and conduct
its business as described in the General Disclosure Package (as defined below) and the
Prospectus; and the Company is duly qualified to transact business in all jurisdictions in
which the conduct of its business requires such qualification except where the failure to so
qualify would not have a material adverse effect on the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company and its subsidiaries,
taken as a whole.
(ii)
Subsidiaries
. Each subsidiary of the Company has been duly organized and
is validly existing as a corporation, limited liability company, limited partnership,
general partnership or real estate investment trust, as the case may be, in good standing
under the laws of the jurisdiction of its incorporation or organization, with power and
authority to own, lease and operate its properties and conduct its business as described in
the General Disclosure Package and the Prospectus and is duly qualified to transact business
in all jurisdictions in which the conduct of its business requires such qualification except
where the failure to so be in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise; each Operating Entity is
duly qualified to transact business in all jurisdictions in which the conduct of its
business requires such qualification, or in which the failure to qualify would have a
materially adverse effect upon the business of such Operating Entity; all of the issued and
outstanding shares of capital stock of each such corporate subsidiary and all of the issued
and outstanding shares of beneficial interest of each such real estate
investment trust subsidiary have been duly authorized and validly issued, are fully
paid and non-assessable and are owned by the Company or a subsidiary of the Company, free
and clear of any perfected security interest, mortgage, pledge, lien, encumbrance, claim
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or
equity; all of the issued and outstanding partnership interests of each such partnership
subsidiary and all of the issued and outstanding limited liability company interests of each
such 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, are owned by the Company and/or one or more
subsidiaries of the Company, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; and the Company and/or one or more subsidiaries of the
Company are the only members or general partners of the Companys 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, mortgage, pledge, lien, encumbrance, claim or equity.
(iii)
Registration Statement and Prospectus
. (A) At the time of filing the
Registration Statement, (B) at the time of the most recent amendment thereto for the
purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the
1934 Act or form of prospectus), (C) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c) of the 1933 Act Regulations
(Rule 163(c))) made any offer relating to the Notes in reliance on the exemption of Rule
163 of the 1933 Act Regulations and (D) at the date hereof, the Company was and is a
well-known seasoned issuer as defined in Rule 405 of the 1933 Act Regulations (Rule
405), including not having been and not being an ineligible issuer as defined in Rule
405. The Registration Statement is an automatic shelf registration statement, as defined
in Rule 405, and the Notes, since their registration on the Registration Statement, have
been and remain eligible for registration by the Company on a Rule 405 automatic shelf
registration statement. The Company has not received from the Commission any notice
pursuant to Rule 401(g)(2) of the 1933 Act Regulations objecting to the use of the automatic
shelf registration statement form. At the time of filing the Registration Statement, at the
earliest time thereafter that the Company or any other offering participant made a
bona fide
offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Notes and at
the date hereof, the Company neither was nor is an ineligible issuer, as defined in Rule
405, including (x) the Company or any of its subsidiaries in the preceding three years not
having been convicted of a felony or misdemeanor or having been made the subject of a
judicial or administrative decree or order as described in Rule 405 and (y) the Company in
the preceding three years not having been the subject of a bankruptcy petition or insolvency
or similar proceeding, not having had a registration statement be the subject of a
proceeding under Section 8 of the 1933 Act and not being the subject of a proceeding under
Section 8A of the 1933 Act in connection with the offering of the Notes, all as described in
Rule 405.
The Registration Statement became effective upon filing under Rule 462(e) of the 1933
Act Regulations (Rule 462(e)) on January 25, 2006, and any post-effective amendment
thereto also became effective upon filing under Rule 462(e). No stop order suspending the
effectiveness of the Registration Statement, or notice objecting to its use, has been issued
under the 1933 Act and no proceedings for that purpose have been
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instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission, and any request on
the part of the Commission for additional information has been complied with; the Indenture
has been duly qualified under the Trust Indenture Act of 1939 as amended (the 1939 Act);
at the respective times that the Registration Statement and any post-effective amendment
thereto (including the filing of the Companys most recent Annual Report on Form 10-K with
the Commission (the Annual Report on Form 10-K)) became effective, at each deemed
effective date with respect to the Agents pursuant to Rule 430B(f)(2) of the 1933 Act
Regulations and at the date hereof, the Registration Statement and any amendments thereto
complied in all material respects with the requirements of the 1933 Act, the 1933 Act
Regulations, the 1939 Act and the rules and regulations of the Commission under the 1939 Act
(the 1939 Act Regulations) and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; each preliminary prospectus and the Statutory
Prospectus filed as part of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act Regulations, complied
when so filed in all material respects with the 1933 Act Regulations; each preliminary
prospectus and the Statutory Prospectus delivered to the applicable Agent(s) for use in
connection with the offering of Notes are identical to any electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T; and at the date hereof, at the date of the Statutory Prospectus and at each
Representation Date, neither the Statutory Prospectus nor any amendment or supplement
thereto included or will include an untrue statement of a material fact or omitted or will
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.
Any offer that is a written communication as defined in Rule 405 relating to the
Notes made prior to the filing of the Registration Statement by the Company or any person
acting on its behalf (within the meaning, for this paragraph only, of Rule 163(c)) has been
filed with the Commission in accordance with the exemption provided by Rule 163 and
otherwise complied with the requirements of Rule 163, including without limitation the
legending requirement, to qualify such offer for the exemption from Section 5(c) of the 1933
Act provided by Rule 163.
As of the Applicable Time with respect to the offering of any applicable issue of
Notes, the Issuer Free Writing Prospectus(es) (as defined below) and the Statutory
Prospectus, relating to the offering of the Notes, all considered together (collectively,
the General Disclosure Package) will not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
As used in this subsection and elsewhere in this Agreement:
Issuer Free Writing Prospectus means any issuer free writing prospectus, as defined
in Rule 433 under the 1933 Act, relating to any issue of Notes in the form filed or required
to be filed with the Commission or, if not required to be filed, in the form
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retained in the
Companys records pursuant to Rule 433(g) and identified in the applicable Terms Agreement.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Notes or until any earlier date
that the Company notified or notifies the Agents as described in Section 3(b), will not
include any information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement or the Prospectus, including any document
incorporated by reference therein and any preliminary or other prospectus deemed to be a
part thereof that has not been superseded or modified.
The representations and warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement, the Prospectus or any Issuer Free Writing
Prospectus (x) contained in that part of the Registration Statement which shall constitute
the Statement of Eligibility on Form T-1 under the 1939 Act of the Trustee and (y) made in
reliance upon and in conformity with information furnished to the Company in writing by the
Agents expressly for use therein.
(iv)
Incorporated Documents
. The documents incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules
and regulations of the Commission thereunder, and do not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
(v)
Accountants
. The accountants who certified the financial statements
included or incorporated by reference in the Registration Statement are independent public
accountants within the meaning of the 1933 Act and the 1933 Act Regulations.
(vi)
Financial Statements
. 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 included or
incorporated by reference in the Registration Statement, the General Disclosure Package and
the Prospectus, present fairly, or (in the case of any amendment or supplement to any such
document, or any material incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being made) will present
fairly, at all times during the effectiveness of this Agreement, the financial condition 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 1934 Act and the rules and regulations of the Commission thereunder, certain footnotes
have been omitted from the financial statements included in the Companys Quarterly Reports
on Form 10-Q incorporated by reference in the Registration Statement, the
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General Disclosure
Package and the Prospectus). The summary financial and statistical data included or
incorporated by reference in the Registration Statement, the General Disclosure Package 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 included or incorporated by reference in the
Registration Statement, the General Disclosure Package and Prospectus present fairly the
information shown therein, have been prepared in accordance with the Commissions 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. All disclosures contained in the
Registration Statement, the General Disclosure Package or the Prospectus regarding non-GAAP
financial measures (as such term is defined by the 1933 Act Regulations of the Commission)
comply with Regulation G under the 1934 Act and Item 10 of Regulation S-K of the 1933 Act
Regulations, to the extent applicable.
(vii)
Validity of this Agreement
. This Agreement has been duly authorized,
executed and delivered by the Company.
(viii)
Authorization and Validity of the Indenture
. The Indenture has been
duly authorized and duly qualified under the 1939 Act, and, at each Representation Date,
will constitute a valid and legally binding instrument, 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 generally and to general
equity principles, and except further as enforcement thereof may be limited by (1)
requirements that a claim with respect to any Notes payable other than in U.S. dollars (or a
foreign currency or composite currency judgment in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable
law or (2) governmental authority to limit, delay or prohibit the making of payments outside
the United States.
(ix)
Authorization and Validity of the Notes
. The Notes have been duly and
validly authorized for issuance, offer and sale pursuant to this Agreement and, when issued,
authenticated and delivered pursuant to the provisions of this Agreement and the Indenture
against payment of the consideration therefor, the Notes will constitute valid and legally
binding obligations of the Company enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting enforcement of creditors rights generally or by general
equity principles, and except further as enforcement thereof may be limited by (1)
requirements that a claim with respect to any Notes payable other than in U.S. dollars (or a
foreign currency or composite currency
judgment in respect of such claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or (2) governmental authority to
limit, delay or prohibit the making of payments outside the United States; the Notes and the
Indenture will be substantially in the form heretofore delivered to the Agents and will
conform in all material respects to all statements relating thereto contained in the
Prospectus; and each holder of Notes will be entitled to the benefits of the Indenture.
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(x)
No Conflicts
. The issue and sale of the Notes and the compliance by the
Company with all of the provisions of the Notes, the Indenture, this Agreement, and the
consummation of the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries 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), nor
will such action result in any violation of the provisions of the Amended and Restated
Articles of Restatement or bylaws of the Company, or any law, statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Notes or the
consummation by the Company of the transactions contemplated by this Agreement or the
Indenture, except such as have been, or will have been prior to each Representation Date,
obtained under the 1933 Act and the 1939 Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Notes by the Agents.
(xi)
Material Changes or Material Transactions
. 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 Registration Statement, the General Disclosure
Package or 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 or governmental action, order or decree, otherwise than as set forth or
contemplated therein; and, since the respective dates as of which information is given in
the Registration Statement, the General Disclosure Package and Prospectus, (i) 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 therein and (ii) 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.
(xii)
No Defaults
. Neither the Company nor any of its subsidiaries is in
violation of its Amended and Restated Articles of Restatement or bylaws, limited partnership
agreement, limited liability company agreement, operating agreement or other organizational
documents or in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or by which it or
any of them may be bound.
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(xiii)
Legal Proceedings
. Other than as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future consolidated financial
position, shareholders equity or results of operations of the Company and its subsidiaries;
and, to the best of the Companys knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(xiv)
Licenses; Trademarks
. The Company and each of its subsidiaries hold all
material licenses, certificates and permits from governmental authorities which are
necessary to the conduct of their respective businesses; and to their knowledge, neither the
Company nor any of its subsidiaries has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the business of the Company or
any of its subsidiaries.
(xv)
Marketable Title; Leasehold Estates
. Except as described in the
Registration Statement, the General Disclosure Package and Prospectus, the Company and its
subsidiaries have good and marketable title to, or valid and enforceable leasehold estates
in, all items of real and personal property referred to therein as owned or leased by them,
in each case free and clear of all liens, encumbrances, claims, security interests and
defects, other than those referred to therein or which would not materially affect the value
thereof or materially interfere with the use made or to be made by them.
(xvi)
Hazardous Material
. The Company has no knowledge of (1) the unlawful
presence of any hazardous substances, hazardous materials, toxic substances or waste
materials (collectively, Hazardous Materials) on any of the properties owned by it or any
of its subsidiaries, or of (2) any unlawful spills, releases, discharges or disposal of
Hazardous Materials that have occurred or are presently occurring off such properties as a
result of any construction on or operation and use of such properties which presence or
occurrence would materially adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its subsidiaries, taken
as a whole. In connection with the construction on or operation and use of the properties
owned by the Company or any of its subsidiaries, the Company represents that it has no
knowledge of any material failure to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and judicial
orders relating to the generation, recycling, reuse, sale, storage, handling, transport
and disposal of any Hazardous Materials.
(xvii)
Tax Filings
. The Company has filed all U.S. Federal, local and foreign
income tax returns which have been required to be filed or has filed extensions and has paid
all taxes indicated by said returns and all assessments received by it to the extent that
such taxes have become due and are not being contested in good faith, except in each case to
the extent that the failure to so file or so pay would not materially adversely affect the
condition, financial or otherwise, or the earnings, business affairs or business prospects
of the Company or any of its subsidiaries.
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(xviii)
Statements in Statutory Prospectus
. The statements set forth in the
Statutory Prospectus as amended or supplemented under the captions Description of Debt
Securities and Description of Notes, insofar as they purport to constitute a summary of
the terms of the Notes, and under the captions U.S. Federal Income Tax Considerations and
Plan of Distribution, insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in all material respects.
(xix)
Disclosure Controls and Procedures
. The Company has established and
maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 and
15d-15 under the 1934 Act) that (A) are designed to ensure that material information
relating to the Company and its consolidated subsidiaries, is made known to the Companys
Chief Executive Officer and its Chief Financial Officer by others within those entities,
particularly during the periods in which the filings made by the Company with the Commission
which it may make under Section 13(a), 13(c) or 15(d) of the 1934 Act are being prepared,
(B) have been evaluated for effectiveness as of the end of the Companys most recent fiscal
year and (C) to their knowledge are effective to perform the functions for which they were
established.
(xx)
Accounting Controls and Procedures
. The Company has established and
maintains internal control over financial reporting (as such term is defined in Rule
13a-15 and 15d-15 under the 1934 Act) that (A) provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and (B) have been
evaluated by the management of the Company (including the Companys Chief Executive Officer
and Chief Financial Officer) for effectiveness as of the end of the Companys most recent
fiscal year. In addition, not later than the date of the filing with the Commission of the
Companys (or if filed, Guarantors) most recent Annual Report on Form 10-K, each of the
accountants and the audit committee of the board of directors of the Company had been
advised of (x) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely to
adversely affect the Companys ability to record, process, summarize and report financial
information and (y) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Companys internal control over financial
reporting.
(xxi)
Compliance with the Sarbanes-Oxley Act
. There is and has been no failure
on the part of the Company or any of the Companys directors or officers, in their
capacities as such, to comply in all material respects with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith
(the Sarbanes-Oxley Act), including Section 402 related to loans and Sections 302 and 906
related to certifications.
(xxii)
No Advisory or Fiduciary Relationship
. The Company acknowledges and
agrees that (A) any purchase and sale of Notes pursuant to this Agreement, including the
determination of the public offering price of the Notes and any related discounts and
commissions, is an arms-length commercial transaction between the Company, on the
11
one hand,
and the Agent(s), on the other hand, (B) in connection with any offering contemplated hereby
and the process leading to each such transaction each Agent is and has been acting solely as
a principal and is not the agent or fiduciary of the Company or its stockholders, creditors,
employees or any other party, (C) no Agent has assumed or will assume an advisory or
fiduciary responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Agent has advised or is
currently advising the Company on other matters) and no Agent has any obligation to the
Company with respect to the offering contemplated hereby except the obligations expressly
set forth in this Agreement, (D) the Agent(s) and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from those of the
Company, and (E) the Agent(s) have not provided any legal, accounting, regulatory or tax
advice with respect to the offering contemplated hereby and the Company has consulted its
own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
(xxiii)
REIT Qualification
. With respect to all tax periods regarding which
the Internal Revenue Service is or will be entitled to assert any claim, the Company has met
the requirements for qualification as a real estate investment trust under Sections 856
through 860 of the Internal Revenue Code of 1986, as amended (the Code), and the Companys
present and contemplated operations, assets and income continue to meet such requirements.
(xxiv)
Investment Company Act
. The Company is not and, after giving effect to
the offering and sale of the Notes as contemplated herein, will not be an investment
company or an entity controlled by an investment company as such terms are defined in
the Investment Company Act of 1940, as amended (the 1940 Act).
(xxv)
Commodity Exchange Act
. The Notes, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the Indenture, will be excluded
or exempted under the provisions of the Commodity Exchange Act.
(xxvi)
Ratings
. The Notes are rated Baa2 by Moodys Investors Service, Inc.
and BBB by Standard & Poors Rating Services.
(xxvii)
Significant Subsidiaries
. The Operating Entities are the only
Significant Subsidiaries of the Company (as defined in Regulation S-X of the 1933 Act
Regulations).
(b)
Additional Certifications
. Any certificate signed by any director or officer of
the Company and delivered to one or more Agents or to counsel for the Agents in connection with an
offering of Notes to one or more Agents as principal or through an Agent as agent shall be deemed a
representation and warranty by the Company to such Agent or Agents as to the matters covered
thereby on the date of such certificate and at each Representation Date subsequent thereto.
SECTION 3.
Purchases as Principal; Solicitations as Agent
.
12
(a)
Purchases as Principal
. Subject to the terms and conditions stated herein, the
Company agrees that, whenever the Company determines to sell Notes directly to any Agent as
principal for resale to others, it will enter into a separate agreement relating to such sale in
accordance with the provisions of this Section 3(a).
Each sale of Notes to an Agent shall be made in accordance with the terms of this Agreement
and the Procedures (as defined in Section 3(c) below) and a supplemental agreement which will
provide for the sale of such Notes to, and the purchase and reoffering thereof by, an Agent. Each
such supplemental agreement (which may be an oral agreement and confirmed in writing between an
Agent and the Company) is herein referred to as a Terms Agreement. Each such Terms Agreement,
whether oral (and confirmed in writing, which may be by facsimile transmission) or in writing,
shall be with respect to such information (as applicable) as is specified in Exhibit A hereto. An
Agents commitment to purchase Notes shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth.
Delivery of the certificates for Notes sold to a Purchaser pursuant to any Terms Agreement
shall be made as agreed to between the Company and the Purchaser as set forth in the respective
Terms Agreement, not later than the Purchase Date set forth in such Terms Agreement, against
payment of funds to the Company in the net amount due to the Company for such Notes by the method
and in the form set forth in the respective Terms Agreement.
Unless the context otherwise requires, references herein to this Agreement shall include the
applicable agreement of one or more Agents to purchase Notes from the Company as principal. Each
purchase of Notes, unless otherwise agreed, shall be at a discount from the principal amount of
each such Note equivalent to the applicable commission set forth in Schedule A hereto. The Agents
may engage the services of any other broker or dealer in connection with the resale of the Notes
purchased by them as principal and may allow all or any portion of the discount received in
connection with such purchases from the Company to such brokers and dealers. At the time of each
purchase of Notes from the Company by one or more Agents as principal, such Agent or Agents shall
specify the requirements for the stand-off agreement, officers certificate, opinions of counsel
and comfort letter pursuant to Sections 4(j), 7(b), 7(c) and 7(d) respectively hereof.
(b)
Solicitations as Agent
. On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, when agreed by the Company and
an Agent, such Agent, as an agent of the Company, will use its reasonable efforts to solicit offers
to purchase the Notes upon the terms and conditions set forth in the Prospectus. The Agents are
not authorized to appoint sub-agents with respect to Notes sold through them as agent. All Notes
sold through an Agent as agent will be sold at 100% of their principal amount unless otherwise
agreed to by the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend solicitation of purchases
of the Notes through an Agent, as agent, commencing at any time for any period of time or
permanently. As soon as practicable after receipt of instructions from the Company, such Agent
will suspend solicitation of purchases from the Company until such time as the Company has advised
such Agent that such solicitation may be resumed.
13
The Company agrees to pay each Agent a commission, in the form of a discount, equal to the
applicable percentage of the principal amount of each Note sold by the Company as a result of a
solicitation made by such Agent, as an agent of the Company, as set forth in Schedule A hereto,
unless otherwise agreed.
(c)
Administrative Procedures
. The purchase price, interest rate or formula, maturity
date and other terms of the Notes (as applicable) specified in Exhibit A hereto shall be agreed
upon by the Company and the applicable Agent or Agents and specified in a pricing supplement to the
Prospectus (each, a Pricing Supplement) to be prepared in connection with each sale of Notes.
Except as may be otherwise specified in the applicable Pricing Supplement, the Notes will be issued
in denominations of U.S. $1,000 or any larger amount that is an integral multiple of U.S. $1,000.
Administrative procedures with respect to the sale of Notes shall be agreed upon from time to time
by the Company, the Agents and the Trustee (the Procedures). The Agents and the Company agree to
perform, and the Company agrees to cause the Trustee to agree to perform, their respective duties
and obligations specifically provided to be performed by them in the Procedures.
SECTION 4.
Covenants of the Company
.
The Company covenants with the Agents as follows:
(a) The Company will file each Statutory Prospectus pursuant to and in accordance with Rule
424(b) within the time period prescribed therein. Prior to the termination of the offering of any
issue of Notes, the Company will not file any amendment to the Registration Statement or supplement
to the Prospectus or Statutory Prospectus (except for a supplement relating to an offering of
securities other than the Notes) unless the Company has furnished to the related Agent(s) a copy
for their review prior to filing and will not file any such proposed amendment or supplement to
which such Agent(s) may reasonably object. Subject to the foregoing sentence, the Company will
cause each supplement to the Prospectus or Statutory Prospectus to be filed (or mailed for filing)
with the Commission as required pursuant to Rule 424 of the 1933 Act Regulations (without reliance
on Rule 424(b)(8)). The Company will promptly advise such Agent(s) (i) when each supplement to the
Prospectus or Statutory Prospectus shall have been filed (or mailed for filing) with the Commission
pursuant to Rule 424 of the 1933 Act Regulations (the filing of any such supplement on EDGAR shall
be deemed notice by the Company to the Agents), (ii) when any amendment to the Registration
Statement shall have become effective (for so long as the Registration Statement is an automatic
shelf registration statement within the meaning of Rule 405, the filing of any such amendment on
EDGAR shall be deemed notice of effectiveness by the Company to the Agents), (iii) of any request
by the Commission for any amendment to the Registration Statement or amendment to or supplement to
the Prospectus or Statutory Prospectus or for any additional information, (iv) 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 or of any examination pursuant to
Section 8(e) of the 1933 Act with respect to the Registration Statement, (v) if the Company becomes
the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the
Notes, (vi) of the receipt by the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and (vii) any
14
change in the rating assigned by any nationally recognized statistical rating organization to
any debt securities of the Company or the public announcement by any nationally recognized
statistical rating organization that it has under surveillance or review, with possible negative
implications, its rating of any debt securities of the Company. The Company will use its best
efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof. The Company shall pay the required Commission filing fees
relating to the Notes within the time required by Rule 456(b)(1)(i) of the 1933 Act Regulations
without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of
the 1933 Act Regulations (including, if applicable, by updating the Calculation of Registration
Fee table in accordance with Rule 456(b)(1)(ii) of the 1933 Act Regulations either in a
post-effective amendment to the Registration Statement or on the cover page of a prospectus filed
pursuant to Rule 424(b)).
(b) The Registration Statement is an automatic shelf registration statement, as defined in
Rule 405, that initially became effective within three years of the date hereof. If immediately
prior to the third anniversary (the Renewal Deadline) of the initial effective date of the
automatic shelf registration statement relating to the Notes, any of the Notes remain unsold by the
Agent(s), the Company will, prior to the Renewal Deadline, file, if it has not already done so and
is eligible to do so, a new automatic shelf registration statement relating to the Notes, in a form
satisfactory to the Agents. If the Company is no longer eligible to file an automatic shelf
registration statement, the Company will, prior to the Renewal Deadline, if it has not already done
so, file a new shelf registration statement relating to the Notes, in a form satisfactory to the
Agents, and will use its best efforts to cause such registration statement to be declared effective
within 180 days after the Renewal Deadline. The Company will take all other action necessary or
appropriate to permit the public offering and sale of the Notes to continue as contemplated in the
expired registration statement relating to the Notes. References herein to the Registration
Statement shall include such new automatic shelf registration statement or such new shelf
registration statement, as the case may be.
(c) If, at any time when a prospectus relating to the Notes is required to be (or, but for the
exemption in Rule 172 of the 1933 Act Regulations, would be required to be) delivered under the
1933 Act, any event occurs as a result of which the Registration Statement, General Disclosure
Package or 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 not misleading,
any facts or events arise which, individually or in the aggregate, would represent a fundamental
change in the information set forth in the Registration Statement, the General Disclosure Package
or the Prospectus, or if it shall be necessary to amend the Registration Statement, file a new
registration statement or to supplement the Prospectus to comply with the 1933 Act or the 1934 Act
or the respective rules and regulations thereunder, the Company promptly will (i) notify such Agent
to suspend the solicitation of offers to purchase Notes (and, if so notified, such Agent shall
forthwith suspend such solicitation and cease using the Prospectus as then amended or
supplemented), (ii) prepare and file with the Commission, subject to the first sentence of
paragraph (a) of this Section 4, an amendment or supplement or new registration statement which
will correct such statement or omission or an amendment or supplement which will effect such
compliance and (iii) will supply any such amended or supplemented Prospectus or new registration
statement to such Agent in such quantities as such Agent may reasonably request. If such amendment
or supplement, and any documents, certificates and opinions
15
furnished to such Agent pursuant to paragraph (i) of this Section 4 in connection with the
preparation or filing of such amendment or supplement are reasonably satisfactory in all respects
to such Agent, such Agent will, upon the filing of such amendment or supplement with the Commission
and upon the effectiveness of an amendment to the Registration Statement (or new registration
statement) if such an amendment is required, resume such Agents obligation to solicit offers to
purchase Notes hereunder. If at any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information then contained in the Registration
Statement or Prospectus or included or would include an untrue statement of a material fact or
omitted or would omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances prevailing at that subsequent time, not misleading, (i) the
Company will promptly notify the applicable Agent(s) and (ii) the Company will promptly amend or
supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
(d) With respect to any issue of Notes, the Company represents and agrees that, unless it
obtains the prior written consent of the related Agent(s), it will not make any offer relating to
the Notes that would constitute an Issuer Free Writing Prospectus, or that would otherwise
constitute a free writing prospectus, as defined in Rule 405, that is required to be filed with
the Commission or retained by the Company under Rule 433; provided that the prior written consent
of the Agent(s) hereto shall be deemed to have been given in respect to the Issuer Free Writing
Prospectus(es) listed in the applicable Terms Agreement. Any such free writing prospectus
consented to by such Agent(s) is hereinafter referred to as a Permitted Free Writing Prospectus.
The Company represents that it has treated and agrees that it will treat each Permitted Free
Writing Prospectus as an issuer free writing prospectus, as defined in Rule 433, and has complied
and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely Commission filing where required, legending and record keeping.
(e) The Company will prepare a final term sheet relating to the final terms of the Notes, in
the form attached to the form of Terms Agreement, and will file such final term sheet within the
period required by Rule 433(d)(5)(ii). Any such final term sheet is an Issuer Free Writing
Prospectus and a Permitted Free Writing Prospectus for purposes of this Agreement. In addition to
the foregoing, the Agent may, without consent of the Company, use a free writing prospectus that
contains only (a) (i) information describing the preliminary terms of the Notes or their offering,
(ii) information that describes the final terms of the Notes or their offering and that is included
in the final term sheet of the Company contemplated in the first sentence of this subsection or
(iii) information permitted by Rule 134 under the 1933 Act or (b) other information that is not
issuer information, as defined in Rule 433.
(f) The Company will deliver to the Agents as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents incorporated by reference in the
Prospectus) as the Agents reasonably request. The Company will furnish to the Agents as many
copies of the Prospectus and any Issuer Free Writing Prospectus (in each case, as amended or
supplemented) as the Agents reasonably request so long as the Agents are
16
required to deliver a Prospectus in connection with sales or solicitations of offers to
purchase the Notes.
(g) As soon as practicable, but in any event not later than 16 months after any Settlement
Date, the Company will make generally available to its security holders and to the Agents an
earnings statement covering a period of at least 12 months beginning after the effective date of
the Registration Statement and otherwise satisfying the provisions of and provide the benefits
contemplated by Section 11(a) of the 1933 Act and Rule 158 under the 1933 Act.
(h) The Company will endeavor, in cooperation with the Agents, to qualify the Notes for
offering and sale under the applicable securities laws of such states and other jurisdictions of
the United States as the Agents may designate, and will maintain such qualifications in effect for
as long as may be required for the distribution of the Notes;
provided
,
however
,
that the Company shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so qualified. The Company
will file such statements and reports as may be required by the laws of each jurisdiction in which
the Notes have been qualified as above provided. The Company will promptly advise the Agents of
the receipt by the Company of any notification with respect to the suspension of the qualification
of the Notes for sale in any such state or jurisdiction or the initiating or threatening of any
proceeding for such purpose.
(i) The Company, during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act in connection with sales of the Notes (or but for the exemption afforded
by Rule 172 of the 1933 Act would be required to be delivered), will file all documents required to
be filed with the Commission pursuant to Sections 13, 14 or 15(d) of the 1934 Act within the time
periods prescribed by the 1934 Act and the rules and regulations of the Commission thereunder (the
1934 Act Regulations).
(j) If specified by the applicable Agent or Agents in connection with a purchase of Notes from
the Company as principal, between the date of the agreement to purchase such Notes and the
Settlement Date with respect to such purchase, the Company will not, without the prior written
consent of such Agent or Agents, offer or sell, grant any option for the sale of, or enter into any
agreement to sell, any debt securities of the Company (other than the Notes that are to be sold
pursuant to such agreement, commercial paper in the ordinary course of business or assumptions of
mortgages on acquired properties).
(k) The Company will continue to elect to qualify as a real estate investment trust under
the Code and will use its best efforts to continue to qualify as a real estate investment trust
for so long as the Companys board of directors deems it in the best interest of the Company and
its shareholders to remain so qualified.
SECTION 5.
Conditions of Obligations
.
The obligations of the Agents to purchase Notes from the Company as principal and to solicit
offers to purchase Notes as agent of the Company, and the obligations of any purchasers of Notes
sold through an Agent as agent of the Company, will be subject to the accuracy of the
17
representations and warranties on the part of the Company herein and to the accuracy of the
statements of the Companys directors or officers made in any certificate furnished pursuant to the
provisions hereof, to the performance and observance by the Company of all its covenants and
agreements herein contained and to the following additional conditions precedent:
(a)
Legal Opinions
. On the date hereof, the Agents shall have received the following
legal opinions, dated as of the date hereof and in form and substance satisfactory to the Agents:
(i)
Opinion of Company Counsel
. The favorable opinion of Morrison & Foerster
LLP, counsel to the Company, substantially to the effect that:
(1) Each of the Company and the Operating Entities 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 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 its properties and conduct its business as described in the Statutory
Prospectus as amended or supplemented.
(2) The Company is duly qualified to transact business as a foreign corporation
in the States of Arizona, Colorado, Delaware, Florida, Georgia, North Carolina,
Ohio, Oregon, South Carolina, Tennessee and Virginia. United Dominion Realty, L.P.
is duly qualified and authorized to transact business as a foreign limited
partnership in the States of Arizona, California, Florida, Georgia, Maryland, Ohio,
Oregon, Tennessee, Virginia and Washington. Heritage Communities L.P. is duly
qualified and authorized to transact business as a foreign limited partnership in
the States of Arizona, California, Texas and Washington.
(3) This Agreement has been duly authorized, executed and delivered by the
Company.
(4) The Notes, in the form(s) certified by the Company as of the date hereof,
have been duly authorized for issuance, offer and sale pursuant to this Agreement
and, when executed and delivered by the Company and duly authenticated by the
Trustee in accordance with the Indenture, and issued and delivered pursuant to the
provisions of this Agreement and the Indenture against payment of consideration
therefor, will constitute legal, valid and binding obligations of the Company
entitled to the benefits provided by the Indenture, enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting enforcement of
creditors rights generally or by general equity principles, and except further as
enforcement thereof may be limited by (1) requirements that a claim with respect to
any Notes payable other than in U.S. dollars (or a foreign currency or composite
currency judgment in respect of such claim) be converted into U.S. dollars at a rate
of exchange prevailing on a date
18
determined pursuant to applicable law or (2) governmental authority to limit,
delay or prohibit the making of payments outside the United States.
(5) The Indenture has been duly authorized, executed and delivered by the
Company, is duly qualified under the 1939 Act, and constitutes a legal, valid and
binding instrument of the Company, enforceable in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of creditors rights
generally or by general equity principles, and further as enforcement thereof may be
limited by (1) requirements that a claim with respect to any Notes payable other
than in U.S. dollars (or a foreign currency or composite currency judgment in
respect of such claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or (2) governmental
authority to limit, delay or prohibit the making of payments outside the United
States.
(6) None of the issue and sale of the Notes, the compliance by the Company with
all of the provisions of the Notes, the Indenture and the Distribution Agreement,
nor the consummation of any other of the transactions herein or therein contemplated
will (i) result in a violation of the Articles of Restatement or bylaws of the
Company, (ii) to such counsels knowledge, constitute a material breach of the terms
of any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which it is bound or to which its
property or assets of the Company is subject and which has been filed as an exhibit
to any of the Companys filings made pursuant to the 1934 Act and incorporated by
reference into the Registration Statement and the Statutory Prospectus, or (iii) to
such counsels knowledge, violate any statute, law, order, rule or regulation of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority of the State of Maryland or the United States of America having
jurisdiction over the Company or any of its properties.
(7) The Registration Statement has become effective under the 1933 Act; any
required filing of the Statutory 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 the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement, or notice objecting to its use, has
been issued and no proceedings for that purpose have been instituted or threatened
by the Commission, and the Registration Statement and the Statutory Prospectus
(other than the following, as to which counsel need express no opinion: (i) the
financial statements, the related notes and schedules thereto and other financial
and statistical information included or incorporated by reference therein, and (ii)
the Statement of Eligibility on Form T-1 filed as an exhibit thereto), as of their
respective effective or issue dates, as the case may be, complied as to form in all
material respects with the applicable requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the 1939 Act Regulations of the Commission
thereunder.
19
(8) No authorization, approval or consent of any governmental authority or
agency is required in connection with the transactions contemplated in this
Agreement, except such as have been obtained under the 1933 Act or the 1933 Act
Regulations and the 1939 Act and such as may be required under state securities or
Blue Sky laws of any jurisdiction in connection with the purchase and distribution
of the Notes by the Agents in the manner contemplated in this Agreement and in the
Statutory Prospectus and such other approvals as have been obtained.
(9) Each document filed pursuant to the 1934 Act (other than the financial
statements, supporting schedules, footnotes and other statistical and financial
information contained therein, as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the Statutory Prospectus
complied when so filed as to form in all material respects with the 1934 Act and the
1934 Act Regulations.
(10) The statements set forth in the Statutory Prospectus under the captions
Description of Debt Securities, Description of Notes and U.S. Federal Income
Tax Considerations, insofar as they constitute a summary of documents referred to
therein or matters of law are correct in all material respects.
(11) To such counsels 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 Operating Entities or its or
their property which, if determined adversely to the Company or any of the Operating
Entities, would individually or in the aggregate have a material adverse effect on
the current or future consolidated financial position, shareholders equity or
results of operations of the Company and its subsidiaries, taken as a whole.
(12) Neither the Company nor either of the Operating Entities is an investment
company as defined in the 1940 Act.
(ii)
Opinion of Counsel to the Agents
. The favorable opinion of Sidley Austin
llp
, counsel to the Agents, in form and substance reasonably acceptable to the
Agents.
(iii)
Opinion of Counsel to the Company
. The favorable opinion of Morrison &
Foerster LLP, counsel for the Company, in form and substance satisfactory to counsel for the
Agents, to the effect that the Company has qualified to be taxed as a real estate investment
trust pursuant to Sections 856 through 860 of the Code for its most recently ended fiscal
year and for the three fiscal years immediately preceding such year, and the Companys
organization and contemplated method of operation are such as to enable it to continue to so
qualify for its current fiscal year.
(iv)
Disclosure Documents
. In giving their opinions required by subsections
(a)(1) and (a)(2), respectively, of this Section, Morrison & Foerster LLP and Sidley
20
Austin
llp
shall each additionally state that no facts have come to such
counsels attention that causes such counsel to believe that (A) the Registration Statement,
at the later of the time of the filing of the Annual Report on Form 10-K or as of the new
effective date with respect to the Agents and the Notes pursuant to, and within the meaning
of, Rule 430B(f)(2) under the 1933 Act, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) the Statutory Prospectus, as of the date hereof,
included or includes, as the case may be, any untrue statement of material fact or omitted
or omits, as the case may be, to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading. Such
counsel need not express a view or belief with respect to (i) the financial statements, the
related notes and schedules thereto or other financial and statistical data included or
incorporated by reference in the Registration Statement and the Statutory Prospectus or (ii)
any part of the Registration Statement which shall constitute a Statement of Eligibility on
Form T-1 under the 1939 Act.
(b)
Officers Certificate
. At the date hereof, the Agents shall have received a
certificate of the Chief Executive Officer, President or any Vice President and the principal
financial officer or principal accounting officer of the Company, dated as of the date hereof, to
the effect that (i) since the respective dates as of which information is given in the Registration
Statement and the Statutory Prospectus or since the date of any agreement by one or more Agents to
purchase Notes from the Company as principal, there has not been any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, (ii) the representations and warranties of the Company contained in
Section 2 hereof are true and correct with the same force and effect as though expressly made at
and as of the date of such certificate and (iii) the Company has performed or complied with all
agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the
date of such certificate.
(c) [Reserved]
(d)
Other Documents
. On the date hereof and on each Settlement Date, counsel to the
Agents shall have been furnished with such documents and opinions as such counsel may reasonably
require for the purpose of enabling such counsel to pass upon the issuance and sale of Notes as
herein contemplated and related proceedings, or in order to evidence the accuracy and completeness
of any of the representations and warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with the issuance and sale of
Notes as herein contemplated shall be satisfactory in form and substance to the Agents and to
counsel to the Agents.
If any condition specified in this Section 5 shall not have been fulfilled when and as
required to be fulfilled, this Agreement may be terminated by the applicable Agent or Agents by
notice to the Company at any time and any such termination shall be without liability of any party
to any other party, except that the covenant regarding provision of an earnings statement set forth
in Section 4(f) hereof, the provisions concerning payment of expenses under Section 10 hereof, the
indemnity and contribution agreement set forth in Sections 8 and 9 hereof, the
21
provisions concerning the representations, warranties and agreements to survive delivery of
Section 11 hereof, the provisions relating to governing law and forum set forth in Section 14 and
the provisions relating to parties set forth in Section 15 hereof shall remain in effect.
SECTION 6.
Delivery of and Payment for Notes Sold through an Agent
.
Delivery of Notes sold through an Agent as agent shall be made by the Company to such Agent
for the account of any purchaser only against payment therefor in immediately available funds. In
the event that a purchaser shall fail either to accept delivery of or to make payment for a Note on
the date fixed for settlement, such Agent shall promptly notify the Company and deliver such Note
to the Company and, if such Agent has theretofore paid the Company for such Note, the Company will
promptly return such funds to such Agent. If such failure occurred for any reason other than
default by such Agent in the performance of its obligations hereunder, the Company will reimburse
such Agent on an equitable basis for its loss of the use of the funds for the period such funds
were credited to the Companys account.
SECTION 7.
Additional Covenants of the Company
.
The Company covenants and agrees with the Agents that:
(a)
Reaffirmation of Representations and Warranties
. Each acceptance by the Company
of an offer for the purchase of Notes (whether to one or more Agents as principal or through an
Agent as agent), and each delivery of Notes (whether to one or more Agents as principal or through
an Agent as agent), shall be deemed to be an affirmation that the representations and warranties of
the Company contained in this Agreement and in any certificate theretofore delivered to the Agents
pursuant hereto are true and correct at the time of such acceptance or sale, as the case may be,
and an undertaking that such representations and warranties will be true and correct at the time of
delivery to such Agent or Agents or to the purchaser or its agent, as the case may be, of the Note
or Notes relating to such acceptance or sale, as the case may be, as though made at and as of each
such time (and it is understood that such representations and warranties shall relate to the
Registration Statement, the General Disclosure Package and the Prospectus as amended and
supplemented to each such time).
(b)
Subsequent Delivery of Certificates
. Each time that (i) the Registration
Statement or the Statutory Prospectus shall be amended or supplemented (other than by an amendment
or supplement providing solely for a change in the interest rate or formula applicable to the Notes
or relating solely to the issuance and/or offering of securities other than the Notes), (ii) there
is filed with the Commission any document incorporated by reference into the Registration
Statement, the General Disclosure Package or the Prospectus (other than any Current Report on Form
8-K relating solely to the issuance and/or offering of securities other than the Notes, unless the
Agents shall otherwise specify), (iii) (if required in connection with the purchase of Notes from
the Company by one or more Agents as principal) the Company sells Notes to such Agent or Agents as
principal or (iv) the Company sells Notes in a form not previously certified to the Agents by the
Company, the Company shall furnish or cause to be furnished to the Agent(s), forthwith a
certificate dated the date of filing with the Commission of such supplement or document, the date
of effectiveness of such amendment, or the date of such sale, as the case may be, in form
satisfactory to the Agent(s) to the effect that the statements contained in the
22
certificate referred to in Section 5(b) hereof which were last furnished to the Agents are
true and correct at the time of such amendment, supplement, filing or sale, as the case may be, as
though made at and as of such time (except that such statements shall be deemed to relate to the
Registration Statement, the General Disclosure Package and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in Section 5(b) hereof, modified as necessary to relate to the Registration
Statement, the General Disclosure Package and the Prospectus as amended and supplemented to the
time of delivery of such certificate.
(c)
Subsequent Delivery of Legal Opinions
. Each time that (i) the Registration
Statement or the Statutory Prospectus shall be amended or supplemented (other than by an amendment
or supplement providing solely for a change in the interest rate or formula applicable to the
Notes, providing solely for the inclusion of additional financial information, or, unless the
Agents shall otherwise specify, relating solely to the issuance and/or offering of securities other
than the Notes), (ii) there is filed with the Commission any document incorporated by reference
into the Registration Statement, General Disclosure Package or the Prospectus (other than any
Current Report on Form 8-K relating solely to the issuance and/or offering of securities other than
the Notes, unless the Agents shall otherwise specify), (iii) (if required in connection with the
purchase of Notes from the Company by one or more Agents as principal) the Company sells Notes to
such Agent or Agents as principal or (iv) the Company sells Notes in a form not previously
certified to the Agents by the Company, the Company shall furnish or cause to be furnished
forthwith to the Agents and to counsel to the Agents the written opinion of Morrison & Foerster
LLP, counsel to the Company, or other counsel satisfactory to the Agents, dated the date of filing
with the Commission of such supplement or document, the date of effectiveness of such amendment, or
the date of such sale, as the case may be, in form and substance satisfactory to the Agents, of the
same tenor as the opinion referred to in Section 5(a)(1) hereof (and including the statement
required by Section 5(a)(4)), but modified to state that (x) the Registration Statement has become
effective under the 1933 Act; any required filing of the preliminary prospectus or the Statutory
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); any required filing of any Issuer Free-Writing
Prospectus pursuant to Rule 433(b) has been made in the manner and within the time period required
by Rule 433(b); to the knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement, or notice objecting to its use, has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration Statement, the preliminary
prospectus, the Statutory Prospectus and any such Issuer Free Writing Prospectus (other than (i)
the financial statements and other financial and statistical information contained therein and (ii)
the Statement of Eligibility on Form T-1 filed as an exhibit thereto, as to which such counsel need
express no opinion), as of their respective effective or issue dates, as the case may be, complied
as to form in all material respects with the applicable requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the 1939 Act Regulations of the Commission thereunder and (y)
no facts have come to such counsels attention that have caused it to believe that (A) the
Registration Statement, at the later of the time of the filing of the Annual Report on Form 10-K or
as of the new effective date with respect to the Agents and the Notes pursuant to, and within the
meaning of, Rule 430B(f)(2) under the 1933 Act, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) (1) the General Disclosure Package, as of the Applicable
Time specified in the applicable Terms Agreement and
23
(2) the Prospectus, as of its date and as of the Closing Date, included or includes, as the
case may be, any untrue statement of material fact or omitted or omits, as the case may be, to
state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d)
Delivery of Comfort Letters
. Each time that the Agents purchase Notes from the
Company as principal or solicit offers to purchase Notes as agent of the Company, the Agents shall
receive (1) a letter from Ernst & Young LLP, dated as of the date of the applicable pricing
supplement, in form and substance satisfactory to the Agents, to the effect that: (i) they are
independent accountants with respect to the Company and its subsidiaries within the meaning of the
1933 Act and the applicable published rules and regulations thereunder; (ii) it is their opinion
that the consolidated financial statements and supporting schedules of the Company and its
subsidiaries included or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus as amended and supplemented to the date of such letter, and
covered by their opinions therein comply in form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1934 Act and the related published rules and
regulations thereunder; (iii) based upon limited procedures set forth in detail in such letter
(which shall include, without limitation, the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial information as described in SAS No.
100, Interim Financial Information, with respect to the unaudited condensed consolidated financial
statements of the Company and its subsidiaries included or incorporated by reference in the
Registration Statement), nothing came to their attention that caused them to believe that (1) any
material modifications should be made to the unaudited financial statements and financial statement
schedules of the Company and its subsidiaries included or incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus for them to be in
conformity with accounting principles generally accepted in the United States, (2) the unaudited
financial statements and financial statement schedules of the Company included or incorporated by
reference in the Registration Statement, the General Disclosure Package and the Prospectus do not
comply as to form in all material respects with the applicable accounting requirements of the 1934
Act and the related published rules and regulations thereunder, or (3) at a specified date not more
than three days prior to the date of such letter, there has been any change in the capital stock of
the Company or in the secured and unsecured debt of the Company or any decrease in the total assets
of the Company, as compared with the amounts shown in the most recent consolidated balance sheet
included or incorporated by reference in the Registration Statement, the General Disclosure Package
and the Prospectus or, during the period from the date of the most recent consolidated statement of
operations included or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus to a specified date not more than three days prior to the
date of such letter, there were any decreases, as compared with the corresponding period in the
preceding year, in rental income or in the total or per share amounts of net income or income
before gains (losses) on investments, minority interests, discontinued operations and extraordinary
items of the Company, except in all instances for changes, increases or decreases which the
Registration Statement, the General Disclosure Package and the Prospectus disclose have occurred or
may occur or except for such exceptions enumerated in such letter as shall have been agreed to by
the Agents and the Company; (iv) they have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S K and on the basis of limited
procedures specified in such letter nothing came to their attention as a result of the foregoing
procedures that caused them to believe
24
that this information does not conform in all material respects with the disclosure
requirements of Items 301, 402 and 503(d) of Regulation S K; and (v) in addition to the audit
referred to in their opinions and the limited procedures referred to in clause (iii) and (iv)
above, they have carried out certain specified procedures, not constituting an audit, with respect
to certain amounts, percentages and financial information which are included or incorporated by
reference in the Registration Statement, the General Disclosure Package and the Prospectus and
which are specified by the Agents, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial and other records of the
Company and its subsidiaries identified in such letter; and (2) a letter from Ernst & Young LLP,
dated as of the Settlement Date, in form and substance satisfactory to the Agents, to the effect
that they reaffirm the statements made in the letter furnished by them pursuant to Section 7(d)(1)
hereof, except that the specified date referred to therein for the carrying out of procedures shall
be no more than three business days prior to such Settlement Date.
SECTION 8.
Indemnification
.
(a)
Indemnification of the Agents
. The Company agrees to indemnify and hold harmless
each Agent and each person, if any, who controls such Agent within the meaning of Section 15 of the
1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, in the Statutory Prospectus, the Prospectus, any
preliminary prospectus, or in any amendment thereof or supplement thereto, any Issuer Free
Writing Prospectus or any issuer information filed or required to be filed pursuant to
Rule 433(d) under the 1933 Act or arising out of or 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;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission referred to in
subsection (i) above, or any such alleged untrue statement or omission, if such settlement
is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including, the fees and
disbursements of counsel chosen by the Agents), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or proceedings by any
governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided
,
however
, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information
25
furnished to the Company by any Agent expressly for use in any such document referred to (i) above.
This indemnity agreement will be in addition to any liability which the Company may otherwise
have.
(b)
Indemnification of the Company
. Each Agent severally and not jointly agrees to
indemnify and hold harmless the Company, its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, but only with respect to
written information relating to such Agent furnished to the Company by or on behalf of such Agent
expressly for use in any document referred to in (a)(i) above. This indemnity agreement will be in
addition to any liability which such Agent may otherwise have.
(c)
Actions Against Parties; Notification
. Each indemnified party shall give notice
as promptly as reasonably practicable to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 8(a) hereof, counsel to the indemnified parties shall be
selected by the applicable Agent(s) and, in the case of parties indemnified pursuant to Section
8(b) hereof, counsel to the indemnified shall be selected by the Company. An indemnifying party
may participate at its own expense in the defense of any such action;
provided
,
however
, that counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
No indemnifying party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be sought under this
Section 8 or 9 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation, investigation, proceeding
or claim and (ii) does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
SECTION 9.
Contribution
.
In order to provide for just and equitable contribution in circumstances in which the
indemnity agreement provided for in Section 8 is for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with its terms, the Company and the Agents
shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company and one or more of
26
the Agents, as incurred, in such proportions that each Agent is responsible for that portion
represented by the percentage that the commission or underwriting discount received by such Agent
bears to the total sales price from the sale of the Notes sold to or through such Agent that were
the subject of the claim for indemnification and the Company is responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 9, each person, if any, who
controls an Agent within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Agent, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Company.
SECTION 10.
Payment of Expenses
.
The Company will pay all expenses incident to the performance of its obligations under this
Agreement (whether or not any sale of Notes is consummated), including:
(a) The preparation and filing of the Registration Statement, the Prospectus, any preliminary
prospectus, any Issuer Free Writing Prospectus and all amendments or supplements thereto;
(b) The preparation, filing and reproduction of this Agreement and the Indenture;
(c) The preparation, printing, issuance and delivery of the Notes, including any fees and
expenses relating to the eligibility and issuance of Notes in book-entry form;
(d) The reasonable fees and disbursements of the Companys accountants and counsel, of the
Trustee and its counsel, and of any calculation agent or exchange rate agent;
(e) The reasonable fees and disbursements of counsel to the Agents incurred in connection with
the establishment of the program relating to the Notes and incurred from time to time in connection
with the transactions contemplated hereby;
(f) The qualification of the Notes under state securities laws in accordance with the
provisions of Section 4(h) hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Agents in connection therewith and in connection with the preparation of any
Blue Sky or Legal Investment Survey;
(g) The printing and delivery to and by the Agents in quantities as stated above of copies of
the Registration Statement, the Prospectus, any preliminary prospectus, any Issuer Free Writing
Prospectus and all amendments or supplements thereto;
(h) The preparation, reproducing and delivery to the Agents of copies of the Indenture and all
amendments, supplements and modifications thereto;
(i) Any fees charged by nationally recognized statistical rating organizations for the rating
of the Notes;
27
(j) The fees and expenses incurred in connection with any listing of Notes on a securities
exchange;
(k) The fees and expenses incurred with respect to any filing with the National Association of
Securities Dealers, Inc.;
(l) Any advertising and other out-of-pocket expenses of the Agents incurred with the approval
of the Company; and
(m) The cost of providing any CUSIP or other identification numbers for the Notes.
SECTION 11.
Representations, Warranties and Agreements to Survive Delivery
.
All representations, warranties and agreements contained in this Agreement or in certificates
of officers of the Company submitted pursuant hereto or thereto shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of the Agents or any
controlling person of an Agent, or by or on behalf of the Company, and shall survive each delivery
of and payment for any of the Notes.
SECTION 12.
Termination
.
(a)
Termination of this Agreement
. This Agreement (excluding any agreement by one or
more Agents to purchase Notes from the Company as principal) may be terminated for any reason at
any time by the Company or by an Agent, as to itself, upon the giving of 30 days written notice of
such termination to the other party hereto.
(b)
Termination of Agreement to Purchase Notes as Principal
. The applicable Agent or
Agents may also terminate any agreement by such Agent or Agents to purchase Notes from the Company
as principal, by notice to the Company, at any time at or prior to the Settlement Date relating
thereto (i) if there has been, since the date of such agreement or since the respective dates as of
which information is given in the Registration Statement, General Disclosure Package and the
Prospectus, any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United States or any outbreak
of hostilities or other calamity or crisis or escalation of any existing hostilities, the effect of
which is such as to make it, in the judgment of such Agent or Agents, impracticable or inadvisable
to market the Notes or enforce contracts for the sale of the Notes or a material disruption has
occurred in securities settlement or clearance services in the United States, or (iii) if trading
in any of the securities of the Company has been suspended by the Commission or the New York Stock
Exchange, or if trading generally on either the New York Stock Exchange, the American Stock
Exchange or NASDAQ has been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said exchanges or by
order of the Commission or any other governmental authority, or if a banking moratorium has been
declared by Federal, New York or Maryland authorities, (iv) if the rating assigned by any
nationally recognized statistical rating organization to any debt securities of the Company as of
the date of such agreement shall have been lowered since that date or if any such rating
organization shall have publicly announced that it has under
28
surveillance or review, with possible negative implications, its rating of any debt securities
of the Company, or (v) if there shall have come to the attention of such Agent or Agents any facts
that would cause them to believe that the Registration Statement, General Disclosure Package and
the Prospectus, at the time it was required to be delivered to a purchaser of Notes, included an
untrue statement of a material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances existing at the time of such delivery, not
misleading.
(c)
General
. In the event of any such termination, none of the parties will have any
liability to any other party hereto, except that (i) the Agents shall be entitled to any commission
earned in accordance with the third paragraph of Section 3(b) hereof, (ii) if at the time of
termination (A) any Agent shall own any Notes purchased by it as principal with the intention of
reselling them or (B) an offer to purchase any of the Notes has been accepted by the Company but
the time of delivery to the purchaser or his agent of the Note or Notes relating thereto has not
occurred, the covenants set forth in Sections 4 and 7 hereof shall remain in effect until such
Notes are so resold or delivered, as the case may be, and (iii) the covenant set forth in Section
4(h) hereof, the provisions of Section 10 hereof, the indemnity and contribution agreements set
forth in Sections 8 and 9 hereof, and the provisions of Sections 11, 14 and 15 hereof shall remain
in effect.
SECTION 13.
Notices
.
Unless otherwise provided herein, all notices required under the terms and provisions hereof
shall be in writing, either delivered by hand, by mail or by telex, telecopier or telegram, and any
such notice shall be effective when received at the address specified below.
If to the Company or the Operating Entities:
UDR, Inc.
1745 Shea Center Drive, Suite 200
Highlands Ranch, Colorado 80219
Attention: President
Telecopy No.: (720) 283-2451
with a copy to:
Morrison & Foerster LLP
370 Seventeenth Street, Suite 5200
Denver, Colorado 80202
Attention: Warren L. Troupe, Esq.
Telecopy No.: (303) 592-1510
If to the Agents:
J.P. Morgan Securities Inc.
270 Park Avenue, 8th Floor
New York, New York 10017
Attention: Medium-Term Note Desk
29
Telecopy No.: (212) 834-6081
Banc of America Securities LLC
40 West 57th Street
NY1-040-27-03
New York, New York 10019
Attention: High Grade Transaction Management/Legal
Telecopy No.: (646) 313-4803
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Attention: Transaction Execution Group
Telecopy No.: (646) 291-5209
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Don Hansen Registration Department
Telecopy No.: (212) 357-5505
McDonald Investments Inc.
127 Public Square
Cleveland, Ohio 44114
Morgan Stanley & Co. Incorporated
1585 Broadway, 29th Floor
New York, NY 10036
Attention: Investment Banking Division
Telecopy No.: (212) 507-8999
SunTrust Capital Markets, Inc.
303 Peachtree Street
23
rd
Floor, MC 3947
Atlanta, Georgia 30308
Wachovia Capital Markets, LLC
301 S. College St., NC0600
Charlotte, North Carolina 28288
Wells Fargo Securities, LLC
600 California Street, Suite 1600
San Francisco, California 94108
or at such other address as such party may designate from time to time by notice duly given in
accordance with the terms of this Section 13.
30
SECTION 14.
Governing Law; Forum
.
This Agreement and all the rights and obligations of the parties shall be governed by and
construed in accordance with the laws of the State of New York applicable to agreements made and to
be performed in such State. Any suit, action or proceeding brought by the Company against any
Agent in connection with or arising under this Agreement shall be brought solely in the state or
federal court of appropriate jurisdiction located in the Borough of Manhattan, The City of New
York.
SECTION 15.
Parties
.
This Agreement shall inure to the benefit of and be binding upon the Agents, the Company and
their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors referred to in
Sections 8 and 9 and their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and respective successors and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Notes shall be deemed to be a successor by reason merely of such
purchase.
SECTION 16.
Counterparts
.
This Agreement may be executed in one or more counterparts and, if executed in more than one
counterpart, the executed counterparts hereof shall constitute a single instrument.
31
If the foregoing is in accordance with the Agents understanding of our agreement, please sign
and return to the Company a counterpart hereof, whereupon this instrument along with all
counterparts will become a binding agreement between the Agents and the Company in accordance with
its terms.
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Very truly yours,
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UDR, INC.,
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a Maryland corporation
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By:
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/s/ Michael A. Ernst
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Name:
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Michael A. Ernst
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Title:
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Executive Vice President and
Chief Financial Officer
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Confirmed and Accepted, as of the date first above written:
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J.P. MORGAN SECURITIES INC.
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By:
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/s/ Stephen L. Sheiner
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Name: Stephen L. Sheiner
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Title: Vice President
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BANC OF AMERICA SECURITIES LLC
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By:
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/s/ Peter J. Carbone
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Name: Peter J. Carbone
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Title: Vice President
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CITIGROUP GLOBAL MARKETS INC.
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By:
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/s/ Matthew J. Greenberger
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Name: Matthew J. Greenberger
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Title: Director
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GOLDMAN, SACHS & CO.
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By:
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/s/ Goldman, Sachs & Co.
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(Goldman, Sachs & Co.)
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MCDONALD INVESTMENTS INC.
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By:
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/s/ Nida Raza
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Name: Nida Raza
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Title: Director
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MORGAN STANLEY & CO. INCORPORATED
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By:
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/s/ Michael Fusco
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Name: Michael Fusco
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Title: Executive Director
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SUNTRUST CAPITAL MARKETS, INC.
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By:
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/s/ Thomas A. Shanklin
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Name: Thomas A. Shanklin
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Title: Director
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WACHOVIA CAPITAL MARKETS, LLC
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By:
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/s/ Teresa Hee
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Name: Teresa Hee
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Title: Managing Director
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WELLS FARGO SECURITIES, LLC
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By:
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/s/ Andrew McCarthy
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Name: Andrew McCarthy
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Title: Managing Director
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EXHIBIT A
FORM OF TERMS AGREEMENT
UDR, Inc.
Medium-Term Notes, Series A
Due Nine Months or More
From Date of Issue
TERMS AGREEMENT
, 20__
Subject in all respects to the terms and conditions of the Distribution Agreement dated March
20, 2007 by and among J.P. Morgan Securities Inc., Banc of America Securities LLC, Citigroup Global
Markets Inc., Goldman, Sachs & Co., McDonald Investments Inc., Morgan Stanley & Co. Incorporated,
SunTrust Capital Markets, Inc., Wachovia Capital Markets, LLC and Wells Fargo Securities, LLC
(each, an Agent, and together, the Agents) and you (the Agreement), [each of] the
undersigned, severally and not jointly, agrees to purchase the following Medium-Term Notes, Series
A (the Notes), in the respective amounts set forth in the table below, of UDR, Inc.:
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Aggregate Principal Amount:
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[Table of allocations:]
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Currency or Currency Unit:
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Interest Rate or Base Rate(s):
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Spread:
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Spread Multiplier:
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Stated Maturity Date:
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Interest Payment Dates:
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Record Dates:
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Applicable Time:
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Purchase Price:
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% of Principal Amount [plus accrued interest, if any, from
, 20___]
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Settlement Date and Time:
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Certificated or Book-Entry Form:
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Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in
the requirements to
deliver the documents
specified in the Agreement:
Stand-off Period:
Issuer Free Writing Prospectus(es):
Also, in connection with the purchase of Notes from the Company by one or more Agents as principal,
agreement as to whether the following will be required:
Officers Certificate pursuant to Section 7(b) of the Distribution Agreement.
Legal Opinions pursuant to Section 7(c) of the Distribution Agreement.
Comfort Letters pursuant to Section 7(d) of the Distribution Agreement.
Stand-off Agreement pursuant to Section 4(j) of the Distribution Agreement.
Other terms:
Accepted:
UDR, INC.
EXHIBIT A TO TERMS AGREEMENT
FORMS OF FINAL TERM SHEET
UDR, Inc.
Medium-Trust Notes, Series A
Due Nine Months or More
From Date of Issue
FINAL TERM SHEET
Form of Fixed Rate Pricing Term Sheet
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Issuer:
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UDR, Inc.
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Size:
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Security Type:
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Maturity:
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Coupon:
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Price to Public:
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Yield to maturity:
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[Spread to Benchmark Treasury: ]
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[Benchmark Treasury:]
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[Benchmark Treasury Spot and Yield:]
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Interest Payment Dates:
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Redemption Provisions:
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[First call date and price:]
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[Make-whole call:]
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Trade Date:
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Settlement Date:
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Denominations:
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CUSIP:
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[Ratings:]
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Underwriters:
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The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SEC Web site at
www.sec.gov
. Alternatively, the issuer, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus if you request it by calling
collect .
Any disclaimer or other notice that may appear below is not applicable to this communication and
should be disregarded. Such disclaimer or notice was automatically generated as a result of this
communication being sent by Bloomberg or another email system.
Form of Floating Rate Pricing Term Sheet
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Issuer:
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UDR, Inc.
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Size:
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Maturity:
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Coupon:
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Price to Public:
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Interest Payment and Reset Dates:
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Day Count Convention:
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Redemption Provisions:
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Trade Date:
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Settlement Date:
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Denominations:
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CUSIP:
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[Ratings:]
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Underwriters:
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The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SEC Web site at
www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus if you request it by calling
collect
.
Any disclaimer or other notice that may appear below is not applicable to this communication and
should be disregarded. Such disclaimer or notice was automatically generated as a result of this
communication being sent by Bloomberg or another email system.
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company shall pay the applicable
Agent, on a discount basis, a commission for the sale of each Note equal to the principal amount of
such Note multiplied by the appropriate percentage set forth below:
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PERCENT OF
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MATURITY RANGES
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PRINCIPAL AMOUNT
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From 9 months to less than 1 year
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.125
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%
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From 1 year to less than 18 months
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.150
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From 18 months to less than 2 years
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.200
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From 2 years to less than 3 years
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.250
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From 3 years to less than 4 years
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.350
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From 4 years to less than 5 years
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.450
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From 5 years to less than 6 years
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.500
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From 6 years to less than 7 years
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.550
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From 7 years to less than 10 years
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.600
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From 10 years to less than 15 years
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.625
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From 15 years to less than 20 years
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.700
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From 20 years to 30 years
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.750
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Greater than 30 years
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*
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*
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As agreed to by the Company and the applicable
Agent at the time of sale.
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Sch. A-1
EXHIBIT B
UDR, Inc.
Medium-Term Notes, Series A
due Nine Months or More From Date of Issue
, 20
[Name and Address of Agent]
Dear [
]:
UDR, Inc., a Maryland corporation (the Company), has previously entered into a Distribution
Agreement dated as of March 20, 2007 (the Distribution Agreement), between the Company and
[list
named agents]
(the Existing Agents), with respect to the issue and sale by the Company of its
Medium-Term Notes, Series A due Nine Months or More From Date of Issue (the Notes), pursuant to
an Indenture dated as of November 1, 1995, as amended or modified from time to time, between the
Company and U.S. Bank National Association, successor trustee to Wachovia Bank, National
Association (formerly known as First Union National Bank of Virginia), as Trustee. A copy of the
Distribution Agreement, including the Administrative Procedures with respect to the issuance of the
Notes (the Procedures), is attached hereto.
Subject to and in accordance with the terms of the Distribution Agreement and the Procedures,
the Company hereby appoints you as an Agent under the Distribution Agreement
[in connection with
the purchase of the Notes described in the accompanying Pricing Supplement No.
, dated
, but only for this one reverse inquiry transaction]
. Your appointment is made subject
to the terms and conditions applicable to Agents under the Distribution Agreement
[and terminates
upon payment for the Notes or other termination of this transaction]
.
Subject to the provisions hereof, this Agreement incorporates by reference all of the terms
and provisions of the Distribution Agreement, including all schedules and exhibits thereto.
Except as otherwise expressly provided herein, all terms used herein which are defined in the
Distribution Agreement shall have the same meanings as in the Distribution Agreement, except that
the terms Agent, Agents and you, as used in the Distribution Agreement, shall be deemed to
refer, where applicable and for purposes of this Agreement, to the Existing Agents and you.
You and we each agree to perform our respective duties and obligations specifically provided
to be performed by each of us in accordance with the terms and provisions of the Distribution
Agreement and the Procedures.
If the foregoing correctly sets forth our agreement, please indicate your acceptance hereof in
the space provided for that purpose below. This action will confirm your appointment and your
acceptance and agreement to act as Agent in connection with the issue and sale of the Notes under
the terms and conditions of the Distribution Agreement.
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Very truly yours,
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UDR, Inc.
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By:
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Name:
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Title:
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CONFIRMED AND ACCEPTED:
as of the date first above written
EXHIBIT
4.01
FORM OF FIXED RATE NOTE
[FACE OF NOTE]
[UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE
DEPOSITARY) (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER HEREOF OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.]
1
[IF THIS NOTE IS AN ORIGINAL ISSUE DISCOUNT NOTE, INSERT THE FOLLOWING LANGUAGE: FOR PURPOSES
OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT ON THIS NOTE IS % OF ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS [AND] THE YIELD TO MATURITY
IS %. [THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT
ACCRUAL PERIOD OF , 20 TO , 20 , IS % OF THE PRINCIPAL AMOUNT OF THIS NOTE.]]
[IF THIS NOTE IS SUBJECT TO THE CONTINGENT PAYMENT DEBT REGULATIONS, ALSO INSERT THE FOLLOWING
LANGUAGE: IN ADDITION, THIS NOTE IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS
GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE
UNITED STATES INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH NOTE IS $[ ] PER $1,000 OF
PRINCIPAL AMOUNT AND THE COMPARABLE YIELD IS [ ]%, COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE
TREATED AS THE YIELD FOR UNITED STATES FEDERAL INCOME TAX PURPOSES). THE COMPANY AGREES TO PROVIDE
PROMPTLY TO THE HOLDER OF THIS NOTE, UPON WRITTEN REQUEST, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT,
ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN
REQUEST SHOULD BE SENT TO THE COMPANY AT THE FOLLOWING ADDRESS: [
].]
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1
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This paragraph applies to global Notes only.
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REGISTERED
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CUSIP No.:
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PRINCIPAL AMOUNT:
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No. FXR-
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UDR, INC.
MEDIUM-TERM NOTE, SERIES A
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
(Fixed Rate)
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ORIGINAL ISSUE DATE:
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INTEREST RATE: %
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STATED MATURITY DATE:
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INTEREST PAYMENT DATE(S)
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[ ] CHECK IF DISCOUNT NOTE
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[ ]
and
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Issue Price: %
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[ ] Other:
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INITIAL REDEMPTION
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INITIAL REDEMPTION
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ANNUAL REDEMPTION
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DATE:
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PERCENTAGE: %
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PERCENTAGE
REDUCTION: %
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OPTIONAL REPAYMENT
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DATE(S):
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SPECIFIED CURRENCY:
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AUTHORIZED DENOMINATION:
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EXCHANGE RATE
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[ ] United States dollars
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[ ] $1,000 and integral
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AGENT:
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[ ] Other:
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multiples thereof
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[ ] Other:
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ADDENDUM ATTACHED
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DEFAULT INTEREST RATE:
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OTHER/ADDITIONAL
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PROVISIONS:
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[ ] Yes
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[ ] No
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2
UDR, INC.
, a Maryland corporation (the Company, which term includes any successor
corporation under the Indenture hereinafter referred to), for value received, hereby promises to
pay to , or registered assigns, the Principal Amount of , on the Stated
Maturity Date specified above (or any Redemption Date or Repayment Date, each
as defined on the reverse hereof, or any earlier date of acceleration of maturity) (each such date
being hereinafter referred to as the Maturity Date with respect to the principal repayable on
such date) and to pay interest thereon (and on any overdue principal, premium and/or interest to
the extent legally enforceable) at the Interest Rate per annum specified above, until the principal
hereof is paid or duly made available for payment. The Company will pay interest in arrears on
each Interest Payment Date, if any, specified above (each, an Interest Payment Date), commencing
with the first Interest Payment Date next succeeding the Original Issue Date specified above, and
on the Maturity Date;
provided
,
however
, that if the Original Issue Date occurs
between a Record Date (as defined below) and the next succeeding Interest Payment Date, interest
payment will commence on the Interest Payment Date immediately following the next succeeding Record
Date to the registered holder (the Holder) of this Note on the next succeeding Record Date.
Interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months.
Interest on this Note will accrue from, and including, the immediately preceding Interest
Payment Date to which interest has been paid or duly provided for (or from, and including, the
Original Issue Date if no interest has been paid or duly provided for) to, but excluding, the
applicable Interest Payment Date or the Maturity Date, as the case may be (each, an Interest
Period). The interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to the person in whose
name this Note (or one or more predecessor Notes, as defined on the reverse hereof) is registered
at the close of business on the fifteenth calendar day (whether or not a Business Day, as defined
below) immediately preceding such Interest Payment Date (the Record Date);
provided
,
however
, that interest payable on the Maturity Date will be payable to the person to whom
the principal hereof and premium, if any, hereon shall be payable. Any such interest not so
punctually paid or duly provided for on any Interest Payment Date other than the Maturity Date
(Defaulted Interest) shall forthwith cease to be payable to the Holder on the close of business
on any Record Date and, instead, shall be paid to the person in whose name this Note is registered
at the close of business on a special record date (the Special Record Date) for the payment of
such Defaulted Interest to be fixed by the Trustee hereinafter referred to, notice whereof shall be
given to the Holder of this Note by the Trustee not less than 10 calendar days prior to such
Special Record Date or may be paid at any time in any other lawful manner, all as more fully
provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this Note due on the
Maturity Date will be made in immediately available funds upon presentation and surrender of this
Note (and, with respect to any applicable repayment of this Note, upon delivery of [a duly
completed election form]
2
[instructions]
3
as contemplated on the reverse
hereof) at the office or
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2
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This text applies to certificated Notes only.
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3
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This text applies to global Notes only.
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3
agency maintained by the Company for that purpose in the Borough of Manhattan, The City of New
York, currently the corporate trust office of the Trustee located at 40 Broad Street,
5
th
Floor, New York, New York 10004, or at such other paying agency in the Borough of
Manhattan, The City of New York, as the Company may determine;
provided
,
however
,
that if the Specified Currency (as defined below) is other than United States dollars and such
payment is to be made in the Specified Currency in accordance with the provisions set forth below,
such payment will be made by wire transfer of immediately available funds to an account with a bank
designated by the Holder hereof at least 15 calendar days prior to the Maturity Date, provided that
such bank has appropriate facilities therefor and that this Note is presented and surrendered and,
if applicable, [a duly completed repayment election form is]
4
[instructions
are]
5
delivered at the aforementioned office or agency maintained by the Company in time
for the Trustee to make such payment in such funds in accordance with its normal procedures.
Payment of interest due on any Interest Payment Date other than the Maturity Date will be made at
the aforementioned office or agency maintained by the Company or, at the option of the Company, by
check mailed to the address of the person entitled thereto as such address shall appear in the
Security Register maintained by the Trustee;
provided
,
however
, that a Holder of
U.S.$10,000,000 (or, if the Specified Currency is other than United States dollars, the equivalent
thereof in the Specified Currency) or more in aggregate principal amount of Notes (whether having
identical or different terms and provisions) will be entitled to receive interest payments on such
Interest Payment Date by wire transfer of immediately available funds if such Holder has delivered
appropriate wire transfer instructions in writing to the Trustee not less than 15 calendar days
prior to such Interest Payment Date. Any such wire transfer instructions received by the Trustee
shall remain in effect until revoked by such Holder.
If any Interest Payment Date or the Maturity Date falls on a day that is not a Business Day,
the required payment of principal, premium, if any, and/or interest shall be made on the next
succeeding Business Day with the same force and effect as if made on the date such payment was due,
and no interest shall accrue with respect to such payment for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be, to the date of such payment on the
next succeeding Business Day.
As used herein, Business Day means any day, other than a Saturday or Sunday, that is neither
a legal holiday nor a day on which commercial banks are authorized or required by law, regulation
or executive order to close in The City of New York;
provided
,
however
, that if the
Specified Currency is other than United States dollars, such day must also not be a day on which
commercial banks are authorized or required by law, regulation or executive order to close in the
Principal Financial Center (as defined below) of the country issuing the Specified Currency (or, if
the Specified Currency is Euro, such day must also be a day on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer (TARGET) System is open). Principal Financial Center
means the capital city of the country issuing the Specified Currency, except that with respect to
United States dollars, Australian dollars, Canadian dollars, Euros, New Zealand dollars South
African rands and Swiss francs, the Principal Financial Center
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4
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This text applies to certificated Note only.
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5
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This text applies to global Notes only.
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4
shall be The City of New York, Sydney, Toronto, Wellington, Johannesburg and Zurich,
respectively.
The Company is obligated to make payment of principal, premium, if any, and interest in
respect of this Note in the currency in which this Note is denominated above (or, if such currency
is not at the time of such payment legal tender for the payment of public and private debts in the
country issuing such currency or, if such currency is Euro, in the member states of the European
Union that have adopted the single currency in accordance with the Treaty establishing the European
Community, as amended by the Treaty on European Union, then the currency which is at the time of
such payment legal tender in the related country or in the adopting member states of the European
Union, as the case may be) (the Specified Currency). If the Specified Currency is other than
United States dollars, except as otherwise provided below, any such amounts so payable by the
Company will be converted by the Exchange Rate Agent specified above into United States dollars for
payment to the Holder of this Note.
Any United States dollar amount to be received by the Holder of this Note will be based on the
highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately
11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date
from three recognized foreign exchange dealers (one of whom may be the Exchange Rate Agent)
selected by the Exchange Rate Agent and approved by the Company for the purchase by the quoting
dealer of the Specified Currency for United States dollars for settlement on such payment date in
the aggregate amount of the Specified Currency payable to all Holders of Notes scheduled to receive
United States dollar payments and at which the applicable dealer commits to execute a contract.
All currency exchange costs will be borne by the Holder of this Note by deductions from such
payments. If three such bid quotations are not available, payments on this Note will be made in
the Specified Currency.
If the Specified Currency is other than United States dollars, the Holder of this Note may
elect to receive all or a specified portion of any payment of principal, premium, if any, and/or
interest, if any, in respect of this Note in the Specified Currency by submitting a written request
for such payment to the Trustee at its corporate trust office in The City of New York on or prior
to the applicable Record Date or at least 15 calendar days prior to the Maturity Date, as the case
may be. Such written request may be mailed or hand delivered or sent by cable, telex or other form
of facsimile transmission. The Holder of this Note may elect to receive all or a specified portion
of all future payments in the Specified Currency in respect of such principal, premium, if any,
and/or interest, if any, and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice delivered to the Trustee, but written notice
of any such revocation must be received by the Trustee on or prior to the applicable Record Date or
at least 15 calendar days prior to the Maturity Date, as the case may be.
If the Specified Currency is other than United States dollars and the Holder of this Note
shall have duly made an election to receive all or a specified portion of any payment of principal,
premium, if any, and/or interest, if any, in respect of this Note in the Specified Currency, but
the Specified Currency is not available due to the imposition of exchange controls or other
circumstances beyond the control of the Company, the Company will be entitled to satisfy its
obligations to the Holder of this Note by making such payment in United States dollars on the basis
of the Market Exchange Rate (as defined below) determined by the Exchange Rate Agent
5
on the second Business Day prior to such payment date or, if such Market Exchange Rate is not
then available, on the basis of the most recently available Market Exchange Rate. The Market
Exchange Rate for the Specified Currency other than United States dollars means the noon dollar
buying rate in The City of New York for cable transfers for the Specified Currency as certified for
customs purposes (or, if not so certified, as otherwise determined) by the Federal Reserve Bank of
New York. Any payment made in United States dollars under such circumstances shall not constitute
an Event of Default (as defined in the Indenture).
All determinations referred to above made by the Exchange Rate Agent shall be at its sole
discretion and shall, in the absence of manifest error, be conclusive for all purposes and binding
on the Holder of this Note.
The Company agrees to indemnify the Holder of any Note against any loss incurred by such
Holder as a result of any judgment or order being given or made against the Company for any amount
due hereunder and such judgment or order requiring payment in a currency (the Judgment Currency)
other than the Specified Currency, and as a result of any variation between (i) the rate of
exchange at which the Specified Currency amount is converted into the Judgment Currency for the
purpose of such judgment or order, and (ii) the rate of exchange at which such Holder, on the date
of payment of such judgment or order, is able to purchase the Specified Currency with the amount of
the Judgment Currency actually received by such Holder, as the case may be. The foregoing
indemnity constitutes a separate and independent obligation of the Company and continues in full
force and effect notwithstanding any such judgment or order as aforesaid. The term rate of
exchange includes any premiums and costs of exchange payable in connection with the purchase of,
or conversion into, the relevant currency.
Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof and, if so specified on the face hereof, in an Addendum hereto, which further provisions
shall have the same force and effect as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or Other/Additional
Provisions apply to this Note as specified above, this Note shall be subject to the terms set
forth in such Addendum or such Other/Additional Provisions.
Unless the Certificate of Authentication hereon has been executed by the Trustee by manual
signature, this Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
6
IN WITNESS WHEREOF, UDR, Inc. has caused this Note to be duly executed by one of its duly
authorized officers.
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UDR, INC.
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By
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Name:
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Title:
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ATTEST:
Dated:
TRUSTEES CERTIFICATE OF AUTHENTICATION:
This is
one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
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By
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Authorized Signatory
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Authentication Date:
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7
[REVERSE OF NOTE]
UDR, INC.
MEDIUM-TERM NOTE, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(Fixed Rate)
This Note is one of a duly authorized series of Debt Securities (the Debt Securities) of the
Company issued and to be issued under an Indenture, dated as of November 1, 1995, as amended,
modified or supplemented from time to time (the Indenture), between the Company (successor by
merger to United Dominion Realty Trust, Inc., a Virginia corporation) and U.S. Bank National
Association, successor trustee to Wachovia Bank, National Association, (formerly known as First
Union National Bank of Virginia) as trustee (the Trustee, which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities, and of
the terms upon which the Debt Securities are, and are to be, authenticated and delivered. This
Note is one of the series of Debt Securities designated as Medium-Term Notes, Series A Due Nine
Months or More From Date of Issue (the Notes). All terms used but not defined in this Note or
in an Addendum hereto shall have the meanings assigned to such terms in the Indenture or on the
face hereof, as the case may be.
This Note is issuable only in registered form without coupons in minimum denominations of U.S.
$1,000 and integral multiples thereof or other Authorized Denomination specified on the face
hereof.
This Note will not be subject to any sinking fund and, unless otherwise specified on the face
hereof in accordance with the provisions of the following two paragraphs, will not be redeemable or
repayable prior to the Stated Maturity Date.
This Note will be subject to redemption at the option of the Company on any date on or after
the Initial Redemption Date, if any, specified on the face hereof, in whole or from time to time in
part in increments of U.S. $1,000 or other integral multiple of an Authorized Denomination
(provided that any remaining principal amount hereof shall be at least U.S. $1,000 or such other
minimum Authorized Denomination), at the Redemption Price (as defined below), together with unpaid
interest accrued thereon to the date fixed for redemption (the Redemption Date), on written
notice given to the Holder hereof (in accordance with the provisions of the Indenture) not more
than 60 nor less than 30 calendar days prior to the Redemption Date. The Redemption Price shall
be an amount equal to the Initial Redemption Percentage specified on the face hereof (as adjusted
by the Annual Redemption Percentage Reduction, if any, specified on the face hereof) multiplied by
the unpaid principal amount of this Note to be redeemed. The Initial Redemption Percentage, if
any, shall decline at each anniversary of the Initial Redemption Date by the Annual Redemption
Percentage Reduction, if any, until the Redemption Price is 100% of unpaid principal amount to be
redeemed. In the event of redemption of this Note in part only, a new Note of like tenor for the
unredeemed portion hereof and otherwise having the same
8
terms and provisions as this Note shall be issued by the Company in the name of the Holder
hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of the Holder hereof on
the Optional Repayment Date(s), if any, specified on the face hereof, in whole or from time to time
in part in increments of U.S. $1,000 or other integral multiple of an Authorized Denomination
(provided that any remaining principal amount hereof shall be at least U.S. $1,000 or such other
minimum Authorized Denomination), at a repayment price equal to 100% of the unpaid principal amount
to be repaid, together with unpaid interest accrued thereon to the date fixed for repayment (the
Repayment Date). For this Note to be repaid, the Trustee must receive at its corporate trust
office in the Borough of Manhattan, The City of New York, not more than 60 nor less than 30
calendar days prior to the Repayment Date, such Note and [the form hereon entitled Option to Elect
Repayment duly completed]
6
[instructions to such effect forwarded by the Holder
hereof].
7
Exercise of such repayment option by the Holder hereof shall be irrevocable.
In the event of repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms and provisions as this Note shall be issued by
the Company in the name of the Holder hereof upon the presentation and surrender hereof.
If this Note is specified on the face hereof to be a Discount Note, the amount payable to the
Holder of this Note in the event of redemption, repayment or acceleration of maturity will be equal
to the sum of (1) the Issue Price specified on the face hereof (increased by any accruals of the
Discount, as defined below) and, in the event of any redemption of this Note (if applicable),
multiplied by the Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage
Reduction, if applicable) and (2) any unpaid interest accrued thereon to the Redemption Date,
Repayment Date or date of acceleration of maturity, as the case may be. The difference between the
Issue Price and 100% of the principal amount of this Note is referred to herein as the Discount.
For purposes of determining the amount of Discount that has accrued as of any Redemption Date,
Repayment Date or date of acceleration of maturity of this Note, such Discount will be accrued so
as to cause the yield on the Note to be constant. The constant yield will be calculated using a
30-day month, 360-day year convention, a compounding period that, except for the Initial Period (as
defined below), corresponds to the shortest period between Interest Payment Dates (with ratable
accruals within a compounding period) and an assumption that the maturity of this Note will not be
accelerated. If the period from the Original Issue Date to the initial Interest Payment Date (the
Initial Period) is shorter than the compounding period for this Note, a proportionate amount of
the yield for an entire compounding period will be accrued. If the Initial Period is longer than
the compounding period, then such period will be divided into a regular compounding period and a
short period, with the short period being treated as provided in the preceding sentence.
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6
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This text applies to certificated Notes only.
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7
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This text applies to global Notes only.
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9
The covenant set forth in Section 1004(a) of the Indenture shall not apply to this Note, and
the following covenant shall instead apply to this Note in place of the covenant set forth in
Section 1004(a) of the Indenture:
The Trust will not, and will not permit any Subsidiary to, incur any Debt if,
immediately after giving effect to the incurrence of such additional Debt and the
application of the proceeds thereof, the aggregate principal amount of all
outstanding Debt of the Trust and its Subsidiaries on a consolidated basis
determined in accordance with GAAP is greater than 65% of the sum of (without
duplication) (i) the Trusts Total Assets as of the end of the calendar quarter
covered in the Trusts Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
as the case may be, most recently filed with the Commission (or, if such filing is
not permitted under the Exchange Act, with the Trustee) prior to the incurrence of
such additional Debt and (ii) the purchase price of any real estate assets or
mortgages receivable acquired, and the amount of any securities offering proceeds
received (to the extent such proceeds were not used to acquire real estate assets or
mortgages receivable or used to reduce Debt), by the Trust or any Subsidiary since
the end of such calendar quarter, including those proceeds obtained in connection
with the incurrence of such additional Debt.
In addition to the covenants set forth in the Indenture, the Company is required to maintain
Total Unencumbered Assets (as defined below) of not less than 150% of the aggregate outstanding
principal amount of the Companys Unsecured Debt (as defined below). For purposes of this
requirement, the following capitalized terms shall be defined as follows:
Total Unencumbered Assets means the sum of (i) those Undepreciated Real Estate Assets (as
defined below) not subject to an encumbrance and (ii) all other assets of the Company and its
Subsidiaries (as defined below) not subject to encumbrance determined in accordance with generally
accepted accounting principles (but excluding accounts receivable and intangibles).
Subsidiaries means a corporation, a limited liability company or a partnership a majority of
the outstanding voting stock, limited liability company or partnership interests, as the case may
be, of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries
of the Company. For purposes of this definition, voting stock means stock having voting power
for the election of directors, managing members or trustees, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
Undepreciated Real Estate Assets as of any date means the original cost plus capital
improvements of real estate assets of the Company and its Subsidiaries determined in accordance
with generally accepted accounting principles.
Unsecured Debt means debt of the Company or any Subsidiary which is not secured by any
mortgage, lien, charge, pledge or security interest of any kind upon any of their properties.
If an Event of Default shall occur and be continuing, the principal of the Notes may, and in
certain cases shall, be accelerated in the manner and with the effect provided in the Indenture.
10
The Indenture contains provisions for defeasance of (i) the entire indebtedness of the Notes
or (ii) certain covenants and Events of Default with respect to the Notes, in each case upon
compliance with certain conditions set forth therein, which provisions apply to the Notes.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Debt Securities at any time by the Company and the Trustee with the consent of the Holders of a
majority of the aggregate principal amount of all Debt Securities at the time outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders of a majority of
the aggregate principal amount of the outstanding Debt Securities of any series, on behalf of the
Holders of all such Debt Securities, to waive compliance by the Company with certain provisions of
the Indenture. Furthermore, provisions in the Indenture permit the Holders of a majority of the
aggregate principal amount of the outstanding Debt Securities of any series, in certain instances,
to waive, on behalf of all of the Holders of Debt Securities of such series, certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note
shall be conclusive and binding upon such Holder and upon all future Holders of this Note and other
Notes issued upon the registration of transfer hereof or in exchange heretofore or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay
principal, premium, if any, and interest in respect of this Note at the times, places and rate or
formula, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein [and
herein]
8
set forth, the transfer of this Note is registrable in the Security Register of
the Company upon surrender of this Note for registration of transfer at the office or agency of the
Company in any place where the principal hereof and any premium or interest hereon are payable,
duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes having the same terms and provisions, of
Authorized Denominations and for the same aggregate principal amount, will be issued by the Company
to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein [and
herein]
9
set forth, this Note is exchangeable for a like aggregate principal amount of
Notes of different Authorized Denominations but otherwise having the same terms and provisions, as
requested by the Holder hereof surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
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8
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This text applies to global Notes only.
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9
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This text applies to global Notes only.
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11
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Holder as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary, except as required by law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE COMMONWEALTH OF VIRGINIA.
12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Note, shall be
construed as though they were written out in full according to applicable laws or regulations:
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TEN COM
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as tenants in common
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UNIF GIFT MIN ACT
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Custodian
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TEN ENT
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as tenants by the entireties
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(Cust) (Minor)
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JT TEN
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as joint tenants with right
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under Uniform Gifts to
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of survivorship and not as
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Minors Act
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tenants in common
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(State)
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Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
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PLEASE INSERT SOCIAL SECURITY OR
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OTHER
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IDENTIFYING NUMBER OF ASSIGNEE
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(Please print or typewrite name and address including postal zip code of assignee)
this Note and all rights thereunder hereby irrevocably constituting and appointing
Attorney to transfer this Note on the books of the Company, with full power of substitution in the
premises.
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Dated:
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Notice: The signature(s) on this Assignment must correspond with
the name(s) as written upon the face of this Note in every
particular, without alteration or enlargement or any change
whatsoever.
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13
[OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company to repay this Note
(or portion hereof specified below) pursuant to its terms at a price equal to 100% of the principal
amount to be repaid, together with unpaid interest accrued hereon to the Repayment Date, to the
undersigned, at
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate trust office in the
Borough of Manhattan, The City of New York, currently located at 40 Broad Street, 5
th
Floor, New York, New York 10004, not more than 60 nor less than 30 calendar days prior to the
Repayment Date, this Note with this Option to Elect Repayment form duly completed.
If less than the entire principal amount of this Note is to be repaid, specify the portion
hereof (which shall be increments of U.S. $1,000 or other integral multiple of an Authorized
Denomination) (provided that any remaining principal amount shall be at least U.S. $1,000 or such
other minimum Authorized Denomination) which the Holder elects to have repaid and specify the
denomination or denominations (which shall be U.S. $1,000 or such other minimum Authorized
Denomination) of the Notes to be issued to the Holder for the portion of this Note not being repaid
(in the absence of any such specification, one such Note will be issued for the portion not being
repaid).
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Name:
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Capacity:
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Address:
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Telephone No.:
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Tax Identification
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or Social Security No.:
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Principal Amount
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to be Repaid: $
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Notice: The signature(s) on
this Option to Elect Repayment
must correspond with the name(s) as written
upon the face of this Note in every
particular, without alteration or enlargement
or any change
whatsoever.]
10
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Medallion Signature Guarantee
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This form applies to certificated Notes only.
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14
UDR, INC.
ADDENDUM
TO MEDIUM-TERM NOTE
11
(Fixed Rate)
[The Company may redeem all or part of this Note at any time at its option at a redemption
price equal to the greater of (1) the principal amount of this Note being redeemed plus accrued and
unpaid interest to the redemption date or (2) the Make-Whole Amount for the principal amount of
this Note being redeemed.
Make-Whole Amount means, as determined by the Quotation Agent, the sum of the present values
of the principal amount of this Note to be redeemed, together with the scheduled payments of
interest (exclusive of interest to the redemption date) from the redemption date to the maturity
date of this Note being redeemed, in each case discounted to the redemption date on a semi-annual
basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate,
plus accrued and unpaid interest on the principal amount of this Note being redeemed to the
redemption date.
Adjusted Treasury Rate means, with respect to any redemption date, the sum of (x) either (1)
the yield for the maturity corresponding to the Comparable Treasury Issue, under the heading that
represents the average for the immediately preceding week, appearing in the most recent published
statistical release designated H.15 (519) or any successor publication that is published weekly
by the Board of Governors of the Federal Reserve System and that establishes yields on actively
traded United States Treasury securities adjusted to constant maturity under the caption Treasury
Constant Maturities (provided, if no maturity is within three months before or after the remaining
term of this Note, yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated
or extrapolated from such yields on a straight line basis, rounded to the nearest month) or (2) if
such release (or any successor release) is not published during the week preceding the calculation
date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield
to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price
for such redemption date, in each case calculated on the third business day preceding the
redemption date, and (y) ___%.
Comparable Treasury Issue means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term from the redemption date to
the maturity date of this Note that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of this Note.
Comparable Treasury Price means, with respect to any redemption date, (x) the average of
three Reference Treasury Dealer Quotations for such redemption date, after excluding the highest
and lowest Reference Treasury Dealer Quotations so obtained or (y) if fewer than five Reference
Treasury Dealer Quotations are so obtained, the average of all such Reference Treasury Dealer
Quotations so obtained.
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11
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Include if applicable.
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15
Quotation Agent means the Reference Treasury Dealer selected by the indenture trustee after
consultation with the Company.
Reference
Treasury Dealer means any of ___________________________, _________________________, their respective successors and assigns and three other nationally recognized investment banking
firm selected by the Company that is a primary U.S. Government securities dealer.
Reference Treasury Dealer Quotations means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the indenture trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the indenture trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third business day preceding such
redemption date.]
16
EXHIBIT 4.02
FORM OF FLOATING RATE NOTE
[FACE OF NOTE]
[UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE
DEPOSITARY) (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER HEREOF OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.]
1
[IF THIS NOTE IS AN ORIGINAL ISSUE DISCOUNT NOTE, INSERT THE FOLLOWING LANGUAGE: FOR PURPOSES OF
SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT ON THIS NOTE IS % OF ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS [AND] THE YIELD TO MATURITY
IS %. [THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT
ACCRUAL PERIOD OF , 20 TO , 20 , IS % OF THE PRINCIPAL AMOUNT OF THIS NOTE.]]
[IF THIS NOTE IS SUBJECT TO THE CONTINGENT PAYMENT DEBT REGULATIONS, ALSO INSERT THE FOLLOWING
LANGUAGE: IN ADDITION, THIS NOTE IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS
GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE
UNITED STATES INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH NOTE IS $[ ] PER $1,000 OF PRINCIPAL
AMOUNT AND THE COMPARABLE YIELD IS [ ]%, COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE TREATED AS THE
YIELD FOR UNITED STATES FEDERAL INCOME TAX PURPOSES). THE COMPANY AGREES TO PROVIDE PROMPTLY TO THE
HOLDER OF THIS NOTE, UPON WRITTEN REQUEST, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD
TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE
SENT TO THE COMPANY AT THE FOLLOWING ADDRESS: [ ].]
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1
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This paragraph applies to global Notes only.
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REGISTERED
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CUSIP No.:
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PRINCIPAL AMOUNT:
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No. FLR-
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UDR, INC.
MEDIUM-TERM NOTE, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(Floating Rate)
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INTEREST RATE BASIS OR BASES:
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ORIGINAL ISSUE DATE:
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STATED MATURITY DATE:
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IF LIBOR:
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IF FEDERAL FUNDS
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IF CMT RATE:
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o
Designated LIBOR Currency:
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o
Federal Funds (Effective) Rate
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o
Reuters Page FRBCMT
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o
Federal Funds Open Rate
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o
Reuters Page FEDCMT:
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o
Federal Funds Target Rate
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o
Weekly Average
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o
Monthly Average
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INDEX MATURITY:
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INITIAL INTEREST RATE: %
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INTEREST PAYMENT DATE(S):
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SPREAD (PLUS OR MINUS):
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SPREAD MULTIPLIER:
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INITIAL INTEREST RESET DATE:
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MINIMUM INTEREST RATE: %
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MAXIMUM INTEREST RATE: %
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INTEREST RESET DATE(S):
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INITIAL REDEMPTION DATE:
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INITIAL REDEMPTION PERCENTAGE: %
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ANNUAL REDEMPTION PERCENTAGE REDUCTION: %
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OPTIONAL REPAYMENT DATE(S):
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CALCULATION AGENT:
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o
CHECK IF DISCOUNT NOTE
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Issue Price: %
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DEFAULT INTEREST RATE %
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INTEREST CATEGORY:
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DAY COUNT CONVENTION:
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o
Regular Floating Rate Note
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o
30/360 for the period
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o
Floating Rate/Fixed Rate Note
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from to .
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Fixed Rate Commencement Date:
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o
Actual/360 for the period
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Fixed Interest Rate: %
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from to .
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o
Inverse Floating Rate Note
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o
Actual/Actual for the period
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Fixed Interest Rate: %
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from to .
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Applicable Interest Rate Basis:
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SPECIFIED CURRENCY:
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AUTHORIZED DENOMINATION:
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o
United States dollars
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o
$1,000 and integral multiples thereof
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o
Other:
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o
Other:
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EXCHANGE RATE AGENT:
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ADDENDUM ATTACHED
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o
Yes
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o
No
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OTHER/ADDITIONAL PROVISIONS:
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2
UDR, INC.
, a Maryland corporation (the Company, which term includes any successor
corporation under the Indenture hereinafter referred to), for value received, hereby promises to
pay to , or registered assigns, the Principal Amount of
, on the Stated Maturity Date specified above (or any Redemption Date or Repayment Date, each as
defined on the reverse hereof, or any earlier date of acceleration of maturity) (each such date
being hereinafter referred to as the Maturity Date with respect to the principal repayable on
such date) and to pay interest thereon (and on any overdue principal, premium and/or interest to
the extent legally enforceable) at a rate per annum equal to the Initial Interest Rate specified
above until the Initial Interest Reset Date specified above and thereafter at a rate determined in
accordance with the provisions specified above and on the reverse hereof or in an Addendum hereto
with respect to one or more Interest Rate Bases specified above until the principal hereof is paid
or duly made available for payment. The Company will pay interest in arrears on each Interest
Payment Date, if any, specified above (each, an Interest Payment Date), commencing with the first
Interest Payment Date next succeeding the Original Issue Date specified above, and on the Maturity
Date;
provided
,
however
, that if the Original Issue Date occurs between a Record
Date (as defined below) and the next succeeding Interest Payment Date, interest payment will
commence on the Interest Payment Date immediately following the next succeeding Record Date to the
registered holder (the Holder) of this Note on the next succeeding Record Date.
Interest on this Note will accrue from, and including, the immediately preceding Interest
Payment Date to which interest has been paid or duly provided for (or from, and including, the
Original Issue Date if no interest has been paid or duly provided for) to, but excluding, the
applicable Interest Payment Date or the Maturity Date, as the case may be (each, an Interest
Period). The interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to the person in whose
name this Note (or one or more predecessor Notes, as defined on the reverse hereof) is registered
at the close of business on the fifteenth calendar day (whether or not a Business Day, as defined
below) immediately preceding such Interest Payment Date (the Record Date);
provided
,
however
, that interest payable on the Maturity Date will be payable to the person to whom
the principal hereof and premium, if any, hereon shall be payable. Any such interest not so
punctually paid or duly provided for on any Interest Payment Date other than the Maturity Date
(Defaulted Interest) shall forthwith cease to be payable to the Holder on the close of business
on any Record Date and, instead, shall be paid to the person in whose name this Note is registered
at the close of business on a special record date (the Special Record Date) for the payment of
such Defaulted Interest to be fixed by the Trustee hereinafter referred to, notice whereof shall be
given to the Holder of this Note by the Trustee not less than 10 calendar days prior to such
Special Record Date or may be paid at any time in any other lawful manner, all as more fully
provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this Note due on the
Maturity Date will be made in immediately available funds upon presentation and surrender of this
Note (and, with respect to any applicable repayment of this Note, upon delivery of [a duly
completed election form]
2
[instructions]
3
as contemplated on the reverse
hereof) at the office or
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2
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This text applies to certificated Notes only.
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3
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This texts applies to global Notes only.
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3
agency maintained by the Company for that purpose in the Borough of Manhattan, The City of New
York, currently the corporate trust office of the Trustee located at 40 Broad Street,
5
th
Floor, New York, New York 10004, or at such other paying agency in the Borough of
Manhattan, The City of New York, as the Company may determine;
provided
,
however
,
that if the Specified Currency (as defined below) is other than United States dollars and such
payment is to be made in the Specified Currency in accordance with the provisions set forth below,
such payment will be made by wire transfer of immediately available funds to an account with a bank
designated by the Holder hereof at least 15 calendar days prior to the Maturity Date, provided that
such bank has appropriate facilities therefor and that this Note is presented and surrendered and,
if applicable, [a duly completed repayment election form is]
4
[instructions
are]
5
delivered at the aforementioned office or agency maintained by the Company in time
for the Trustee to make such payment in such funds in accordance with its normal procedures.
Payment of interest due on any Interest Payment Date other than the Maturity Date will be made at
the aforementioned office of agency maintained by the Company or, at the option of the Company, by
check mailed to the address of the person entitled thereto as such address shall appear in the
Security Register maintained by the Trustee;
provided
,
however
, that a Holder of
U.S.$10,000,000 (or, if the Specified Currency is other than United States dollars, the equivalent
thereof in the Specified Currency) or more in aggregate principal amount of Notes (whether having
identical or different terms and provisions) will be entitled to receive interest payments on such
Interest Payment Date by wire transfer of immediately available funds if such Holder has delivered
appropriate wire transfer instructions in writing to the Trustee not less than 15 calendar days
prior to such Interest Payment Date. Any such wire transfer instructions received by the Trustee
shall remain in effect until revoked by such Holder.
If any Interest Payment Date other than the Maturity Date would otherwise be a day that is not
a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day,
except that if LIBOR is an applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business
Day. If the Maturity Date falls on a day that is not a Business Day, the required payment of
principal, premium, if any, and/or interest shall be made on the next succeeding Business Day with
the same force and effect as if made on the date such payment was due, and no interest shall accrue
with respect to such payment for the period from and after the Maturity Date to the date of such
payment on the next succeeding Business Day.
As used herein, Business Day means any day, other than a Saturday or Sunday, that is neither
a legal holiday nor a day on which commercial banks are authorized or required by law, regulation
or executive order to close in The City of New York;
provided
,
however
, that if the
Specified Currency is other than United States dollars, such day must also not be a day on which
commercial banks are authorized or required by law, regulation or executive order to close in the
Principal Financial Center (as defined below) of the country issuing the Specified Currency (or, if
the Specified Currency is Euro, such day must also be a day on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer (TARGET) System is open);
provided
,
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4
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This texts applies to certificated Notes only.
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5
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This texts applies to global Notes only.
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4
further
, that if LIBOR is an applicable Interest Rate Basis, such day must also be a
London Banking Day (as defined below). London Banking Day means a day on which commercial banks
are open for business (including dealings in the Designated LIBOR Currency (as defined on the
reverse hereof)) in London. Principal Financial Center means (i) the capital city of the country
issuing the Specified Currency or (ii) the capital city of the country to which the Designated
LIBOR Currency relates, as applicable, except, in the case of (i) or (ii), that with respect to
United States dollars, Australian dollars, Canadian dollars, Euros, New Zealand dollars, South
African rands and Swiss francs, the Principal Financial Center shall be The City of New York,
Sydney, Toronto, London (solely in the case of the Designated LIBOR Currency), Wellington,
Johannesburg and Zurich, respectively.
The Company is obligated to make payment of principal, premium, if any, and interest in
respect of this Note in the currency in which this Note is denominated above (or, if such currency
is not at the time of such payment legal tender for the payment of public and private debts in the
country issuing such currency or, if such currency is Euro, in the member states of the European
Union that have adopted the single currency in accordance with the Treaty establishing the European
Community, as amended by the Treaty on European Union, then the currency which is at the time of
such payment legal tender in the related country or in the adopting member states of the European
Union, as the case may be) (the Specified Currency). If the Specified Currency is other than
United States dollars, except as otherwise provided below, any such amounts so payable by the
Company will be converted by the Exchange Rate Agent specified above into United States dollars for
payment to the Holder of this Note.
Any United States dollar amount to be received by the Holder of this Note will be based on the
highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately
11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date
from three recognized foreign exchange dealers (one of whom may be the Exchange Rate Agent)
selected by the Exchange Rate Agent and approved by the Company for the purchase by the quoting
dealer of the Specified Currency for United States dollars for settlement on such payment date in
the aggregate amount of the Specified Currency payable to all Holders of Notes scheduled to receive
United States dollar payments and at which the applicable dealer commits to execute a contract.
All currency exchange costs will be borne by the Holder of this Note by deductions from such
payments. If three such bid quotations are not available, payments on this Note will be made in
the Specified Currency.
If the Specified Currency is other than United States dollars, the Holder of this Note may
elect to receive all or a specified portion of any payment of principal, premium, if any, and/or
interest, if any, in respect of this Note in the Specified Currency by submitting a written request
for such payment to the Trustee at its corporate trust office in The City of New York on or prior
to the applicable Record Date or at least 15 calendar days prior to the Maturity Date, as the case
may be. Such written request may be mailed or hand delivered or sent by cable, telex or other form
of facsimile transmission. The Holder of this Note may elect to receive all or a specified portion
of all future payments in the Specified Currency in respect of such principal, premium, if any,
and/or interest, if any, and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice delivered to the Trustee, but written notice
of any such revocation must be received by the Trustee on or prior to the applicable Record Date or
at least 15 calendar days prior to the Maturity Date, as the case may be.
5
If the Specified Currency is other than United States dollars or a composite currency and the
Holder of this Note shall have duly made an election to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest, if any, in respect of this Note in the
Specified Currency, but the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company will be entitled to
satisfy its obligations to the Holder of this Note by making such payment in United States dollars
on the basis of the Market Exchange Rate (as defined below) determined by the Exchange Rate Agent
on the second Business Day prior to such payment date or, if such Market Exchange Rate is not then
available, on the basis of the most recently available Market Exchange Rate. The Market Exchange
Rate for the Specified Currency other than United States dollars means the noon dollar buying rate
in The City of New York for cable transfers for the Specified Currency as certified for customs
purposes (or, if not so certified, as otherwise determined) by the Federal Reserve Bank of New
York. Any payment made in United States dollars under such circumstances shall not constitute an
Event of Default (as defined in the Indenture).
All determinations referred to above made by the Exchange Rate Agent shall be at its sole
discretion and shall, in the absence of manifest error, be conclusive for all purposes and binding
on the Holder of this Note.
The Company agrees to indemnify the Holder of any Note against any loss incurred by such
Holder as a result of any judgment or order being given or made against the Company for any amount
due hereunder and such judgment or order requiring payment in a currency (the Judgment Currency)
other than the Specified Currency, and as a result of any variation between (i) the rate of
exchange at which the Specified Currency amount is converted into the Judgment Currency for the
purpose of such judgment or order, and (ii) the rate of exchange at which such Holder, on the date
of payment of such judgment or order, is able to purchase the Specified Currency with the amount of
the Judgment Currency actually received by such Holder, as the case may be. The foregoing
indemnity constitutes a separate and independent obligation of the Company and continues in full
force and effect notwithstanding any such judgment or order as aforesaid. The term rate of
exchange includes any premiums and costs of exchange payable in connection with the purchase of,
or conversion into, the relevant currency.
Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof and, if so specified on the face hereof, in an Addendum hereto, which further provisions
shall have the same force and effect as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or Other/Additional
Provisions apply to this Note as specified above, this Note shall be subject to the terms set
forth in such Addendum or such Other/Additional Provisions.
Unless the Certificate of Authentication hereon has been executed by the Trustee by manual
signature, this Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
6
IN WITNESS WHEREOF, UDR, Inc. has caused this Note to be duly executed by one of its duly
authorized officers.
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UDR, INC.
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By
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Name:
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Title:
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Dated:
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ATTEST:
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By
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Name:
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Title:
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TRUSTEES CERTIFICATE OF AUTHENTICATION:
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This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.
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U.S. BANK NATIONAL ASSOCIATION, as Trustee
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By
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Authorized Signatory
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7
[REVERSE OF NOTE]
UDR, INC.
MEDIUM-TERM NOTE, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(Floating Rate)
This Note is one of a duly authorized series of Debt Securities (the Debt Securities) of the
Company issued and to be issued under an Indenture, dated as of November 1, 1995, as amended,
modified or supplemented from time to time (the Indenture), between the Company (successor by
merger to United Dominion Realty Trust, Inc., a Virginia corporation) and U.S. Bank National
Association, successor trustee to Wachovia Bank, National Association (formerly known as First
Union National Bank of Virginia), as trustee (the Trustee, which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the Debt Securities, and of
the terms upon which the Debt Securities are, and are to be, authenticated and delivered. This
Note is one of the series of Debt Securities designated as Medium-Term Notes, Series A Due Nine
Months or More From Date of Issue (the Notes). All terms used but not defined in this Note or
in an Addendum hereto shall have the meanings assigned to such terms in the Indenture or on the
face hereof, as the case may be.
This Note is issuable only in registered form without coupons in minimum denominations of
U.S.$1,000 and integral multiples thereof or other Authorized Denomination specified on the face
hereof.
This Note will not be subject to any sinking fund and, unless otherwise specified on the face
hereof in accordance with the provisions of the following two paragraphs, will not be redeemable or
repayable prior to the Stated Maturity Date.
This Note will be subject to redemption at the option of the Company on any date on or after
the Initial Redemption Date, if any, specified on the face hereof, in whole or from time to time in
part in increments of U.S.$1,000 or other integral multiple of an Authorized Denomination (provided
that any remaining principal amount hereof shall be at least U.S.$1,000 or such other minimum
Authorized Denomination), at the Redemption Price (as defined below), together with unpaid interest
accrued thereon to the date fixed for redemption (the Redemption Date), on written notice given
to the Holder hereof (in accordance with the provisions of the Indenture) not more than 60 nor less
than 30 calendar days prior to the Redemption Date. The Redemption Price shall be an amount
equal to the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof) multiplied by the unpaid
principal amount of this Note to be redeemed. The Initial Redemption Percentage, if any, shall
decline at each anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction, if any, until the Redemption Price is 100% of unpaid principal amount to be redeemed.
In the event of redemption of this Note in part only, a new Note of like tenor for the unredeemed
portion hereof and otherwise having the same
8
terms and provisions as this Note shall be issued by the Company in the name of the Holder
hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of the Holder hereof on
the Optional Repayment Date(s), if any, specified on the face hereof, in whole or from time to time
in part in increments of U.S.$1,000 or other integral multiple of an Authorized Denomination
(provided that any remaining principal amount hereof shall be at least U.S.$1,000 or such other
minimum Authorized Denomination), at a repayment price equal to 100% of the unpaid principal amount
to be repaid, together with unpaid interest accrued thereon to the date fixed for repayment (the
Repayment Date). For this Note to be repaid, the Trustee must receive at its corporate trust
office in the Borough of Manhattan, the City of New York, not more than 60 nor less than 30
calendar days prior to the Repayment Date, such Note and [the form thereon entitled Option to
Elect Repayment duly completed]
6
[instructions to such effect forwarded by the Holder
hereof].
7
Exercise of such repayment option by the Holder hereof shall be irrevocable.
In the event of repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms and provisions as this Note shall be issued by
the Company in the name of the Holder hereof upon the presentation and surrender hereof.
If this Note is specified on the face hereof to be a Discount Note, the amount payable to the
Holder of this Note in the event of redemption, repayment or acceleration of maturity of this Note
will be equal to the sum of (1) the Issue Price specified on the face hereof (increased by any
accruals of the Discount, as defined below) and, in the event of any redemption of this Note (if
applicable), multiplied by the Initial Redemption Percentage (as adjusted by the Annual Redemption
Percentage Reduction, if applicable) and (2) any unpaid interest accrued thereon to the Redemption
Date, Repayment Date or date of acceleration of maturity, as the case may be. The difference
between the Issue Price and 100% of the principal amount of this Note is referred to herein as the
Discount.
For purposes of determining the amount of Discount that has accrued as of any Redemption Date,
Repayment Date or date of acceleration of maturity of this Note, such Discount will be accrued so
as to cause an assumed yield on the Note to be constant. The assumed constant yield will be
calculated using a 30-day month, 360-day year convention, a compounding period that, except for the
Initial Period (as defined below), corresponds to the shortest period between Interest Payment
Dates (with ratable accruals within a compounding period), a coupon rate equal to the initial
interest rate applicable to this Note and an assumption that the maturity of this Note will not be
accelerated. If the period from the Original Issue Date to the initial Interest Payment Date (the
Initial Period) is shorter than the compounding period for this Note, a proportionate amount of
the yield for an entire compounding period will be accrued. If the Initial Period is longer than
the compounding period, then such period will be divided into a regular compounding period and a
short period, with the short period being treated as provided in the preceding sentence.
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6
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This texts applies to certificated Notes only.
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7
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This text applies to global Notes only.
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9
The interest rate borne by this Note will be determined as follows:
(i) Unless the Interest Category of this Note is specified on the face hereof as a
Floating Rate/Fixed Rate Note or an Inverse Floating Rate Note or the face hereof
specifies that either Other/Additional Provisions or an Addendum hereto applies, in each
case, relating to a different interest rate formula, this Note shall be designated as a
Regular Floating Rate Note and, except as set forth below or specified on the face hereof
or in an Addendum hereto, shall bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the Spread, if any, and/or (b)
multiplied by the Spread Multiplier, if any, in each case as specified on the face hereof.
Commencing on the Initial Interest Reset Date, the rate at which interest on this Note shall
be payable shall be reset as of each Interest Reset Date specified on the face hereof;
provided
,
however
, that the interest rate in effect for the period, if any,
from the Original Issue Date to the Initial Interest Reset Date shall be the Initial
Interest Rate.
(ii) If the Interest Category of this Note is specified on the face hereof as a
Floating Rate/Fixed Rate Note, then, except as set forth below or specified on the face
hereof or in an Addendum hereto, this Note shall bear interest at the rate determined by
reference to the applicable Interest Rate Basis or Bases (a) plus or minus the Spread, if
any, and/or (b) multiplied by the Spread Multiplier, if any. Commencing on the Initial
Interest Reset Date, the rate at which interest on this Note shall be payable shall be reset
as of each Interest Reset Date;
provided
,
however
, that (y) the interest
rate in effect for the period, if any, from the Original Issue Date to the Initial Interest
Reset Date shall be the Initial Interest Rate and (z) the interest rate in effect for the
period commencing on the Fixed Rate Commencement Date specified on the face hereof to the
Maturity Date shall be the Fixed Interest Rate specified on the face hereof or, if no Fixed
Interest Rate is so specified, the interest rate in effect on the day immediately preceding
the Fixed Rate Commencement Date.
(iii) If the Interest Category of this Note is specified on the face hereof as an
Inverse Floating Rate Note, then, except as set forth below or specified on the face
hereof or in an Addendum hereto, this Note shall bear interest at the Fixed Interest Rate
minus the rate determined by reference to the applicable Interest Rate Basis or Bases (a)
plus or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if any;
provided
,
however
, that, unless otherwise specified on the face hereof or in
an Addendum hereto, the interest rate hereon shall not be less than zero. Commencing on the
Initial Interest Reset Date, the rate at which interest on this Note shall be payable shall
be reset as of each Interest Reset Date; and provided, further, that the interest rate in
effect for the period, if any, from the Original Issue Date to the Initial Interest Reset
Date shall be the Initial Interest Rate.
Except as set forth above or specified on the face hereof or in an Addendum hereto, the
interest rate in effect on each day shall be based on: (i) if such day is an Interest Reset Date,
the rate determined as of the Interest Determination Date (as defined below) immediately preceding
such Interest Reset Date; or (ii) if such day is not an Interest Reset Date, the rate determined as
of the Interest Determination Date immediately preceding the most recent Interest Reset Date;
provided, however, that the interest rate for the period, if any, from the Original Issue Date to
the
10
Initial Interest Reset Date shall be the Initial Interest Rate. If any Interest Reset Date
would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to
the next succeeding Business Day, except that if LIBOR is an applicable Interest Rate Basis and
such Business Day falls in the next succeeding calendar month, such Interest Reset Date shall be
the immediately preceding Business Day. In addition, if the Treasury Rate is an applicable
Interest Rate Basis and the Interest Determination Date would otherwise fall on an Interest Reset
Date, then such Interest Reset Date will be postponed to the next succeeding Business Day.
The interest rate applicable to each Interest Reset Period commencing on the related Interest
Reset Date will be determined by the Calculation Agent specified on the face hereof as of the
applicable Interest Determination Date and will be calculated by the Calculation Agent on or prior
to the Calculation Date (as defined below), except with respect to LIBOR and the Eleventh District
Cost of Funds Rate, which will be calculated on such Interest Determination Date. The Interest
Determination Date with respect to the Federal Funds Rate and the Prime Rate will be the Business
Day immediately preceding the applicable Interest Reset Date; the Interest Determination Date
with respect to the CD Rate, the CMT Rate and the Commercial Paper Rate will be the second Business
Day immediately preceding the applicable Interest Reset Date; the Interest Determination Date
with respect to the Eleventh District Cost of Funds Rate shall be the last working day of the month
immediately preceding the applicable Interest Reset Date on which the Federal Home Loan Bank of San
Francisco (the FHLB of San Francisco) publishes the Index (as defined below); and the Interest
Determination Date with respect to LIBOR shall be the second London Banking Day immediately
preceding the applicable Interest Reset Date, unless the Designated LIBOR Currency is British
pounds sterling, in which case the Interest Determination Date will be the applicable Interest
Reset Date. The Interest Determination Date with respect to the Treasury Rate shall be the day
in the week in which the applicable Interest Reset Date falls on which day Treasury Bills (as
defined below) are normally auctioned (Treasury Bills are normally sold at an auction held on
Monday of each week, unless such Monday is a legal holiday, in which case the auction is normally
held on the immediately succeeding Tuesday, although such auction may be held on the preceding
Friday);
provided
,
however
, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the Interest Determination Date shall be such
preceding Friday. If the interest rate of this Note is determined with reference to two or more
Interest Rate Bases specified on the face hereof, the Interest Determination Date pertaining to
this Note shall be the most recent Business Day which is at least two Business Days prior to the
applicable Interest Reset Date on which each Interest Rate Basis is determinable.
Unless otherwise specified on the face hereof or in an Addendum hereto, the rate with respect
to each Interest Rate Basis will be determined in accordance with the applicable provisions below.
CD Rate
. If an Interest Rate Basis for this Note is specified on the face hereof as
the CD Rate, the CD Rate shall be determined as of the applicable Interest Determination Date (a
CD Rate Interest Determination Date) as:
(1) the rate on such Interest Determination Date for negotiable United States dollar
certificates of deposit having the Index Maturity specified on the face hereof as published in
H.15(519) (as defined below) under the caption CDs (secondary market), or
11
(2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the rate on such CD Rate Interest Determination Date for
negotiable United States dollar certificates of deposit of the Index Maturity as published in H.15
Daily Update (as defined below), or such other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption CDs (secondary market), or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the rate on such CD Rate Interest Determination Date calculated by
the Calculation Agent as the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such CD Rate Interest Determination Date, of three leading nonbank
dealers in negotiable United States dollar certificates of deposit in The City of New York selected
by the Calculation Agent for negotiable United States dollar certificates of deposit of major
United States money market banks for negotiable United States dollar certificates of deposit with a
remaining maturity closest to the Index Maturity in an amount that is representative for a single
transaction in such market at such time, or
(4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause
(3), the CD Rate in effect on such CD Rate Interest Determination Date.
H.15(519) means the weekly statistical release designated as H.15(519), or any successor
publication, published by the Board of Governors of the Federal Reserve System.
H.15 Daily Update means the daily update of H.15(519), available through the world-wide-web
site of the Board of Governors of the Federal Reserve System at
http://www.federalreserve/releases/h15/update, or any successor site or publication.
CMT Rate
. If an Interest Rate Basis for this Note is specified on the face hereof as
the CMT Rate, the CMT Rate shall be determined by the Calculation Agent as of the applicable
Interest Determination Date (a CMT Rate Interest Determination Date) in accordance with the
following provisions:
(1) if Reuters Page FRBCMT is specified on the face hereof:
(a) the percentage equal to the yield for United States Treasury securities at
constant maturity having the Index Maturity specified on the face hereof as published in
H.15(519) under the caption Treasury Constant Maturities, as such yield is displayed on
Reuters (or any successor service) on page FRBCMT (or any other page as may replace such
page on such service) (Reuters Page FRBCMT) or, if not so displayed, on the Bloomberg
service (or any successor service) on page NDX 7 (or any other page as may replace the
specified page on that service) (Bloomberg Page NDX 7), for such CMT Rate Interest
Determination Date, or
(b) if the rate referred to in clause (a) does not so appear on Reuters Page FRBCMT or
Bloomberg Page NDX 7, as the case may be, on the related Calculation Date, the percentage
equal to the yield for United States Treasury securities at constant maturity having the
Index Maturity and for such CMT Rate Interest Determination Date as published in H.15(519)
under the caption Treasury Constant Maturities, or
12
(c) if the rate referred to in clause (b) does not appear in H15(519) on the related
Calculation Date, the rate on such CMT Rate Interest Determination Date for the period of
the Index Maturity as may then be published by either the Federal Reserve System Board of
Governors or the United States Department of the Treasury that the Calculation Agent
determines to be comparable to the rate which would otherwise have been published in
H.15(519), or
(d) if the rate referred to in clause (c) is not so published on the related
Calculation Date, the rate on such CMT Rate Interest Determination Date calculated by the
Calculation Agent as a yield-to-maturity based on the arithmetic mean of the secondary
market bid prices at approximately 3:30 P.M., New York City time, on such CMT Rate Interest
Determination Date of three leading primary United States government securities dealers in
The City of New York (each, a Reference Dealer) selected by the Calculation Agent (from
five such Reference Dealers and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)) for United States Treasury securities with an original maturity equal to the
Index Maturity, a remaining term to maturity no more than 1 year shorter than the Index
Maturity and in a principal amount that is representative for a single transaction in such
securities in such market at such time, or
(e) if fewer than five but more than two of the prices referred to in clause (d) are
provided as requested, the rate on such CMT Rate Interest Determination Date calculated by
the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither
the highest nor lowest of such quotations shall be eliminated, or
(f) if fewer than three prices referred to in clause (d) are provided as requested, the
rate on such CMT Rate Interest Determination Date calculated by the Calculation Agent as a
yield-to-maturity based on the arithmetic mean of the secondary market bid prices as of
approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of
three Reference Dealers selected by the Calculation Agent (from five such Reference Dealers
and eliminating the highest quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the lowest)) for United States
Treasury securities with an original maturity greater than the Index Maturity, a remaining
term to maturity closest to the Index Maturity and in a principal amount that is
representative for a single transaction in such securities in such market at such time, or
(g) if fewer than five but more than two such prices referred to in clause (f) are
provided as requested, the rate on such CMT Rate Interest Determination Date calculated by
the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither
the highest nor the lowest of such quotations shall be eliminated, or
(h) if fewer than three prices referred to in clause (f) are provided as requested, the
CMT Rate in effect on such CMT Rate Interest Determination Date. If two such United States
Treasury securities with an original maturity greater than the
13
Index Maturity have remaining terms to maturity equally close to the Index Maturity,
the quotes for the Treasury security with the shorter original term to maturity will be
used.
(2) If Reuters Page FEDCMT is specified on the face hereof:
(a) the percentage equal to the one-week or one-month, as specified on the face hereof,
average yield for United States Treasury securities at constant maturity having the Index
Maturity specified on the face hereof as published in H.15(519) opposite the caption
Treasury Constant Maturities, as such yield is displayed on Reuters (or any successor
service) on page FEDCMT (or any other page as may replace such page on such service )
(Reuters Page FEDCMT) or, if not so displayed, on the Bloomberg service) (or any successor
service) on page NDX 7 (or any other page as may replace the specified page on that service)
(Bloomberg Page NDX 7), for the week or month, as applicable, ended immediately preceding
the week or month, as applicable, in which such CMT Rate Interest Determination Date falls,
or
(b) if the rate referred to in clause (a) does not so appear on the Reuters Page FEDCMT
or Bloomberg Page NDX 7, as the case may be, on the related Calculation Date, the percentage
equal to the one-week or one-month, as specified on the face hereof, average yield for
United States Treasury securities at constant maturity having the Index Maturity and for
the week or month, as applicable, preceding such CMT Rate Interest Determination Date as
published in H.15(519) opposite the caption Treasury Constant Maturities, or
(c) if the rate referred to in clause (b) does not appear in H15(519) on the related
Calculation Date, the one-week or one-month, as specified on the face hereof, average yield
for United States Treasury securities at constant maturity having the Index Maturity as
otherwise announced by the Federal Reserve Bank of New York for the week or month, as
applicable, ended immediately preceding the week or month, as applicable, in which such CMT
Rate Interest Determination Date falls, or
(d) if the rate referred to in clause (c) is not so published on the related
Calculation Date, the rate on such CMT Rate Interest Determination Date calculated by the
Calculation Agent as a yield-to-maturity based on the arithmetic mean of the secondary
market bid prices at approximately 3:30 P.M., New York City time, on such CMT Rate Interest
Determination Date of three Reference Dealers selected by the Calculation Agent (from five
such Reference Dealers and eliminating the highest quotation (or, in the event of equality,
one of the highest) and the lowest quotation (or, in the event of equality, one of the
lowest)) for United States Treasury securities with an original maturity equal to the Index
Maturity, a remaining term to maturity of no more than 1 year shorter than the Index
Maturity and in a principal amount that is representative for a single transaction in such
securities in such market at such time, or
(e) if fewer than five but more than two of the prices referred to in clause (d) are
provided as requested, the rate on such CMT Rate Interest Determination Date calculated by
the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither
the highest nor lowest of such quotations shall be eliminated, or
14
(f) if fewer than three prices referred to in clause (d) are provided as requested, the
rate on such CMT Rate Interest Determination Date calculated by the Calculation Agent as a
yield-to-maturity based on the arithmetic mean of the secondary market bid prices as of
approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of
three Reference Dealers selected by the Calculation Agent (from five such Reference Dealers
and eliminating the highest quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the lowest)) for United States
Treasury securities with an original maturity longer than the Index Maturity, a remaining
term to maturity closest to the Index Maturity and in a principal amount that is
representative for a single transaction in such securities in such market at such time, or
(g) if fewer than five but more than two prices referred to in clause (f) are provided
as requested, the rate on such CMT Rate Interest Determination Date calculated by the
Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the
highest nor lowest of such quotations shall be eliminated, or
(h) if fewer than three prices referred to in clause (f) are provided as requested, the
CMT Rate in effect on such CMT Rate Interest Determination Date.
If two United States Treasury securities with an original maturity greater than the Index
Maturity have remaining terms to maturity equally close to the Index Maturity, the quotes for the
Treasury security with the shorter original term to maturity will be used.
Commercial Paper Rate
. If an Interest Rate Basis for this Note is specified on the
face hereof as the Commercial Paper Rate, the Commercial Paper Rate shall be determined as of the
applicable Interest Determination Date (a Commercial Paper Rate Interest Determination Date) as:
(1) the Money Market Yield (as defined below) on the Commercial Paper Rate Interest
Determination Date of the rate for commercial paper having the Index Maturity specified on the face
hereof as published in H.15(519) under the caption Commercial Paper-Nonfinancial, or
(2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the Money Market Yield of the rate on such Commercial Paper
Rate Interest Determination Date for commercial paper having the Index Maturity as published in
H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying
the applicable rate, under the caption Commercial Paper-Nonfinancial, or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the rate on such Commercial Paper Rate Interest Determination Date
calculated by the Calculation Agent as the Money Market Yield of the arithmetic mean of the offered
rates at approximately 11:00 A.M., New York City time, on such Commercial Paper Rate Interest
Determination Date of three leading dealers of United States dollar commercial paper in The City of
New York selected by the Calculation Agent for
15
commercial paper having the Index Maturity placed for industrial issuers whose bond rating is
Aa, or the equivalent, from a nationally recognized statistical rating organization, or
(4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause
(3), the Commercial Paper Rate in effect on such Commercial Paper Rate Interest Determination Date.
Money Market Yield means a yield (expressed as a percentage) calculated in accordance with
the following formula:
|
|
|
|
|
Money Market Yield =
|
|
D
x
360
360 (D
x
M)
|
|
x
100
|
where D refers to the applicable per annum rate for commercial paper quoted on a bank discount
basis and expressed as a decimal, and M refers to the actual number of days in the applicable
Interest Reset Period.
Designated LIBOR Currency
means the currency specified on the face hereof as to which
LIBOR shall be calculated or, if no such currency is specified on the face hereof, United States
dollars.
Eleventh District Cost of Funds Rate
. If an Interest Rate Basis for this Note is
specified on the face hereof as the Eleventh District Cost of Funds Rate, the Eleventh District
Cost of Funds Rate shall be determined as of the applicable Interest Determination Date (an
Eleventh District Cost of Funds Rate Interest Determination Date) as:
(1) the rate equal to the monthly weighted average cost of funds for the calendar month
immediately preceding the month in which such Eleventh District Cost of Funds Rate Interest
Determination Date falls as set forth under the caption 11th District on the display on Reuters
(or any successor service) on page COFI/ARMS (or any other page as may replace such page on such
service) (Reuters Page COFI/ARMS) or, if not so displayed, on the Bloomberg service (or any
successor service) on page ALLX COF (or any other page as may replace the specified page on that
service) (Bloomberg Page ALLX COF), as of 11:00 A.M., San Francisco time, on such Eleventh
District Cost of Funds Rate Interest Determination Date, or
(2) if the rate referred to in clause (1) does not so appear on Reuters Page COFI/ARMS or
Bloomberg Page ALLX COF, as the case may be, the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District that was most recently
announced (the Index) by the FHLB of San Francisco as such cost of funds for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest Determination Date, or
(3) if the FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month immediately
preceding such Eleventh District Cost of Funds Rate Interest Determination Date, the Eleventh
District Cost of Funds Rate in effect on such Eleventh District Cost of Funds Rate Interest
Determination Date.
16
Federal Funds Rate
. If an Interest Rate Basis for this Note is specified on the face
hereof as the Federal Funds Rate, the Federal Funds Rate shall be determined as of the applicable
Interest Determination Date (a Federal Funds Rate Interest Determination Date) in accordance with
the following provisions:
(1) if Federal Funds (Effective) Rate is specified on the face hereof: (a) Federal Funds
Rate Interest Determination Date for United States dollar federal funds as published in H.15(519)
opposite the caption Federal funds (effective), as such rate is displayed on Reuters on page
FEDFUNDS1 (or any other page as may replace such page on such service) (Reuters Page REDFUNDS1)
under the heading EFFECT, or, (b) if the rate referred to in clause (a) is not so published by
3:00 P.M., New York City time, on the related Calculation Date, the rate with respect to such
Federal Funds Rate Interest Determination Date for United States dollar federal funds as published
in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying
such rate, under the caption Federal funds (effective), or, (c) if the rate referred to in clause
(b) does not appear on Reuters Page FEDFUNDS1 or is not yet published in H.15(519), H.15 Daily
Update or another recognized electronic source by 3:00 P.M., New York City time, on the related
Calculation Date, then the Federal Funds Rate with respect to such Federal Funds Rate Interest
Determination Date shall be calculated by the Calculation Agent and will be the arithmetic mean of
the rates for the last transaction in overnight United States dollar federal funds arranged by
three leading brokers of U.S. dollar federal funds transactions in The City of New York (which may
include the Agents or their affiliates) selected by the Calculation Agent, prior to 9:00 A.M., New
York City time, on the Business Day following such Federal Funds Rate Interest Determination Date;
provided, however,
that if the brokers so selected by the Calculation Agent are not quoting as
mentioned in this clause (c), the Federal Funds Rate determined as of such Federal Funds Rate
Interest Determination Date will be the Federal Funds Rate in effect on such Federal Funds Rate
Interest Determination Date, or,
(2) if Federal Funds Open Rate is specified on the face hereof: (a) the rate on such
Federal Funds Rate Interest Determination Date under the heading Federal Funds for the relevant
Index Maturity and opposite the caption Open as such rate is displayed on Reuters on page 5 (or
any other page as may replace such page on such service) (Reuters Page 5), or, (b) if the rate
referred to in clause (a) does not appear on Reuters Page 5 by 3:00 P.M., New York City time, on
the Calculation Date, the Federal Funds Rate for the Federal Funds Rate Interest Determination Date
will be the rate for that day displayed on FFPREBON Index page on Bloomberg L.P. (Bloomberg),
which is the Fed Funds Opening Rate as reported by Prebon Yamane (or a successor) on Bloomberg, or,
(c) if the rate referred to in clause (b) does not appear on Reuters Page 5 or is not displayed on
FFPREBON Index page on Bloomberg or another recognized electronic source by 3:00 P.M., New York
City time, on the related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate
Interest Determination Date shall be calculated by the Calculation Agent and will be the arithmetic
mean of the rates for the last transaction in overnight United States dollar federal funds arranged
by three leading brokers of United States dollar federal funds transactions in The City of New York
(which may include the Agents or their affiliates) selected by the Calculation Agent prior to 9:00
A.M., New York City time, on such Federal Funds Rate Interest Determination Date;
provided,
however,
that if the brokers so selected by the Calculation Agent are not quoting as
17
mentioned in
this clause (c), the Federal Funds Rate determined as of such Federal Funds Rate Interest
Determination Date will be the Federal Funds Rate in effect on such Federal Funds Rate Interest
Determination Date, or,
(3) if Federal Funds Target Rate is specified on the face hereof: (a) the rate on such
Federal Funds Rate Interest Determination Date as displayed on the FDTR Index page on Bloomberg,
or, (b) if the rate referred to in clause (a) does not appear on the FDTR Index page on Bloomberg
by 3:00 P.M., New York City time, on the Calculation Date, the Federal Funds Rate for such Federal
Funds Rate Interest Determination Date will be the rate for that day appearing on Reuters Page
USFFTARGET= (or any other page as may replace such page on such service) (Reuters Page
USFFTARGET=), or, (c) if the rate referred to in clause (b) does not appear on the FDTR Index page
on Bloomberg or is not displayed on Reuters Page USFFTARGET= by 3:00 P.M., New York City time, on
the related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate Interest
Determination Date shall be calculated by the Calculation Agent and will be the arithmetic mean of
the rates for the last transaction in overnight United States dollar federal funds arranged by
three leading brokers of United States dollar federal funds transaction in The City of New York
(which may include the Agents or their affiliates) selected by the Calculation Agent prior to 9:00
A.M., New York City time, on such Federal Funds Rate Interest Determination Date.
LIBOR
. If an Interest Rate Basis for this Note is specified on the face hereof as
LIBOR, LIBOR shall be determined by the Calculation Agent as of the applicable Interest
Determination Date (a LIBOR Interest Determination Date) as:
(1) the rate for deposits in the Designated LIBOR Currency having the Index Maturity specified
on the face hereof as such rate is displayed on Reuters on page LIBOR01 (or any other page as may
replace such page on such service for the purpose of displaying the London interbank rates of major
banks for the Designated LIBOR Currency) (Reuters Page LIBOR01) as of 11:00 A.M., London time, on
such LIBOR Interest Determination Date, or,
(2) with respect to a LIBOR Interest Determination Date on which no rate is displayed on
Reuters Page LIBOR01 as specified in clause (1) above, the Calculation Agent shall request the
principal London offices of each of four major reference banks (which may include affiliates of the
Agents) in the London interbank market, as selected by the Calculation Agent, to provide the
Calculation Agent with its offered quotation for deposits in the Designated LIBOR Currency for the
period of the Index Maturity specified on the face hereof, commencing on the related Interest Reset
Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on
such LIBOR Interest Determination Date and in a principal amount that is representative for a
single transaction in the Designated LIBOR Currency in such market at such time; if at least two
such quotations are so provided, then LIBOR on such LIBOR Interest Determination Date will be the
arithmetic mean calculated by the Calculation Agent of such quotations, or,
(3) if fewer than two quotations referred to in clause (2) are so provided, then LIBOR on such
LIBOR Interest Determination Date will be the arithmetic mean calculated by the Calculation Agent
of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center (as
defined above), on such LIBOR Interest Determination Date by three major
18
banks (which may include affiliates of the Agents) in such Principal Financial Center selected
by the Calculation Agent for loans in the Designated LIBOR Currency to leading European banks,
having the Index Maturity specified on the face hereof and in a principal amount that is
representative for a single transaction in the Designated LIBOR Currency in such market at such
time;
provided, however,
that if the banks so selected by the Calculation Agent are not quoting as
mentioned in this clause (3), LIBOR determined as of such LIBOR Interest Determination Date shall
be LIBOR in effect on such LIBOR Interest Determination Date.
Prime Rate
. If an Interest Rate Basis for this Note is specified on the face hereof
as the Prime Rate, the Prime Rate shall be determined as of the applicable Interest Determination
Date (a Prime Rate Interest Determination Date) as:
(1) the rate on such Prime Rate Interest Determination Date as published in H.15(519) under
the caption Bank Prime Loan, or
(2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the rate on such Prime Rate Interest Determination Date as
published in H.15 Daily Update, or such other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption Bank Prime Loan, or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the rate on such Prime Rate Interest Determination Date calculated
by the Calculation Agent as the arithmetic mean of the rates of interest publicly announced by each
bank that appears on Reuters on page USPRIME1 (or any other page as may replace such page on such
service for the purpose of displaying prime rates or base lending rates of major United States
banks) as such banks prime rate or base lending rate as of 11:00 A.M., New York City time, on such
Prime Rate Interest Determination Date, or
(4) if fewer than four rates referred to in clause (3) are so published by 3:00 P.M., New York
City time, on such Calculation Date, the rate on such Prime Rate Interest Determination Date
calculated by the Calculation Agent as the arithmetic mean of the prime rates or base lending rates
quoted on the basis of the actual number of days in the year divided by a 360-day year as of the
close of business on such Prime Rate Interest Determination Date by three major banks in The City
of New York selected by the Calculation Agent, or
(5) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause
(4), the Prime Rate in effect on such Prime Rate Interest Determination Date.
Treasury Rate
. If an Interest Rate Basis for this Note is specified on the face
hereof as the Treasury Rate, the Treasury Rate shall be determined as of the applicable Interest
Determination Date (a Treasury Rate Interest Determination Date) as:
(1) the rate from the auction held on such Treasury Rate Interest Determination Date (the
Auction) of direct obligations of the United States (Treasury Bills) having the Index Maturity
specified on the face hereof under the caption INVEST RATE on the display on Reuters (or any
successor service) on page USAUCTION10 (or any other page as may replace such page on such service)
(Reuters Page USAUCTION10) or page USAUCTION11 (or any other page as may replace such page on
such service) (Reuters Page USAUCTION11), or, if
19
not so displayed, on the Bloomberg service (or any successor service) on page AUCK 18 (or any
other page as may replace the specified page on that service (Bloomberg Page AUCK 18), or
(2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for
such Treasury Bills as published in H.15 Daily Update, or such other recognized electronic source
used for the purpose of displaying the applicable rate, under the caption U.S. Government
Securities/Treasury Bills/Auction High, or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the Bond Equivalent Yield of the auction rate of such Treasury
Bills as announced by the United States Department of the Treasury, or
(4) if the rate referred to in clause (3) is not so announced by the United States Department
of Treasury or if the Auction is not held, the Bond Equivalent Yield of the rate on such Treasury
Rate Interest Determination Date of such Treasury Bills as published in H.15(519) under the caption
U.S. Government Securities/Treasury Bills/Secondary Market, or
(5) if the rate referred to in clause (4) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the rate on such Treasury Rate Interest Determination Date of such
Treasury Bills as published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying the applicable rate, under the caption U.S. Government
Securities/Treasury Bills/Secondary Market, or
(6) if the rate referred to in clause (5) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the rate on such Treasury Rate Interest Determination Date
calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time, on such Treasury
Rate Interest Determination Date, of three primary United States government securities dealers
selected by the Calculation Agent for the issue of Treasury Bills with a remaining maturity closest
to the Index Maturity, or
(7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause
(6), the Treasury Rate in effect on such Treasury Rate Interest Determination Date.
Bond Equivalent Yield means a yield (expressed as a percentage) calculated in accordance
with the following formula:
|
|
|
|
|
|
|
|
|
Bond Equivalent Yield =
|
|
D
x
N
360 (D
x
M)
|
|
x
100
|
where D refers to the applicable per annum rate for Treasury Bills quoted on a bank discount
basis and expressed as a decimal, N to 365 or 366, as the case may be, and M refers to the
actual number of days in the applicable Interest Reset Period.
Notwithstanding the foregoing, the interest rate that may accrue hereon during any Interest
Reset Period shall not be greater than the Maximum Interest Rate, if any, or less than the
20
Minimum Interest Rate, if any, in each case as specified on the face hereof. The interest
rate on this Note will in no event be higher than the maximum rate permitted by New York law, as
the same may be modified by United States law of general application.
The Calculation Date, if applicable, pertaining to any Interest Determination Date shall be
the earlier of (i) the tenth calendar day after such Interest Determination Date or, if such day is
not a Business Day, the next succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or the Maturity Date, as the case may be. At the request of
the Holder hereof, the Calculation Agent will provide to the Holder hereof the interest rate hereon
then in effect and, if determined, the interest rate that will become effective as a result of a
determination made for the next succeeding Interest Reset Date.
Accrued interest hereon shall be an amount calculated by multiplying the principal amount
hereof by an accrued interest factor. Such accrued interest factor shall be computed by adding the
interest factor calculated for each day in the applicable Interest Period. Unless otherwise
specified as the Day Count Convention on the face hereof, the interest factor for each such date
shall be computed by dividing the interest rate applicable to such day by 360 if the CD Rate, the
Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR or
the Prime Rate is an applicable Interest Rate Basis or by the actual number of days in the year if
the CMT Rate or the Treasury Rate is an applicable Interest Rate Basis. Unless otherwise specified
as the Day Count Convention on the face hereof, the interest factor for this Note, if the interest
rate is calculated with reference to two or more Interest Rate Bases, shall be calculated in each
period in the same manner as if only the Applicable Interest Rate Basis specified on the face
hereof applied.
All percentages resulting from any calculation on this Note shall be rounded to the nearest
one hundred-thousandth of a percentage point, with five one-millionths of a percentage point
rounded upwards, and all amounts used in or resulting from such calculation on this Note shall be
rounded, in the case of United States dollars, to the nearest cent or, in the case of a Specified
Currency other than United States dollars, to the nearest unit (with one-half cent or unit being
rounded upwards).
The covenant set forth in Section 1004(a) of the Indenture shall not apply to this Note, and
the following covenant shall instead apply to this Note in place of the covenant set forth in
Section 1004(a) of the Indenture:
The Trust will not, and will not permit any Subsidiary to, incur any Debt if,
immediately after giving effect to the incurrence of such additional Debt and the
application of the proceeds thereof, the aggregate principal amount of all
outstanding Debt of the Trust and its Subsidiaries on a consolidated basis
determined in accordance with GAAP is greater than 65% of the sum of (without
duplication) (i) the Trusts Total Assets as of the end of the calendar quarter
covered in the Trusts Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
as the case may be, most recently filed with the Commission (or, if such filing is
not permitted under the Exchange Act, with the Trustee) prior to the incurrence of
such additional Debt and (ii) the purchase price of any real estate assets or
mortgages receivable acquired, and the amount of any securities offering proceeds
received (to the extent such proceeds were not used to acquire real estate
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assets or mortgages receivable or used to reduce Debt), by the Trust or any
Subsidiary since the end of such calendar quarter, including those proceeds obtained
in connection with the incurrence of such additional Debt.
In addition to the covenants set forth in the Indenture, the Company is required to maintain
Total Unencumbered Assets (as defined below) of not less than 150% of the aggregate outstanding
principal amount of the Companys Unsecured Debt (as defined below). For purposes of this
requirement, the following capitalized terms shall be defined as follows:
Total Unencumbered Assets means the sum of (i) those Undepreciated Real Estate Assets (as
defined below) not subject to an encumbrance and (ii) all other assets of the Company and its
Subsidiaries (as defined below) not subject to encumbrance determined in accordance with generally
accepted accounting principles (but excluding accounts receivable and intangibles).
Subsidiaries means a corporation, a limited liability company or a partnership a majority of
the outstanding voting stock, limited liability company or partnership interests, as the case may
be, of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries
of the Company. For purposes of this definition, voting stock means stock having voting power
for the election of directors, managing members or trustees, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
Undepreciated Real Estate Assets as of any date means the original cost plus capital
improvements of real estate assets of the Company and its Subsidiaries determined in accordance
with generally accepted accounting principles.
Unsecured Debt means debt of the Company or any Subsidiary which is not secured by any
mortgage, lien, charge, pledge or security interest of any kind upon any of their properties.
If an Event of Default shall occur and be continuing, the principal of the Notes may, and in
certain cases shall, be accelerated in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance of (i) the entire indebtedness of the Notes
or (ii) certain covenants and Events of Default with respect to the Notes, in each case upon
compliance with certain conditions set forth therein, which provisions apply to the Notes.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Debt Securities at any time by the Company and the Trustee with the consent of the Holders of a
majority of the aggregate principal amount of all Debt Securities at the time outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders of a majority of
the aggregate principal amount of the outstanding Debt Securities of any series, on behalf of the
Holders of all such Debt Securities, to waive compliance by the Company with certain provisions of
the Indenture. Furthermore, provisions in the Indenture permit the Holders of a majority of the
aggregate principal amount of the outstanding Debt Securities of any series, in certain instances,
to waive, on behalf of all of the Holders of Debt Securities of such series,
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certain past defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Note shall be conclusive and binding upon such holder and upon all future
Holders of this Note and other Notes issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this
Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay
principal, premium, if any, and interest in respect of this Note at the times, places and rate or
formula, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein [and
herein]
8
set forth, the transfer of this Note is registrable in the Security Register of
the Company upon surrender of this Note for registration of transfer at the office or agency of the
Company in any place where the principal hereof and any premium or interest hereon are payable,
duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes having the same terms and provisions, of
Authorized Denominations and for the same aggregate principal amount, will be issued by the Company
to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein [and
herein]
9
set forth, this Note is exchangeable for a like aggregate principal amount of
Notes of different Authorized Denominations but otherwise having the same terms and provisions, as
requested by the Holder hereof surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Holder as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary, except as required by law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE COMMONWEALTH OF VIRGINIA.
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This text applies to global Notes only.
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This text applies to global Notes only.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Note, shall be
construed as though they were written out in full according to applicable laws or regulations:
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TEN COM
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as tenants in common
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UNIF GIFT MIN ACT
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Custodian
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TEN ENT
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as tenants by the entireties
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(Cust)
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(Minor)
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as joint tenants with right of survivorship and not as tenants in common
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under Uniform Gifts to Minors Act
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(State)
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Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
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PLEASE INSERT SOCIAL SECURITY OR
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OTHER
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IDENTIFYING NUMBER OF ASSIGNEE
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(Please print or typewrite name and address including postal zip code of assignee)
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this Note and all rights thereunder hereby irrevocably constituting and appointing
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Attorney
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to transfer this Note on the books of the Company, with full power of substitution in the premises.
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Dated:
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Notice: The signature(s) on this
Assignment must correspond with the
name(s) as written upon the face of
this Note in every particular, without
alteration or enlargement or any
change whatsoever.
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[OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company to repay this Note
(or portion hereof specified below) pursuant to its terms at a price equal to 100% of the principal
amount to be repaid, together with unpaid interest accrued hereon to the Repayment Date, to the
undersigned, at
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate trust office in the
Borough of Manhattan, The City of New York, currently located at 40 Broad Street, 5
th
Floor, New York, New York 10004, not more than 60 nor less than 30 calendar days prior to the
Repayment Date, this Note with this Option to Elect Repayment form duly completed.
If less than the entire principal amount of this Note is to be repaid, specify the portion
hereof (which shall be increments of U.S.$1,000 (or other integral multiple of an Authorized
Denomination) (provided that any remaining principal amount shall be at least U.S.$1,000 or the
minimum Authorized Denomination) which the Holder elects to have repaid and specify the
denomination or denominations (which shall be U.S.$1,000 or the minimum Authorized Denomination) of
the Notes to be issued to the Holder for the portion of this Note not being repaid (in the absence
of any such specification, one such Note will be issued for the portion not being repaid).
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Name:
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Capacity:
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Address:
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Telephone No.:
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Tax Identification
or Social Security No.:
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Principal Amount
to be Repaid: $
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Date:
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Notice: The signature(s) on
this Option to Elect Repayment must correspond with the name(s) as
written upon the face of this Note in
every particular, without alteration
or enlargement or any change
whatsoever.]
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Medallion Signature Guarantee
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This form applies to certificated Notes only.
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Principal Amount
to be Repaid: $
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Date:
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Notice: The signature(s) on
this Option to Elect Repayment
must correspond with the name(s) as
written upon the face of this Note in
every particular, without alteration
or enlargement or any change
whatsoever.]
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Medallion Signature Guarantee
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This form applies to certificated Notes only.
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