Underwriting Agreement, dated June 21, 2021, among the Company, the Underwriters, the Forward Sellers and the Forward Purchasers
Exhibit 1.1
UDR, INC.
6,100,000 Shares
Common Stock
($0.01 par value)
Underwriting Agreement
June 21, 2021
BofA Securities, Inc.
One Bryant Park
New York, New York 10036
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
c/oBofA Securities, Inc.
c/oCitigroup Global Markets Inc.
Ladies and Gentlemen:
UDR, Inc., a corporation organized under the laws of Maryland (the “Company,” which term, as used herein, includes its predecessor United Dominion Realty Trust, Inc., a Virginia corporation (the “Predecessor”)), and each of BofA Securities, Inc. and Citigroup Global Markets Inc in their capacities as sellers of Borrowed Securities (as defined below) (the “Forward Sellers”), at the Company’s request in connection with (i) the letter agreement dated the date hereof between the Company and BofA Securities, Inc.; and (ii) the letter agreement dated the date hereof between the Company and Citigroup Global Markets Inc.; (each such letter agreement, a “Forward Sale Agreement” and, together, the “Forward Sale Agreements”) and Bank of America, N.A. and Citibank, N.A. (in their capacities as counterparties under their respective Forward Sale Agreements, the “Forward Purchasers”) relating to the forward sale by the Company, subject to the Company’s right to elect Cash Settlement or Net Share Settlement (as such terms are defined in such Forward Sale Agreements), of a number of shares of common stock, par value $0.01 per share, of the Company (“Common Stock”) equal to the number of Borrowed Securities sold by each of the Forward Sellers pursuant to this Agreement, confirm their respective agreements with BofA Securities, Inc. and Citigroup Global Markets Inc. (collectively, the “Representatives”) and each of the several underwriters named in Schedule A attached hereto (together with the Representatives, collectively, the “Underwriters”) with respect to the sale by the Forward Sellers, (with respect to an aggregate of
6,100,000 shares (the “Borrowed Securities”) of Common Stock and the Company (with respect to any Company Top-Up Securities (as defined below)), severally and not jointly, to the Underwriters, and the purchase by the Underwriters, severally and not jointly, of such shares of Common Stock (the “Securities”). This underwriting agreement is herein referred to as the “Agreement.” As used herein, the term “subsidiary” means a corporation, real estate investment trust, partnership or limited liability company a majority of the outstanding voting stock or beneficial, partnership or membership interests, as the case may be, of which is owned or controlled, directly or indirectly, by the Company or by one or more other subsidiaries of the Company, including, without limitation, United Dominion Realty L.P., a Delaware limited partnership (the “UDR Operating Partnership”).
The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) an automatic shelf registration statement (file number 333-236846) on Form S-3, covering the registration of certain securities, including the Securities, under the Securities Act of 1933, as amended (the “1933 Act”), including the related preliminary prospectus, which registration statement became effective upon filing under Rule 462(e) (“Rule 462(e)”) of the rules and regulations of the Commission under the 1933 Act (the “1933 Act Regulations”). Such registration statement, at each time of effectiveness under the 1933 Act and the 1933 Act Regulations, including post-effective amendments thereto to such time, the exhibits and any schedules thereto at such time, the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at such time and the documents otherwise deemed to be a part thereof pursuant to Rule 430B of the 1933 Act Regulations (“Rule 430B”), excepting therefrom, for purposes of clarity, any free writing prospectus (as defined in Rule 405 of the 1933 Act Regulations (“Rule 405”), a “free writing prospectus”), is referred to herein as the “Registration Statement”; provided, however, that all references to the “Registration Statement” shall be deemed to include information contained in a prospectus supplement (whether in preliminary or final form) relating to the Securities that is deemed to be a part of such Registration Statement as of the time specified in Rule 430B, excepting therefrom, for purposes of clarity, any free writing prospectus. Any information relating to the offering of the Securities that was omitted from such Registration Statement at the time it originally became effective but that is deemed to be a part of and included in such registration statement pursuant to Rule 430B is referred to herein as the “Rule 430B Information.” Each prospectus and prospectus supplement used in connection with the offering of the Securities that omitted Rule 430B Information, including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, excepting therefrom, for purposes of clarity, any free writing prospectus, are collectively referred to herein as the “preliminary prospectus.” Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus supplement relating to the Securities in accordance with the provisions of Rule 430B and Rule 424(b) of the 1933 Act Regulations (“Rule 424(b)”). The final prospectus and the final prospectus supplement, in the form first furnished or made available to the Underwriters for use in connection with the offering of the Securities, including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at the time of the execution of this Agreement, excepting therefrom, for purposes of clarity, any free writing prospectus, are collectively referred to herein as the “Prospectus.” For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus or the
Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).
All references in this Agreement to financial statements (including notes) and schedules and other information which is “contained,” “included,” “disclosed” or “stated” (or other references of like import) in the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to include all such financial statements (including notes) and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus at the relevant time of effectiveness, issuance or execution of this Agreement, as the case may be, pursuant to the Securities Exchange Act of 1934, as amended (the “1934 Act”), and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to include the information which is incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be, after such time pursuant to the 1934 Act.
Any offer that is a written communication relating to the Securities made prior to the original 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) of the 1933 Act Regulations (“Rule 163(c)”)) has been filed with the Commission in accordance with the exemption provided by Rule 163 of the 1933 Act Regulations (“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.
At the respective times the Registration Statement and each amendment thereto became effective, at the date of this Agreement, at each “new effective date” within the meaning of Rule 430B(f)(2) and at the Closing Date, the Registration Statement and each amendment thereto complied, comply and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and did not, 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.
None of any preliminary prospectus, the Prospectus or any amendment or supplement, to any preliminary prospectus or the Prospectus, at the date of this Agreement, at the time such preliminary prospectus, the Prospectus or any such amendment or supplement to any preliminary prospectus or the Prospectus was, is or will be issued or at the Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits 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; provided, however, that this representation and warranty shall not apply to any statement or omission relating to any Underwriter made in reliance upon and in conformity with information furnished in writing to the Company by such Underwriter through you expressly for use in the Registration Statement, the Disclosure Package (as defined below) or the Prospectus, it being understood and agreed that the names of the Underwriters appearing in the table below the first paragraph under the heading “Underwriting” in the Prospectus constitutes the only information furnished in writing by or on behalf of the Underwriters for use in the Registration Statement, the Disclosure Package or the Prospectus. Each preliminary prospectus and the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 of the 1933 Act Regulations, complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectus delivered or made available to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
At the Applicable Time (as defined below), (i) the Statutory Prospectus (as defined below), (ii) any Issuer Free Writing Prospectus (as defined below) issued at or prior to the Applicable Time that is attached hereto as (or identified on) Schedule C and (iii) the information agreed to in writing by the Company and the Underwriters as set forth on Schedule B hereto as the information to be conveyed by the Underwriters to purchasers of Securities at the Applicable Time, all considered together (collectively, the “Disclosure Package”), did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. No Issuer Free Writing Prospectus exists other than those listed on Schedule C hereto.
As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 6:58 P.M. (New York City time) on June 21, 2021 or such other time as agreed by the Company and the Underwriters.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act (“Rule 433”), relating to the Securities that (i) is required to be filed with the Commission by the Company, (ii) is a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering thereof that does not reflect the final terms, in each case in the form filed or required to be filed
with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).
“Statutory Prospectus” as of any time means the prospectus relating to the Securities that is included in the Registration Statement immediately prior to such time, including the documents incorporated by reference therein immediately prior to such time and any preliminary prospectus relating to the Securities that is deemed to be a part of and included in the Registration Statement pursuant to Rule 430B immediately prior to such time.
The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement, the Prospectus or the Disclosure Package made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter expressly for use in the Registration Statement, the Prospectus or the Disclosure Package.
At the time of the original filing of 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 Securities and at the date of this Agreement, the Company was not and is not an Ineligible Issuer without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.
Any certificate signed by any officer or authorized signatory of the Company and delivered to the Underwriters, the Forward Purchasers, the Forward Sellers or their counsel in connection with the offering of the Securities shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter, Forward Purchaser and Forward Seller as of the date or dates indicated in such certificate.
Certificates for the Securities shall be in such denominations and registered in such names as the Underwriters may request in writing at least one full New York business day before the Closing Date. The certificates for the Securities will be made available for examination and packaging by the Underwriters in The City of New York not later than 9:00 A.M. (New York City time) on the New York business day prior to the Closing Date.
If any of the conditions specified in this Section 7 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Underwriters, the Forward Purchasers and the Forward Sellers and their counsel, this Agreement and all obligations of the Underwriters, the Forward Purchasers and the Forward Sellers hereunder may be cancelled at, or at any time prior
to, the Closing Date by the Underwriters, the Forward Purchasers and the Forward Sellers. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 7 shall be delivered at the office of Sidley Austin llp, counsel for the Underwriters, the Forward Purchasers and the Forward Sellers, at 787 Seventh Avenue, New York, New York 10019, on the Closing Date.
Notices to the Underwriters and Forward Sellers, shall be directed to:
BofA Securities, Inc., One Bryant Park, New York, New York 10036, attention of Syndicate Department (Fax: (646) 855-3073), with a copy to ECM Legal (Fax: (212) 230-8730); or Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013, attention of General Counsel (Fax: (646) 291-1469).
Notices to the Forward Purchasers shall be directed to:
Bank of America, N.A., One Bryant Park, New York, New York 10036, attention of Rohan Handa (email: ***@***); or Citibank, N.A., 390 Greenwich Street, 6th Floor, New York, New York 10013, attention of Equity Derivatives (email: ***@***).
With a copy to:
Sidley Austin llp, 787 Seventh Avenue, New York, New York 10019, Attention: Samir A. Gandhi, Fax no.: 212 ###-###-####.
Notices sent to the Company, shall be mailed, delivered or telefaxed to (720) ###-###-#### and confirmed to it at 1745 Shea Center Drive, Suite 200, Highlands Ranch, CO 80129, Attention: Warren L. Troupe.
For purposes of this Section 15, a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k). “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
“Environmental Laws” shall mean any and all federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements of any Governmental Authority regulating, relating to or imposing liability or standards of conduct concerning any Hazardous Substances, public health or environmental protection, together with any amendment or a re-authorization thereof or thereto.
“Governmental Authority” shall mean any federal, state, local or municipal governmental body, department, agency or subdivision responsible for the due administration and/or enforcement of any Environmental Law.
“Hazardous Substances” shall mean any pollutant, contaminant, hazardous material, hazardous waste, infectious medical waste, hazardous or toxic substance defined or regulated as such in or under any Environmental Law.
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the parties hereto.
Very truly yours,
UDR, INC.
By:/s/ Joseph D. Fisher
Name: Joseph D. Fisher
Title: Senior Vice President and Chief
Financial Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first above written.
BOFA SECURITIES INC.
By:/s/ Jeffrey Horowitz
Name: Jeffrey Horowitz
Title: Managing Director
CITIGROUP GLOBAL MARKETS INC.
By:/s/ Kase Lawal
Name: Kase Lawal
Title: Vice President
For themselves and as Representatives of the several Underwriters named in Schedule A hereto.
Accepted as of the date first above written.
BANK OF AMERICA, N.A.
Acting its capacity as Forward Purchaser, solely as the recipient and/or beneficiary of certain representations, warranties, covenants and indemnities as set forth in this Agreement
By:/s/ Jake Mendelsohn___________
Name: Jake Mendelsohn
Title: Managing Director
BOFA SECURITIES, INC.
Acting in its capacity as Forward Seller
By:/s/ Jeffrey Horowitz___________
Name: Jeffrey Horowitz
Title: Managing Director
Accepted as of the date first above written.
CITIBANK, N.A.
Acting its capacity as Forward Purchaser, solely as the recipient and/or beneficiary of certain representations, warranties, covenants and indemnities as set forth in this Agreement
By:/s/ James Heathcote______________
Name: James Heathcote
Title: Authorized Signatory
CITIGROUP GLOBAL MARKETS INC.
Acting in its capacity as Forward Seller
By:/s/ Kase Lawal__________________
Name: Kase Lawal
Title: Vice President
SCHEDULE A
Name of Underwriter | Number of |
3,050,000 | |
3,050,000 | |
Total | 6,100,000 |
Name of Forward Seller | Number of Borrowed Securities to be Sold |
BofA Securities, Inc. | 3,050,000 |
Citigroup Global Markets Inc. | 3,050,000 |
Total | 6,100,000 |
SCHEDULE B
Issuer: UDR, Inc.
Number of Securities: 6,100,000 shares of Common Stock
Price to public (per share): | With respect to each investor, the price paid by such investor. |
SCHEDULE C
List of Issuer Free Writing Prospectuses
UDR Prices Public Offering of
6,100,000 Shares of Common Stock
DENVER, CO., June 21, 2021 – UDR, Inc. (the “Company”) (NYSE: UDR), announced today that it has priced an underwritten public offering of 6,100,000 shares of common stock at a price of $49.38 per share, all of which are being offered in connection with the forward sale agreements described below and all of which will be sold to one institutional investor.
BofA Securities and Citigroup are acting as joint book-running managers for the offering.
The Company has entered into forward sale agreements with BofA Securities and Citigroup or their affiliates (the “forward purchasers”) with respect to 6,100,000 shares of its common stock. In connection with the forward sale agreements, the forward purchasers or their affiliates are expected to borrow and sell to the underwriters an aggregate of 6,100,000 shares of the common stock that will be delivered in this offering. Subject to its right to elect cash or net share settlement, which right is subject to certain conditions, the Company intends to deliver, upon physical settlement of such forward sale agreements on one or more dates specified by the Company occurring no later than June 20, 2022, an aggregate of 6,100,000 shares of its common stock to the forward purchasers in exchange for cash proceeds per share equal to the applicable forward sale price, which is the public offering price, less underwriting discounts and commissions, and is subject to certain adjustments as provided in the forward sale agreements.
The offering is expected to close on June 24, 2021, subject to customary closing conditions.
The Company will not initially receive any proceeds from the sale of shares of its common stock by the forward purchasers or their affiliates in the offering. The Company expects to use the net proceeds, if any, it receives upon the future settlement of the forward sale agreements for planned acquisitions or other investments, the Company’s existing development and Developer Capital Program pipeline, and working capital and general corporate purposes, which may include the repayment of outstanding indebtedness under
the Company’s commercial paper program, unsecured revolving credit facility and working capital credit facility, if any.
Selling common stock through the forward sale agreements enables the Company to set the price of such shares upon the pricing of the offering (subject to certain adjustments) while delaying the issuance of such shares and the receipt of the net proceeds by the Company until the expected funding requirements described above have occurred.
This offering is being conducted pursuant to the Company’s currently effective shelf registration statement, which was previously filed with the Securities and Exchange Commission (the “SEC”). This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Company’s securities, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
You may obtain copies of the prospectus supplement and prospectus relating to the offering, when available, without charge from the SEC at www.sec.gov. Alternatively, copies of these documents may be obtained by contacting (i) BofA Securities, Attention: Prospectus Department, NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte, NC ###-###-####, or by emailing ***@***; and (ii) Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: 1 ###-###-####, or by emailing ***@***.
Forward-Looking Statements
Certain statements made in this press release may constitute “forward-looking statements.” Words such as “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to known and unknown risks, uncertainties and other factors which may cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements, due to a number of factors which include, but are not limited to, the impact of the COVID-19 pandemic and measures intended to prevent its spread or address its effects, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning availability of capital and the stability of the capital markets, the impact of competition and competitive pricing, acquisitions, developments and redevelopments not achieving anticipated results, delays in completing developments, redevelopments and lease-ups on schedule, expectations on job growth, home affordability and demand/supply ratio for multifamily housing, expectations concerning development and redevelopment activities, expectations on occupancy levels and rental rates, expectations concerning joint ventures and partnerships with third parties, expectations that technology will help grow net operating income, expectations on annualized net operating income and other risk factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time,
including the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q. Actual results may differ materially from those described in the forward-looking statements. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in the Company's expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required under the U.S. securities laws.
About UDR, Inc.
UDR, Inc. (NYSE: UDR), an S&P 500 company, is a leading multifamily real estate investment trust with a demonstrated performance history of delivering superior and dependable returns by successfully managing, buying, selling, developing and redeveloping attractive real estate properties in targeted U.S. markets. As of March 31, 2021, UDR owned or had an ownership position in 52,617 apartment homes including 1,417 homes under development. For over 48 years, UDR has delivered long-term value to shareholders, the best standard of service to residents and the highest quality experience for associates.
Contact: UDR, Inc.
Trent Trujillo
***@***
720 ###-###-####
SCHEDULE D
List of Significant Subsidiaries
United Dominion Realty, L.P.
UDR Lighthouse DownREIT L.P.
UDR/MetLife Master Limited Partnership II
DCO Realty, Inc.