Document:

exv10w03

 

Exhibit
10.03

Description
of the Amendment to the Series A Out-Performance Program

     
The Series A Out-Performance Program of United Dominion Realty Trust, Inc. (the “Company”), was approved by the Company’s
stockholders at its 2001 Annual Meeting of Shareholders. The Series A Out-Performance Program was designed to provide
participants with the possibility of substantial returns on
their investment if the total return on the Company’s common stock
exceeded targeted levels, while putting the participants’
investment at risk if those levels were not exceeded. The
Series A Out-Performance Partnership Shares, referred to herein
as the “Series A OPPSs,” vested in June 2003.

     
The Series A Out-Performance Program, as approved by the
Company’s stockholders in 2001, permitted individuals to transfer
Series A OPPSs only to a family member or a family-owned
entity or in the event of death or disability. These
restrictions on transfer provide limited liquidity for
the holders of interests in the Series A Out-Performance
Program and they do not allow such holders to tender their Series A OPPSs as consideration for their investment in a
subsequent out-performance program. Participating in an out-performance program can involve a
significant upfront cash investment by a participant, which many
participants may not have and cannot fund out of existing assets
or without borrowing or without selling the participant’s
existing shares of the Company’s common stock. The Company believes that requiring
participants to pay cash upfront as the only means of
participating in an out-performance program has limited the
attractiveness and participation by some of the Company’s executives and
other key employees in subsequent out-performance programs.
At the Company’s Annual Meeting of Stockholders held on
May 3, 2005 (the “Meeting”), the Company’s stockholders
approved an amendment to the Series A Out-Performance Program that was designed to address this concern. The amendment to the Series
A Out-Performance Program, approved by the Company’s
stockholders at the Meeting, allows the participants to sell the Series A OPPSs to the
Company or to exchange the Series A OPPSs for interests in
subsequent out-performance programs, with the prior written
consent of the board of managers of UDR Out-Performance I,
LLC. The value of the interests in the Series A Out-Performance
Program that are exchanged for interests in a subsequent
out-performance program will be determined based on the fair
market value at the time as determined by an independent
valuation expert. UDR Out-Performance I, LLC is a limited liability company owned
by members of the Company’s senior management and other key employees
whose current board of managers is comprised of two of the
Company’s independent directors and two members of the
Company’s senior management. Amending the Series A Out-Performance Program to allow
participants to sell Series A OPPSs to the Company or
to exchange Series A OPPSs for interests in subsequent
out-performance programs will allow the Series A
participants to participate in subsequent out-performance
programs, such as the New Out-Performance Program that was also
approved by the Company’s stockholders at the Meeting, by tendering
the Series A OPPSs, instead of cash, as consideration for
their investment in the subsequent out-performance program.

     A
description of the Series A Out-Performance Program is attached as
Exhibit 10(xviii) to the Company’s Quarterly Report on Form 10-Q
for the quarter ended September 30, 2001 (Commission File No.
1-10524).<PAGE>
                 UNITED DOMINION REALTY TRUST, INC.                  EXHIBIT 4.3

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.

<Table>
<Caption>
REGISTERED                                CUSIP No.:                                PRINCIPAL AMOUNT:
No. FXR-7                                 91019PCP5                                 $50,000,000
-------------------------                 --------------------------------          ----------------------
<S>                                       <C>                                       <C>
                                       UNITED DOMINION REALTY TRUST, INC.

                                                 MEDIUM-TERM NOTE
                                                   (FIXED RATE)

ORIGINAL ISSUE DATE:                      INTEREST RATE:    5.25%                   STATED MATURITY DATE:
November 1, 2004                                                                    January 15, 2015

INTEREST PAYMENT DATE(S)                  [ ] CHECK IF DISCOUNT NOTE
[X] July 15 and January 15,
commencing                                       Issue Price: %
July 15, 2005 [ ] Other:

INITIAL REDEMPTION                        INITIAL REDEMPTION                        ANNUAL REDEMPTION
DATE:  See Addendum                       PERCENTAGE:    See Addendum               PERCENTAGE
                                                                                    REDUCTION:   See Addendum

OPTIONAL REPAYMENT
DATE(S):  See Addendum

SPECIFIED CURRENCY:                       AUTHORIZED DENOMINATION:                  EXCHANGE RATE
[X] United States dollars                 [X] $1,000 and integral                   AGENT:  N/A
[ ] Other:                                    multiples thereof
                                          [ ] Other:

ADDENDUM ATTACHED                         DEFAULT INTEREST RATE:  N/A               OTHER/ADDITIONAL PROVISIONS:  N/A
[X] Yes
[  ] No
</Table>

<PAGE>

         UNITED DOMINION REALTY TRUST, 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 CEDE &
Co., as nominee for The Depository Trust Company, or registered assigns, the
Principal Amount of FIFTY MILLION DOLLARS ($50,000,000), 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 instructions as contemplated on the
reverse hereof) at the office or 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, 5th 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

                                       2
<PAGE>

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,
instructions are 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,
South African rands and Swiss francs, the "Principal Financial Center" shall be
The City of New York, Sydney, Toronto, 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

                                       3
<PAGE>

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 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.

                                       4
<PAGE>

         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.

                                       5
<PAGE>

         IN WITNESS WHEREOF, United Dominion Realty Trust, Inc. has caused this
Note to be duly executed by one of its duly authorized officers.

                                UNITED DOMINION REALTY TRUST, INC.

                                By    /s/  Scott A. Shanaberger
                                  ------------------------------------
                                  Name:  Scott A. Shanaberger
                                  Title: Senior Vice President, Chief Accounting
                                         Officer and Assistant Secretary

ATTEST:

By    /s/ Mary Ellen Norwood
   -----------------------------------
   Name:  Mary Ellen Norwood
   Title: Vice President and Secretary

Dated: May 3, 2005

TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

This is one of the Debt Securities of the
series designated therein referred to in the
within-mentioned Indenture.

WACHOVIA BANK, NATIONAL ASSOCIATION,
as Trustee

By   /s/ Sarah A. McMahon                   Authentication Date: May 3, 2005
   ---------------------------------
         Authorized Signatory

                                       6
<PAGE>

                                [REVERSE OF NOTE]

                       UNITED DOMINION REALTY TRUST, INC.

                                MEDIUM-TERM NOTE
                                  (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 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 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

                                       7
<PAGE>

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 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 instructions to such effect forwarded by the
Holder hereof. 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.

         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 Company's
Unsecured Debt (as defined below). For purposes of this requirement, the
following capitalized terms shall be defined as follows:

                                       8
<PAGE>

         "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, 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.

                                       9
<PAGE>

         As provided in the Indenture and subject to certain limitations therein
and herein 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 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.

                                       10
<PAGE>

                                  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:

<Table>
<S>               <C>                                   <C>                          <C>
TEN COM           - as tenants in common                UNIF GIFT MIN ACT            - ________ Custodian ______(Cust)
TEN ENT           - as tenants by the entireties
                                                                                     (Minor)
JT TEN            - as joint tenants with right of                                   under Uniform Gifts to Minors Act
                    survivorship and not as tenants                                  ________________________________
                    in common                                                                                 (State)

     Additional abbreviations may also be used though not in the above list.
</Table>

                       ----------------------------------

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
          OTHER
IDENTIFYING NUMBER OF ASSIGNEE

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
(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.

Dated:
      -------------------           --------------------------------------------

      -------------------           --------------------------------------------
                                    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.

                                       11
<PAGE>

                       UNITED DOMINION REALTY TRUST, INC.

                          ADDENDUM TO MEDIUM-TERM NOTE
                                  (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)
..20%.

         "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.

<PAGE>

         "Quotation Agent" means the Reference Treasury Dealer selected by the
indenture trustee after consultation with the Company.

         "Reference Treasury Dealer" means any of J.P. Morgan Securities Inc.,
Goldman, Sachs & Co., 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.

                                       2

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