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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MARCH 12, 1997 (MARCH 5, 1997)
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JDN REALTY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 1-12844 58-1468053
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification
Incorporation) Number)
3340 PEACHTREE ROAD, N.E.
SUITE 1530
ATLANTA, GEORGIA 30326
(Address of Principal Executive Offices) (Zip Code)
(404) 262-3252
(Registrant's Telephone Number, including Area Code)
NOT APPLICABLE
(Former Name)
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ITEM 5. OTHER EVENTS.
On March 5, 1997, the Company entered into an underwriting
agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated and A.G.
Edwards & Sons, Inc. (collectively, the "Underwriters") relating to the sale by
the Company to the Underwriters of 2,400,000 shares of the Company's common
stock $.01 par value per share (the "Common Stock"), at a price of $29.00 per
share, which closed on March 11, 1997. The Company has granted the
Underwriters a 30-day option to purchase up to 360,000 additional shares of
Common Stock solely to cover over-allotments, if any. A registration statement
pertaining to these securities has been filed with the Securities and Exchange
Commission and was declared effective on May 11, 1995. A related registration
statement on Form S-3 pertaining to these securities was filed with the
Securities and Exchange Commission pursuant to Rule 462(b) on March 6, 1997.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1 Underwriting Agreement by and between the Company and
Merrill Lynch, Pierce, Fenner & Smith Incorporated and
A.G. Edwards & Sons, Inc.
5 Opinion of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company
8 Tax Opinion of Waller Lansden Dortch & Davis, A
Professional Limited Liability Company
23 Consent of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company (included in Exhibits 5 and 8)
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JDN REALTY CORPORATION
By: /s/ William J. Kerley
----------------------------------
William J. Kerley
Chief Financial Officer
Date: March 11, 1997
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1 Underwriting Agreement by and between the Company and
Merrill Lynch, Pierce, Fenner & Smith Incorporated
and A.G. Edwards & Sons, Inc.
5 Opinion of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company
8 Tax Opinion of Waller Lansden Dortch & Davis, A
Professional Limited Liability Company
23 Consent of Waller Lansden Dortch & Davis, A Professional
Limited Liability Company (included in Exhibits 5 and 8)
</TABLE>
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EXHIBIT 1
JDN REALTY CORPORATION
(a Maryland corporation)
2,400,000 Shares
Common Stock
UNDERWRITING AGREEMENT
March 5, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
A.G. Edwards & Sons, Inc.
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
JDN Realty Corporation, a Maryland corporation (the "Company"),
proposes to issue and sell an aggregate of 2,400,000 shares (the "Initial
Underwritten Securities") of its common stock, $.01 par value per share (the
"Common Stock"), to Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and A.G. Edwards & Sons, Inc. (collectively, the
"Underwriters"). The Company also proposes to sell to the Underwriters, upon
the terms and conditions set forth in Section 2 hereof, up to an additional
360,000 shares (the "Option Securities") of Common Stock. The Initial
Underwritten Securities and the Option Securities are hereinafter collectively
referred to as the "Underwritten Securities."
Prior to the purchase and the public offering of the Underwritten
Securities by the Underwriters, the Company and the Underwriters shall enter
into an agreement substantially in the form of Exhibit A hereto (the "Pricing
Agreement"). The Pricing Agreement may take the form of an exchange of any
standard form of written telecommunication between the Company and the
Underwriters and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Underwritten Securities will be governed
by
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this Agreement, as supplemented by the Pricing Agreement. From and after the
date of the execution and delivery of the Pricing Agreement, this Agreement
shall be deemed to incorporate the Pricing Agreement.
As used herein the term "Properties" refers to the properties listed on
Schedule II hereto which represent all of the real property in which the
following entities own an interest: the Company, JDN Development Company, Inc.
("JDN Development"), subsidiaries of the Company or JDN Development and joint
ventures (including limited liability companies) in which any of the Company,
JDN Development or any of their subsidiaries own an interest.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-91222) covering,
among other securities, the Underwritten Securities, 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 be required prior to the execution of
the Underwriting Agreement. Such registration statement (as so amended, if
applicable) has been declared effective by the Commission. Such registration
statement (as so amended, if applicable), is referred to herein as the
"Registration Statement"; and the final prospectus and the prospectus
supplement relating to the offering of the Underwritten Securities, in the form
furnished to the Underwriters by the Company for use in connection with the
offering of the Underwritten Securities, are collectively referred to herein as
the "Prospectus;" provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the Underwriting
Agreement; provided, further, that if the Company files a registration
statement with the Commission pursuant to Section 462(b) of the 1933 Act
Regulations (the "Rule 462 Registration Statement"), then, after such filing,
all references to "Registration Statement" shall be deemed to include the Rule
462 Registration Statement. A "preliminary prospectus" shall be deemed to
refer to any prospectus that omitted information to be included upon pricing in
a form of prospectus filed with the Commission pursuant to Rule 424(b) of the
1933 Act Regulations, that was used after such effectiveness and prior to the
execution and delivery of the Underwriting Agreement. For purposes of this
Underwriting Agreement, all references to the Registration Statement,
Prospectus, or preliminary prospectus or to 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 Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included" or
"stated" (or other references of like import) in the Registration Statement,
Prospectus or
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preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be; and all references in this Underwriting Agreement to
amendments or supplements to the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the case may
be.
SECTION 1. Representations and Warranties
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter, as of the date hereof, as of the
Closing Time (as defined below), and if applicable, as of each Date of Delivery
(as defined below) (in each case a "Representation Date") as follows:
(1) Compliance with Registration Requirements. The Company meets
the requirements for use of Form S-3 under the 1933 Act. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been 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.
At the respective times the Registration Statement and any
post-effective amendments thereto (including the filing of the Company's
most recent Annual Report on Form 10-K with the Commission (the "Annual
Report on Form 10-K")) became effective and at each Representation Date,
the Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 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. At the date of the Prospectus, at the Closing Time and at
each Date of Delivery, if any, the Prospectus and any amendments and
supplements thereto did not and will 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. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or the Prospectus.
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Each preliminary prospectus and 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, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with the offering of Underwritten Securities will, at the
time of such delivery, be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted or required by Regulation S-T.
(2) Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read together
with the other information in the Prospectus, at the date of the
Prospectus, at the Closing Time and at each Date of Delivery, if any, did
not and will not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(3) Independent Accountants. The accountants who audited the
financial statements and supporting schedules included in the Registration
Statement and the Prospectus are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(4) Financial Statements. The financial statements of the Company
included in the Registration Statement and the Prospectus, together
with the related schedules and notes, as well as those financial
statements, schedules and notes of any other entity included therein,
present fairly the financial position of the Company and its consolidated
subsidiaries, or such other entity, as the case may be, at the dates
indicated and the statement of income, statement of stockholders' equity
and cash flows of the Company and its consolidated subsidiaries, or such
other entity, as the case may be, for the periods specified. Such
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus. In
addition, any pro forma financial statements of the Company
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and its subsidiaries and the related notes thereto included in the
Registration Statement and the Prospectus comply in all material respects
with the applicable requirements of the Commission's rules and guidelines
with respect to pro forma financial statements, with the exception of
adjustment 6 in footnote 16 to the Company's financial statements for the
year ending and as of December 31, 1994 included in the Company's Form 10-K
for the year ending December 31, 1995, and the necessary pro forma
adjustments have been properly applied to the historical amounts in the
compilation of such information.
(5) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement
and the Prospectus, except as otherwise stated therein, (A) there has been
no material adverse change 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 (a "Material Adverse Effect"),
whether or not arising in the ordinary course of business, (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those arising in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise and (C) except for regular dividends on the
Company's common stock or preferred stock, in amounts per share that are
consistent with past practice or the applicable charter document or
supplement thereto, respectively, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(6) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Maryland and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under, or as contemplated under, this Underwriting Agreement
and the Pricing Agreement. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not result in
a Material Adverse Effect.
(7) Good Standing of Subsidiaries. All the Company's subsidiaries
and JDN Development are listed on Schedule III hereof (collectively,
the "Subsidiaries"). Each Subsidiary has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact
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business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
or be in good standing would not result in a Material Adverse Effect.
Except as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and is validly issued, fully paid and
non-assessable and is owned by the Company, directly or through
Subsidiaries (except in the case of JDN Development, the outstanding voting
common stock of which is owned 99% by J. Donald Nichols and 1% by the
Company, and the outstanding non-voting common stock of which is owned 100%
by the Company), free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. None of the outstanding shares of
capital stock of any Subsidiary was issued in violation of preemptive or
other similar rights of any securityholder of such Subsidiary.
(8) Qualification as a REIT. The Company is organized in
conformity with the requirements for qualification as a real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as
amended (the "Code"), and its method of operation enables it to meet the
requirements for taxation as a REIT under the Code for its taxable periods
beginning or otherwise including the period after the Closing Date.
(9) Authorization of this Underwriting Agreement and Pricing
Agreement. This Underwriting Agreement and Pricing Agreement have been
duly authorized, executed and delivered by the Company.
(10) Authorization of Common Stock. The Underwritten Securities
being sold have been duly authorized by the Company for issuance and sale
pursuant to this Underwriting Agreement and the Pricing Agreement. Such
Underwritten Securities, when issued and delivered by the Company pursuant
to this Underwriting Agreement and Pricing Agreement against payment of the
consideration therefor specified in the Pricing Agreement, will be validly
issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights of any securityholder of the Company.
No holder of such Underwritten Securities will be subject to personal
liability by reason of being such a holder.
(11) Description of the Underwritten Securities. The Underwritten
Securities being sold, as of the date of the Prospectus, will conform
in all material respects to the statements relating thereto contained in
the Prospectus and will be in substantially the form filed or incorporated
by reference, as the case may be, as an exhibit to the Registration
Statement.
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(12) Absence of Defaults and Conflicts. Neither the Company nor
any of its Subsidiaries is in violation of its charter or by-laws or
other organizational documents or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which or any of them may be bound, or to
which any of the property or assets of the Company or any subsidiary is
subject (collectively, "Agreements and Instruments") except for such
defaults that would not result in a Material Adverse Effect. The execution,
delivery and performance of this Underwriting Agreement, the Pricing
Agreement, and any other agreement or instrument entered into or issued or
to be entered into or issued by the Company in connection with the
transactions contemplated hereby or thereby or in the Registration
Statement and the Prospectus and the consummation of the transactions
contemplated herein and in the Registration Statement and the Prospectus
(including the issuance and sale of the Underwritten Securities and the use
of the proceeds from the sale of the Underwritten Securities as described
under the caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder and thereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any assets, properties or operations of the Company or any
Subsidiary pursuant to any Agreements and Instruments except for such
conflicts, breaches, defaults, events or liens, charges or encumbrances
that would not result in a Material Adverse Effect, nor will such action
result in any violation of the provisions of the charter or by-laws of the
Company or any of its Subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its Subsidiaries or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any Subsidiary.
(13) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any Subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
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(14) Absence of Proceedings. There is not pending or threatened
any action, suit, proceeding, inquiry or investigation before or brought by
any court or governmental agency or body, domestic or foreign, now pending,
or to the knowledge of the Company threatened, against or affecting the
Company or any Subsidiary thereof which is required to be disclosed in the
Registration Statement and the Prospectus (other than as stated therein),
or which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely
affect the consummation of the transactions contemplated under this
Underwriting Agreement, or the performance by the Company of its
obligations hereunder and thereunder. The aggregate of all pending legal
or governmental proceedings to which the Company or any Subsidiary thereof
is a party or of which any of their respective assets, properties or
operations is the subject which are not described in the Registration
Statement and the Prospectus, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(15) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and/or filed as
required.
(16) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations under this Underwriting Agreement or in connection with the
transactions contemplated under this Underwriting Agreement, except for the
registration of the Underwritten Securities under the 1933 Act, compliance
with the listing requirements of the New York Stock Exchange Act or under
state securities laws, all of which have been or will be effected in
accordance with this Agreement.
(17) Possession of Intellectual Property. The Company and its
Subsidiaries own or possess all adequate trademarks, service marks,
trade names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them, and
neither the Company nor any of its Subsidiaries has received any notice or
is otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or
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finding) or invalidity or inadequacy, singly or in the aggregate, would
result in a Material Adverse Effect.
(18) Possession of Licenses and Permits. The Company and its
Subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them. The Company and
its Subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect. All
of the Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not result in a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(19) LLC's. The Company owns 50% of the membership interests in
JEBCO/JDN LOGANVILLE CENTER L.L.C., and a membership interest representing
50% of the economic interest in River Hills, LLC; JDN Development owns 50%
of the membership interest in Metro Station Development Company, LLC; and
WHF, Inc., a wholly owned subsidiary of JDN Development, owns 60% of the
membership interests in Dogwood Drive, LLC, all of which limited liability
companies are Georgia limited liability companies (the "LLCs"); and each of
the LLCs possesses such certificates, authorizations or permits issued by
the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now being conducted by it, as described
in or incorporated by reference into the Prospectus, and none of the LLCs
has received any notice of proceedings relating to the modification of any
such certificate, authority or permit which singly or in the aggregate, if
the subject of an unfavorable ruling or decision would have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, assets, business affairs or business prospects of the Company and
the Subsidiaries taken as a whole; each of the LLCs has good and marketable
fee simple title to all of its real property and marketable title to any
improvements thereon and all other assets that are used or useful in the
operation of the LLC's business.
(20) Title to Property. The Company and its Subsidiaries have good
and marketable title to all of the properties and assets reflected in the
financial statements (or as described in or incorporated by reference into
the Registration Statement or Prospectus), in each case, free and clear of
all
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mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except (A) as otherwise stated in the Registration
Statement and the Prospectus or (B) those which do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries. Except as set forth in Schedule IV, no
person has an option or right of first refusal to purchase all or part of
any Property or any interest therein. All of the leases and subleases
material to the business of the Company and its Subsidiaries considered as
one enterprise, and under which the Company or any subsidiary holds
properties described in the Prospectus, are in full force and effect, and
neither the Company nor any of its Subsidiaries has received any notice of
any material claim of any sort that has been asserted by anyone adverse to
the rights of the Company or any of its Subsidiaries under any of the
leases or subleases mentioned above, or affecting or questioning the rights
of the Company or such Subsidiary of the continued possession of the leased
or subleased premises under any such lease or sublease.
(21) Leases. Each lease of real property by the Company as lessor
is the legal, valid and binding obligation of the lessee in accordance
with the terms of such lease (except for such leases as are not material to
the business of the Company and except that the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought and to the Federal Bankruptcy
Code). The rents with respect to the Properties which at present are or
remain due and unpaid for more than 30 days are not payable under leases
such that, were no further rental payments to be received by the Company
under such leases, there would result a Material Adverse Effect. The
Company has no reason to believe that any tenant which is responsible for
aggregate annual rental payments in excess of $250,000 under all of its
leases at the Properties is not financially capable of performing its
obligations thereunder or intends to terminate any of its leases prior to
expiration thereof. The Company occupies its leased properties under valid
and binding leases conforming in all material respects to any description
thereof set forth in or incorporated by reference into the Registration
Statement or Prospectus.
(22) Investment Company Act. The Company is not, and upon the
issuance and sale of the Underwritten Securities as herein contemplated
and the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(23) Environmental Laws. Except as disclosed in or incorporated by
reference in the Prospectus, the Company has no knowledge
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that any Property has ever been used for the disposal, release, handling,
treatment, or storage of any Hazardous Material in any quantity or form
that would reasonably necessitate any responses or corrective action,
including any such action under any Hazardous Material Law; the Company has
no knowledge that any Property has ever been used, and neither the Company
(including its predecessor, JDN Enterprises, Inc. ("Enterprises")) nor any
owner of a Property in which J. Donald Nichols had or has a direct or
indirect interest ("JDN Property") has used any JDN Property, in any manner
other than in full compliance with all Hazardous Material Laws; none of the
Company (including Enterprises), the owner of any JDN Property or, to the
Company's knowledge, any owner of any other Property has ever received
written or oral notice or other communication of pending or threatened
claims, actions, suits, proceedings or investigations related to any
Property regarding (i) the disposal or release of solid, liquid or gaseous
waste into the environment, (ii) the treatment, storage, disposal, release
or other handling of any Hazardous Material, (iii) the placement of
structures or materials into waters of the United States, (iv) the presence
of any Hazardous Material in any building or structure located on any
Property, (v) the presence of any Hazardous Material related to the
ownership, use, condition, or operation of any Property, or (vi) any
alleged violation of any Hazardous Material Law; other than knowledge of
(1) a remediation agreement (relating to a leaking underground storage
tank) entered into between the State of Georgia and the owner of the Stop
'n' Go site adjacent to the QuikTrip parcel located at the Company's
Lawrenceville Property, (2) a remediation agreement (relating to soil and
groundwater contamination) entered into between the state of North Carolina
and the owner of a tract adjoining the Company's Greenville, North Carolina
Property, (3) a limited Phase II environmental assessment recommendation
that impacted soils be remediated at the Greensboro, North Carolina
Property, and (4) a corrective action plan required by the State of Georgia
(relating to a release from underground storage tanks) of the owner of the
SAV-A-TON Gasoline Station site near the Company's Ft. Oglethorpe, Georgia
property, the Company has no knowledge that any soil or water in or
adjacent to any Property is contaminated by any Hazardous Material; to the
Company's knowledge, there are no underground tanks or any other
underground storage facilities located on any Property, and to the
Company's knowledge, except as disclosed in or incorporated by reference
into the Prospectus, there have never been such tanks or facilities on any
Property.
Except as disclosed in or incorporated by reference into the
Prospectus, the Company has no knowledge that any real property previously
owned by the Company (including Enterprises) or by any owner of the JDN
Properties (collectively, the "Previously Owned Properties") has ever been
used for the disposal, release, handling, treatment or storage of any
Hazardous Material in any quantity or form that would reasonably
necessitate any responses or corrective action, including any such action
under any Hazardous Material
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Law; the Company has no knowledge that any Previously Owned Property
has ever been used and neither the Company (including Enterprises) nor any
owner of a JDN Property has used any Previously Owned Property in any
manner other than in full compliance with all Hazardous Material Laws;
neither the Company (including Enterprises) nor the owner of any Previously
Owned Property has ever received written notice or oral notice or other
communication of pending or threatened claims, actions, suits, proceedings
or investigations relating to any Previously Owned Property regarding (i)
the disposal or release of solid, liquid or gaseous waste into the
environment, (ii) the treatment, storage, disposal, release or other
handling of any Hazardous Material, (iii) the placement of structures or
materials into water of the United States, (iv) the presence of any
Hazardous Material in any building or structure located on any Previously
Owned Property, (v) the presence of any Hazardous Material related to the
ownership, use, condition or operation of any Previously Owned Property or
(vi) any alleged violation of any Hazardous Material Law; to the Company's
knowledge, there were no underground tanks or any other underground storage
facilities located on any Previously Owned Property during the time period
prior to and including the period that any Previously Owned Property was
owned by the Company (or Enterprises) or any owner of a JDN Property.
As used herein, "Hazardous Material" shall include, without
limitation, any substance which is controlled, regulated or prohibited
under any Hazardous Material Law. "Hazardous Material Law" shall mean any
local, state and federal law relating to the environment and environmental
conditions, including, without limitation, the Resource Conservation and
Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), 42 U.S.C. Section 9601-9637, as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 6901, et seq., the Federal
Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Clean Air
Act, 42 U.S.C. Section 741, et seq., the Clean Water Act, 33 U.S.C. Section
7401, et seq., the Toxic Substances Control Act, 15 U.S.C. Section
2601-2629, and the Safe Drinking Water Act, 42 U.S.C. Section 300f-300j.
(24) Tax Compliance. The Company has filed all federal, state,
local and foreign income tax returns which have been required to be
filed (except in any case in which the failure to so file would not have a
Material Adverse Effect), and has paid all taxes required to be paid for any
other assessment, fine or penalty levied against it, to the extent that any
of the foregoing is due and payable, except, in all cases, for any such tax,
assessment, fine or penalty that is being contested in good faith. All past
due taxes with respect to the Properties have been paid, and the Company and
the Subsidiaries have no liability, and no tax lien or other charge exists
with
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<PAGE> 13
respect to any Property. All material tax liabilities have been adequately
provided for in the financial statements of the Company.
(b) Officers' Certificates. Any certificate signed by any officer of the
Company or any Subsidiary and delivered to any Underwriter or to counsel for
the Underwriters in connection with the offering of the Underwritten Securities
shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby on the date of such certificate
and, unless subsequently amended or supplemented, at each Representation Date
subsequent thereto.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING
(a) Underwritten Securities. The several commitments of the Underwriters
to purchase the Underwritten Securities pursuant to this Underwriting Agreement
shall be deemed to have been made on the basis of the representations and
warranties herein contained and shall be subject to the terms and conditions
herein set forth.
(b) Option Underwritten Securities. In addition, subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to the number of the
Option Securities set forth herein at a price per Option Underwritten Security
equal to the price per Initial Underwritten Security, less an amount equal to
any dividends or distributions declared by the Company and paid or payable on
the Initial Underwritten Securities but not payable on the Option Securities,
as set forth in the Pricing Agreement. Such option will expire 30 days after
the date hereof, and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Underwritten
Securities upon written notice by Merrill Lynch to the Company setting forth
the number of Option Securities as to which the several Underwriters are then
exercising the option and the time, date and place of payment and delivery for
such Option Securities. Any such time and date of payment and delivery (each,
a "Date of Delivery") shall be determined by Merrill Lynch, but shall not be
later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, unless otherwise agreed upon by Merrill
Lynch and the Company. If the option is exercised as to all or any portion of
the Option Securities, each of the Underwriters, severally and not jointly,
will purchase that proportion of the total number or aggregate principal
amount, as the case may be, of Option Securities then being purchased which the
number or aggregate principal amount, as the case may be, of Initial
Underwritten Securities each such Underwriter has severally agreed to purchase
as set forth herein bears to the total number of Initial Underwritten
Securities, subject to such adjustments as
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<PAGE> 14
Merrill Lynch in its discretion shall make to eliminate any sales or purchases
of a fractional number of Option Securities.
(c) Payment. Payment of the purchase price for, and delivery of the
Initial Underwritten Securities shall be made at the office of Hogan & Hartson
L.L.P., 555 Thirteenth Street, N.W., or at such other place as shall be agreed
upon by Merrill Lynch and the Company, at 10:00 A.M. (Eastern time) on the
third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any
given day) business day after the date hereof (unless postponed in accordance
with the provisions of Section 10 hereof), or such other time not later than
ten business days after such date as shall be agreed upon by Merrill Lynch and
the Company (such time and date of payment and delivery being herein called
"Closing Time"). In addition, in the event that the Underwriters have
exercised their option, if any, to purchase any or all of the Option
Securities, payment of the purchase price for, and delivery of such Option
Securities, shall be made at the above-mentioned offices of Hogan & Hartson
L.L.P., or at such other place as shall be agreed upon by Merrill Lynch and the
Company, on the relevant Date of Delivery as specified in the notice from
Merrill Lynch to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
Merrill Lynch for the respective accounts of the Underwriters of the
Underwritten Securities to be purchased by them. It is understood that each
Underwriter has authorized Merrill Lynch, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Underwritten
Securities which it has severally agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Underwritten
Securities to be purchased by any Underwriter whose check has not been received
by the Closing Time or the relevant Date of Delivery, as the case may be, but
such payment shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. The Underwritten Securities or
certificates for the Underwritten Securities, as applicable, shall be in such
denominations and registered in such names as Merrill Lynch may request in
writing at least one full business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be. The Underwritten Securities or
certificates for the Underwritten Securities, as applicable, will be made
available for examination and packaging by Merrill Lynch in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
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<PAGE> 15
SECTION 3. COVENANTS OF THE COMPANY
The Company covenants with each Underwriter participating in the
offering of Underwritten Securities, as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations,
if and as applicable, and will notify the Representative(s) immediately, and
confirm the notice in writing, of (i) the effectiveness of any post-effective
amendment to the Registration Statement or the filing of any supplement or
amendment to the Prospectus, (ii) the receipt of any comments from the
Commission, (iii) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Underwritten Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424 and will take such steps as it deems
necessary to ascertain promptly whether the prospectus transmitted for filing
under Rule 424 was received for filing by the Commission and, in the event that
it was not, it will promptly file the Prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriters notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b) of the 1933 Act Regulations), any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Underwriters with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Underwriters or counsel for the Underwriters
shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriters and counsel for the Underwriters, without
charge, signed 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 or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to Merrill Lynch, without charge, a conformed
copy of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of the
Registration Statement and each
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<PAGE> 16
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted or required by Regulation S-T.
(d) Delivery of Prospectuses. The Company will deliver to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter may reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus as such Underwriter may reasonably request.
If applicable, the Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted or required by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934
Act Regulations so as to permit the completion of the distribution of the
Underwritten Securities as contemplated in this Underwriting Agreement and in
the Registration Statement and the Prospectus. If at any time when the
Prospectus is required by the 1933 Act or the 1934 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to amend the Registration Statement in
order that the Registration Statement 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 or to amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the Prospectus
comply with such requirements, and the Company will furnish to the
Underwriters, without charge, such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Underwritten Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Underwriters may designate and to
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<PAGE> 17
maintain such qualifications in effect for a period of not less than one year
from the date of the Underwriting Agreement; 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 or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Underwritten
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the date of
the Underwriting Agreement.
(g) Earning Statement. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earning statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Underwritten Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect the listing
of the Underwritten Securities, prior to the Closing Time, on the New York
Stock Exchange.
(j) Restriction on Sale of Securities. Prior to the date which is 30 days
from the date hereof, the Company will not, without the prior written consent
of Merrill Lynch, directly or indirectly, issue, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of the any Common Stock, except as
contemplated in this Agreement and except that the Company may, without such
consent, grant options and issue shares of Common Stock in connection with (i)
existing employee benefit plans of the Company, (ii) the Company's Dividend
Reinvestment and Stock Purchase Plan and Employee Stock Purchase Plan, or (iii)
acquisition of interests in additional properties.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. PAYMENT OF EXPENSES
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Underwriting Agreement, including (i)
the preparation, printing and filing of the Registration Statement (including
financial
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statements and exhibits) as originally filed and of each amendment thereto,
(ii) the preparation, printing and delivery to the Underwriters of this
Underwriting Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale
and delivery of the Underwritten Securities, (iii) the preparation, issuance
and delivery of any certificates for the Underwritten Securities, as
applicable, to the Underwriters, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors or agents (including transfer
agents and registrars), and their respective counsel, (v) the qualification of
the Underwritten Securities under state securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation, printing and delivery of the Blue Sky
Survey, and any amendment thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, and the Prospectus and
any amendments or supplements thereto, (viii) the fees and expenses incurred
with respect to the listing of the Underwritten Securities, and (ix) the filing
fees incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review, if any, by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale
of the Underwritten Securities.
(b) Termination of Agreement. If the Underwriting Agreement is terminated
by Merrill Lynch in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS
The obligations of the Underwriters to purchase and pay for the
Underwritten Securities pursuant to the Underwriting Agreement are subject to
the accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective under
the 1933 Act and no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus
containing
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information relating to the description of the Underwritten Securities, the
specific method of distribution and similar matters shall have been filed with
the Commission in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as
applicable (or any required post-effective amendment providing such information
shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434
of the 1933 Act Regulations, a Term Sheet including the Rule 434 Information
shall have been filed with the Commission in accordance with Rule 424(b)(7).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriters
shall have received the favorable opinions, dated as of Closing Time, of Waller
Lansden Dortch & Davis, A Professional Limited Liability Company, Brown & Wood,
LLP and Glass, McCullough, Sherrill & Harrold, LLP, counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters, to the effect
set forth in Exhibit B hereto and to such further effect as counsel to the
Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Hogan & Hartson L.L.P., counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters,
with respect to the matters set forth in subparagraphs (iii) and (iv) of the
opinion attached as Exhibit B (excluding documents incorporated by reference),
and that this Agreement has been duly authorized, executed and delivered by the
Company, the Company was incorporated and is existing and in good standing
under the laws of the State of Maryland and that the Underwritten Securities
have been duly authorized and, when issued in accordance with the provisions of
this Agreement, will be validly issued, fully paid and non-assessable. In
rendering such opinion, Hogan & Hartson L.L.P. may rely as to all matters
governed other than by the laws of the District of Columbia and federal laws on
the opinions of counsel referred to in subsection (b) of this section. In
addition to the matters set forth above, such opinion shall also include a
statement to the effect that no facts have come to the attention of such
counsel which cause them to believe that the Registration Statement, at the
time the Company's Annual Report on Form 10-K for the year ended December 31,
1995 was filed with the Commission, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus
and any amendment or supplement thereto, as of its date and the Closing Time or
the Date of Delivery, as the case may be, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided that in making the foregoing
statement, such counsel need express no view as to the financial statements,
notes and supporting schedules and other financial and statistical information
and data included in or incorporated by reference into or omitted from the
Registration
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Statement, the Prospectus, or the Prospectus Supplement. With respect to such
statement, Hogan & Hartson L.L.P. may state that their belief is based upon the
procedures set forth therein, but is without independent check and
verification.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date of the Underwriting Agreement or since the respective dates as
of which information is given in the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
Merrill Lynch shall have received a certificate of the President or a Vice
President of the Company and of the chief financial officer or chief accounting
officer of the Company, dated as of Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) to the best of such officers'
knowledge, the representations and warranties in Section 1 are true and correct
with the same force and effect as though expressly made at and as of the
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied under this Agreement at
or prior to the Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or, to the knowledge of such officers,
threatened by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of the
Underwriting Agreement, the Underwriters shall have received from Ernst & Young
L.L.P. a letter dated such date, in form and substance satisfactory to the
Underwriters, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Underwriters shall
have received from Ernst & Young LLP a letter, dated as of Closing Time, to the
effect that they reaffirmed the statements made in the letter furnished
pursuant to subsection (e) of this Section 5, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Time.
(g) Approval of Listing. At Closing Time, the Underwritten Securities
shall have been approved for listing, subject only to official notice of
issuance, on the New York Stock Exchange.
(h) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
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(i) Lock-up Agreements. On the date of the Underwriting Agreement, the
Underwriters shall have received, in form and substance satisfactory to them,
lock-up agreements from each of the Company's executive officers and directors.
(j) Over-Allotment Option. If the Underwriters exercise their Option to
purchase all or any portion of the Option Underwritten Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company or any of its
subsidiaries hereunder shall be true and correct as of each Date of Delivery,
and, at the relevant Date of Delivery, the Underwriters shall have received:
(1) A certificate, dated such Date of Delivery, of the President or
a Vice President of the Company and the chief financial officer or chief
accounting officer of the Company, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof remains
true and correct as of such Date of Delivery.
(2) The favorable opinion of Waller Lansden Dortch & Davis, A
Professional Limited Liability Company, Brown & Wood, LLP and Glass,
McCullough, Sherrill & Harrold, LLP counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Underwritten Securities and otherwise to
the same effect as the Opinion required by Section 5(b) hereof.
(3) The favorable Opinion of Hogan & Hartson L.L.P., counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(4) A letter from Ernst & Young LLP., in form and substance
satisfactory to the Underwriters and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to
the Underwriters pursuant to Section 5(f) hereof, except that the
"specified date" on the letter furnished pursuant to this paragraph shall
be a date not more than three business days prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Underwritten Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or 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 the
Underwritten Securities as herein contemplated shall be satisfactory in form
and substance to the Underwriters and counsel for the Underwriters.
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(m) Termination of Underwriting Agreement. If any condition specified in
this Section 5 shall not have been fulfilled when and as required to be
fulfilled, the Underwriting Agreement (or, with respect to the Underwriters'
exercise of any applicable over-allotment option for the purchase of Option
Underwritten Securities on a Date of Delivery after the Closing Time, the
obligations of the Underwriters to purchase the Option Underwritten Securities
on such Date of Delivery) may be terminated by the Underwriters by notice to
the Company at any time at or prior to the Closing Time (or such Date of
Delivery, as applicable), and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 1, 6,7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. INDEMNIFICATION
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact included
in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(2) 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 any 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, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d)
below) any such settlement is effected with the written consent of the
Company; and
(3) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriters),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
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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 (1) or
(2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally 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
or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(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
6(a) above, counsel to the indemnified parties shall be selected by Merrill
Lynch, and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties 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
23
<PAGE> 24
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 6 or Section 7 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.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. CONTRIBUTION
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to the
rein, then each indemnifying party shall contribute to the aggregate amount of
such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, from the offering of the Underwritten
Securities pursuant to the Underwriting Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company, on the one hand,
and of the Underwriters, on the other hand, in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
24
<PAGE> 25
Underwritten Securities pursuant to the Underwriting Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of such Underwritten Securities (before deducting expenses) received
by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus.
The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
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 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
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 or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company. The Underwriters'
respective obligations to
25
<PAGE> 26
contribute pursuant to this Section 7 are several in proportion to the number
of Initial Underwritten Securities set forth opposite their respective names in
Schedule I, and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY
All representations, warranties and agreements contained in this
Underwriting 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 any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of and payment for the Underwritten Securities.
SECTION 9. TERMINATION
(a) Underwriting Agreement. The Underwriters may terminate this
Underwriting Agreement, by notice to the Company, at any time at or prior to
the Closing Time or any relevant Date of Delivery, if (i) there has been, since
the time of execution of such Underwriting Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its Subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) there has occurred any material adverse change in the financial markets in
the United States or any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Underwriters, impracticable to market the Underwritten Securities or to enforce
contracts for the sale of the Underwritten Securities, or (iii) trading in any
securities of the Company has been suspended or limited by the Commission or
the New York Stock Exchange or, if trading generally on the New York Stock
Exchange or the American Stock Exchange or in the Nasdaq National Market has
been suspended or limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices have been required, by either of said
exchanges or by such system or by order of the Commission, the NASD or any
other governmental authority, or (iv) a banking moratorium has been declared by
either Federal or New York authorities.
(b) Liabilities. If this Underwriting Agreement is terminated pursuant to
this Section 9, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
26
<PAGE> 27
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS
If one of the Underwriters shall fail at the Closing Time or the
relevant Date of Delivery, as the case may be, to purchase the Underwritten
Securities which it or they are obligated to purchase under this Agreement and
the Pricing Agreement (the "Defaulted Securities"), then Merrill Lynch shall
have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; if, however, Merrill Lynch
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities does not exceed 10% of the number or aggregate
principal amount, as the case may be, of Underwritten Securities to be
purchased on such date pursuant to such Underwriting Agreement, the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations under such Underwriting Agreement bear
to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities exceeds 10% of the number or aggregate principal
amount, as the case may be, of Underwritten Securities to be purchased on
such date pursuant to such Underwriting Agreement, such Underwriting
Agreement (or, with respect to the Underwriters' exercise of any applicable
over-allotment option for the purchase of Option Underwritten Securities on
a Date of Delivery after the Closing Time, the obligations of the
Underwriters to purchase, and the Company to sell, such Option Underwritten
Securities on such Date of Delivery) shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a
termination of the Underwriting Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and the Company with respect to the related Option Underwritten
Securities, as the case may be, either Merrill Lynch or the Company shall have
the right to postpone the Closing Time or the relevant Date of Delivery, as the
case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any
other documents or arrangements.
27
<PAGE> 28
SECTION 11. NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Underwriters shall be
directed to Merrill Lynch at World Financial Center, North Tower, New York, New
York 10281-1201 attention of: Tjarda Clagett, Director, with a copy to Hogan &
Hartson, L.L.P., 555 Thirteenth Street, N.W., Washington, D.C. 20004-1109,
Attention: J. Warren Gorrell, Jr., and notices to the Company shall be
directed to it at: JDN Realty Corporation, 3340 Peachtree Road, Suite 1530,
Atlanta, Georgia, Attention: J. Donald Nichols, with a copy to Waller Lansden
Dortch & Davis, A Professional Limited Liability Company, Nashville City
Center, 511 Union Street, Suite 2100, Nashville, TN 37219-1760, Attention: E.
Marlee Mitchell.
SECTION 12 PARTIES
This Underwriting Agreement shall each inure to the benefit of and be
binding upon the Company and the Underwriters and their respective successors.
Nothing expressed or mentioned in this Underwriting Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Underwriting Agreement or any provision
herein or therein contained. This Underwriting Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and thereto and their 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 Underwritten Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME
THIS UNDERWRITING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
28
<PAGE> 29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this Underwriting Agreement, along with all counterparts, will become
a binding agreement between the Underwriters and the Company in accordance with
its terms.
Very truly yours,
JDN Realty Corporation
By: /s/ William J. Kerley
-------------------------------------
Name: WILLIAM J. KERLEY
Title: CHIEF FINANCIAL OFFICER
<PAGE> 30
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
A.G. EDWARDS & SONS, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Tjarda Clagett
-------------------------------------
Authorized Signatory
<PAGE> 31
Exhibit A
JDN REALTY CORPORATION
(a Maryland corporation)
2,400,000 Shares
Common Stock
PRICING AGREEMENT
March 5, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
A.G. Edwards & Sons. Inc.
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 100281-1209
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated March 5, 1997 (the
"Underwriting Agreement"), relating to the purchase by the Underwriters named in
Schedule 1 thereto of the above shares of common stock (the "Underwritten
Securities) of JDN Realty Corporation (the "Company").
Pursuant to Section 2 of the Underwriting Agreement, the Company agrees
with each Underwriter as follows:
1. The public offering price per share of the Underwritten Securities
shall be $29.00.
2. The purchase price per share for the Underwritten Securities to be
paid by the Underwriters shall be $27.48, being an amount equal to the public
offering price set forth above less $1.52 a share.
A-1
<PAGE> 32
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this Pricing Agreement, along with all counterparts, will become a
binding agreement between the Underwriters and the Company in accordance with
its terms.
Very truly yours,
JDN Realty Corporation
By: /s/ William J. Kerley
--------------------------------------
Name: WILLIAM J. KERLEY
Title: CHIEF FINANCIAL OFFICER
A-2
<PAGE> 33
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
A.G. EDWARDS & SONS, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Tjarda Clagett
-------------------------------------
Authorized Signatory
A-3
<PAGE> 34
Exhibit B
FORM OF OPINION OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(b)
(a) Company's counsel shall deliver the following opinions:
(i) The Company has been duly incorporated and is existing as a
corporation in good standing under the laws of the State of Maryland,
with corporate power and authority to own, lease and operate its
properties, to conduct its business as described in or incorporated by
reference into the Registration Statement and to enter into and perform
its obligations under this Agreement; each of the Subsidiaries has been
duly incorporated and is existing as a corporation under the laws of the
jurisdiction of its incorporation, with corporate power and authority to
own, lease and operate its properties and conduct its business as
described in or incorporated by reference into the Registration
Statement. The Company and each Subsidiary are duly qualified to
transact business in all jurisdictions in which the failure to qualify
would have a material adverse effect on the condition, financial or
otherwise, or on the earnings, assets, business affairs or business
prospects of the Company and the Subsidiaries taken as a whole; and the
outstanding shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and non-assessable
and, except for JDN Development (the outstanding voting common stock of
which is owned 99% by J. Donald Nichols and 1% by the Company, and the
outstanding non-voting common stock of which is owned 100% by the
Company), are owned by the Company or a Subsidiary; and, to such
counsel's knowledge, the outstanding shares of capital stock of each of
the Subsidiaries are owned free and clear of all liens, encumbrances,
security interests, and claims and no options, warrants or other rights
to purchase, agreement or other obligations to issue or other rights to
convert any obligations into any shares of the capital stock of or
ownership interests in the Subsidiaries are outstanding.
(ii) The Company has authorized and outstanding capital stock as of
September 30, 1996 as incorporated by reference in the Prospectus from
the Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1996, filed with the Commission; the outstanding shares of
its Common Stock have been duly authorized and validly issued and are
fully paid and non-assessable; all of the Underwritten Securities conform
to the description thereof contained in the Prospectus; the shares of
Common Stock, including the Option Securities, if any, to be sold by the
Company pursuant to this Agreement have been duly authorized and will be
validly issued, fully paid and non-assessable when issued and paid for as
contemplated by this Agreement; and no preemptive rights of stockholders
exist with respect to
B-1
<PAGE> 35
any of the Underwritten Securities or the issue or sale thereof. Except
as described in or contemplated by the Prospectus, to the knowledge of
such counsel, there are no outstanding securities of the Company
convertible or exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and there are no
outstanding or authorized options, warrants or rights of any character
obligating the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into or evidencing the right to
purchase or subscribe for any shares of such stock; and except as
described in or contemplated by the Prospectus, to the knowledge of such
counsel, no holder of any securities of the Company or any other person
has the right, contractual or otherwise, which has not been satisfied or
effectively waived, to cause the Company to sell or otherwise issue to
them, or to permit them to underwrite the sale of, any of the
Underwritten Securities or the right to have any Common Stock or other
securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement, to
require registration under the Act of any shares of Common Stock or other
securities of the Company.
(iii) The Registration Statement has become effective under the Act
and, to the knowledge of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending or threatened under
the Act.
(iv) The Registration Statement, the Prospectus and each amendment
or supplement thereto and the Incorporated Documents comply as to form in
all material respects with the requirements of the Act (or the Exchange
Act, as applicable) and the applicable rules and regulations thereunder
(except that such counsel need express no opinion as to the financial
statements, notes and schedules thereto included or incorporated by
reference therein).
(v) The statements under the captions "Description of Capital
Stock" and "Description of Common Stock" in the Prospectus, insofar as
such statements constitute a summary of documents referred to therein or
matters of law, are accurate summaries and fairly and correctly present
in all material respects the information called for with respect to such
documents and matters.
(vi) Such counsel does not know of any contracts or documents
required to be filed as exhibits to or incorporated by reference in the
Registration Statement or described in the Registration Statement or the
Prospectus which are not so filed, incorporated by reference or described
as required, and such contracts and documents as are summarized in the
Registration Statement or the Prospectus are accurately summarized and
the
B-2
<PAGE> 36
summaries fairly and correctly present the information called for with
respect to such contracts and documents.
(vii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any Subsidiary
except as set forth in the Prospectus.
(viii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of,
or constitute a default under, the charter or by-laws of the Company, or
any agreement or instrument known to such counsel to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary may
be bound or any law, order, rule or regulation applicable to the Company
or any Subsidiary or affecting any of the Properties of any jurisdiction,
court or regulatory body or administrative agency or other governmental
body having jurisdiction.
(ix) This Agreement has been duly and validly authorized, executed
and delivered by the Company.
(x) With respect to each LLC, Company owns the percentage of the
membership interests specified in Section 1(a) hereof, and based on the
certificate for such limited liability company filed in the records of
the Secretary of State of Georgia, the limited liability company is a
validly formed and existing limited liability company in good standing
and, to such counsel's knowledge, the limited liability company has not
received any notice of proceedings relating to the revocation or
modification of such certificate, which, if the subject of an unfavorable
ruling or decision, would materially and adversely affect the condition,
financial or otherwise, or the earnings, assets, business affairs or
business prospects of the limited liability company.
(xi) No approval, consent, order, authorization, designation,
declaration or filing is necessary in connection with the execution and
delivery of this Agreement and the consummation of the transactions
herein contemplated (other than as may be required by the National
Association of Securities Dealers, Inc. or as required by state
securities and Blue Sky laws as to which such counsel need express no
opinion) except such as have been obtained or made.
(xii) Neither the Company nor any Subsidiary is, nor at the Closing
Date will be an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined under the 1940 Act, and
the rules and regulations of the Commission thereunder.
B-3
<PAGE> 37
(xiii) Based on certain customary assumptions and representations
(acceptable to counsel for the Underwriter in their reasonable
discretion) relating to applicable asset composition, source of income,
shareholder diversification distribution, recordkeeping tests and other
requirements of the Code necessary for the Company to qualify as a REIT,
the Company was organized and has operated in conformity with the
requirements for qualification and taxation as a REIT under Sections 856
through 860 of the Code for each of the taxable years ended December 31,
1994 and December 31, 1995; the Company's current organization and method
of operations will enable the Company to continue to qualify as a REIT
under the Code. The discussion in the Prospectus under the caption
"Federal Income Tax Considerations" fairly summarizes the federal income
tax considerations that are likely to be material to a holder of
Underwritten Securities and, to the extent that it constitutes matters of
law or legal conclusions, has been reviewed by such counsel, is correct
and presents fairly the information required to be disclosed therein.
(b) In addition to the matters set forth above, the opinions of
Waller Lansden Dortch & Davis and Glass, McCullough, Sherrill & Harrold
shall also include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that the
Registration Statement, as of the time the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 was filed with the
Commission, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus and any
amendment or supplement thereto, as of its date and the Closing Date or
the Option Closing Date, as the case may be, contained or contains any
untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that
such counsel need express no view as to financial statements, notes, and
supporting schedules and other financial and statistical information data
included in or incorporated by reference into or omitted from the
Registration Statement, the Prospectus, or the Prospectus Supplement.
With respect to such statement, Waller Lansden Dortch & Davis and Glass,
McCullough, Sherrill & Harrold may state that their belief is based upon
the procedures set forth therein, but is without independent check and
verification and that they are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus.
B-4
<PAGE> 38
SCHEDULE I
JDN REALTY CORPORATION
<TABLE>
<CAPTION>
Number of
Initial
Under-
written
Underwriter Securities
- ----------- ----------
<S> <C>
Merrill, Lynch, Pierce Fenner & Smith Incorporated................ 1,200,000
A.G. Edwards & Sons............................................... 1,200,000
---------
Total........... 2,400,000
=========
</TABLE>
<PAGE> 39
SCHEDULE II
"PROPERTIES"
I. 49 SHOPPING CENTER PROPERTIES OWNED AND OPERATING:
-------------------------------------------------
Owned by JDN Structured Finance 1, Inc.:
- ----------------------------------------
Property Location
-----------------
1. Opelika, AL Phase I (Phase II owned by JDN Realty Corporation)
2. Fort Walton, FL
3. Tallahassee, FL
4. Cartersville, GA (Felton's Crossing)
5. Fayetteville, GA
6. Lawrenceville, GA (Five Forks Village)
7. Griffin, GA
8. Lawrenceville, GA (Town Center)
9. Lilburn, GA
10. Riverdale, GA
11. Union City, GA
12. Hendersonville, NC
13. Rockingham, NC
14. Wallace, NC
15. Wilmington, NC
16. Charleston, SC
17. Chattanooga, TN
18. Farragut, TN
19. Memphis, TN
20. Lexington, VA
Owned by JDN Realty Corporation:
- --------------------------------
Property Location:
------------------
1. Gadsden, AL
2. Decatur, AL (Southland Plaza)
3. Canton, GA
4. Cartersville, GA (Bartow Marketplace)
5. Eastman, GA
6. Fort Oglethorpe, GA
7. Lafayette, GA
8. Lagrange, GA
9. Madison, GA
10. Newnan, GA
11. Stockbridge, GA
12. Woodstock, GA
13. Jackson, MS (The Junction Shopping Center)
<PAGE> 40
14. Greenville, NC
15. Cheraw, SC
16. Lake City, SC
17. Sumter, SC
18. Columbia, TN
19. Franklin, TN
20. Goodlettsville, TN
21. Murfreesboro, TN
22. Tullahoma, TN
23. Burlington, OH
24. Richmond, KY
25. Loganville, GA (owned 50% through JEBCO/JDN Loganville Center LLC)
(see IV below)
26. Asheville, NC (owned 50% through River Hills L.L.C.)
(see IV below)
OWNED BY JDN DEVELOPMENT COMPANY, INC.
- --------------------------------------
1. Canton, GA
2. Steubenville, OH
3. Conyers, GA (owned 60% through WHF, Inc. through Dogwood Drive, L.L.C.)
(see IV below)
II. 35 OUTPARCELS OWNED:
--------------------
Owned by JDN Realty Corporation:
- --------------------------------
Property Location:
------------------
1. Charleston, SC
2. Lexington, VA
3. Lexington, VA
4. Lexington, VA
5. Lexington, VA
6. Hickory, NC
7. Rockingham, NC
8. Rockingham, NC
9. Wallace, NC
10. Wilmington, NC
11. Wilmington, NC
12. Lawrenceville, GA (Town Center)
13. Lawrenceville, GA (Town Center)
14. Gadsden, AL
15. Eastman, GA
16. Eastman, GA
17. Eastman, GA
<PAGE> 41
18. Eastman, GA
19. Eastman, GA
20. Lafayette, GA
21. Lafayette, GA
22. Lafayette, GA
23. Lafayette, GA
24. Madison, GA
Owned by JDN Structured Finance 1, Inc.:
- ----------------------------------------
Property Location:
------------------
1. Fayetteville, GA
Owned by JDN Development Company:
- ---------------------------------
Property Location:
------------------
1. Lithonia, GA (Turner Hill)
2. Newnan, GA
3. Greenville, NC
4. Greenville, NC
5. Greenville, NC
6. Canton, GA
7. Canton, GA
8. Steubenville, OH
9. Loganville, GA (owned through JEBCO/JDN Loganville Outparcel LLC)
10. Loganville, GA (owned through JEBCO/JDN Loganville Outparcel LLC)
III. DEVELOPMENT PROJECTS:
---------------------
<TABLE>
<CAPTION>
PROPERTY LOCATION CURRENT OWNER
----------------- -------------
A. DEVELOPMENT PROJECTS:
---------------------
<S> <C> <C>
1. Cumming, GA JDN Development
2. Warner Robins, GA (a) JDN Development - Lowe's
(b) JDN Realty - Shops
3. Monaca, PA (a) JDN Development - Lowe's
(b) JDN Development - Shops
4. Winston-Salem, NC JDN Development
5. Greensboro, NC (a) JDN Realty - shopping center tract
(b) JDN Development - outparcel
</TABLE>
<PAGE> 42
<TABLE>
<S> <C> <C>
6. Marietta, GA JDN Development
7. Woodstock, GA JDN Realty
8. Peachtree City, GA JDN Realty
9. Cordele, GA JDN Development
</TABLE>
IV. OTHERS (DIRECT OR INDIRECT INVESTMENTS IN ENTITIES OWNING REAL ESTATE)
----------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPERTY LOCATION CURRENT OWNER
----------------- -------------
<S> <C> <C>
1. Loganville, GA (a) JEBCO/JDN Loganville Center LLC -
shopping center tract (JDN Realty owns 50%)
(b) JEBCO/JDN Loganville Outparcel LLC -
outparcels (JDN Development owns 50%)
2. Conyers, GA Dogwood Drive, L.L.C. (WHF, Inc. owns 60%)
3. Asheville, NC River Hills L.L.C. (JDN Realty holds 50% of
economic interest and 20% of governance
rights)
4. Opelika, AL Pepperell Corners, L.P. (JDN of Alabama
Realty Corporation owns a 10.84% LP and a
1.00% GP interest)
5. Jackson, MS Metro Station Development Company, LLC
(JDN Development owns 50%)
</TABLE>
<PAGE> 43
SCHEDULE III
(Section 1(a)(7))
SUBSIDIARIES OF JDN REALTY CORPORATION
<TABLE>
<CAPTION>
JDN Realty Corporation
Name of Subsidiary Capital Stock Ownership
- ------------------ -----------------------
<S> <C>
JDN Structured Finance 1, Inc. 100%
JDN of Pennsylvania Realty Corporation 100%
JDN Development Company, Inc.* 1% Voting, 100%
Non-Voting
</TABLE>
- --------------------
*JDN Development Company, Inc. has the following corporate subsidiaries:
<TABLE>
<CAPTION>
JDN Development Company, Inc.
Name of Subsidiary Capital Stock Ownership
------------------ -----------------------
<S> <C>
JDN of Alabama Realty Corporation 100%
WHF, Inc. 100%
JDN Beaver Valley Development Company, Inc. 100%
</TABLE>
<PAGE> 44
SCHEDULE IV
-----------
(Section 1(a)(20))
1. American Hospitality Corporation as tenant under the Ground Lease
Agreement, dated April, 1986, between Taco Bell Corp. and Cherokee
Investors, Ltd., as assigned and amended from time to time (the "Taco Bell
Lease") which has the right under the Taco Bell Lease to purchase the
property that is demised by the Taco Bell Lease (the "Demised Premises")
within the Property known as the Tullahoma Shopping Center for the
"mutually agreeable price" if the Demised Premises are "purchased by the
landlord."
2. The parties to the Operating Agreement for JEBCO/JDN LOGANVILLE CENTER
L.L.C.
3. The parties to the Operating Agreement for Dogwood Drive LLC.
4. The parties to the Operating Agreement for Metro Station Development
Company, LLC.
<PAGE> 1
EXHIBIT 5
[WALLER LANSDEN DORTCH & DAVIS LETTERHEAD]
March 11, 1997
JDN Realty Corporation
3340 Peachtree Road, N.E.
Suite 1530
Atlanta, Georgia 30326
Re: Registration Statement on Form S-3/ Prospectus Supplement
dated March 5, 1997 to the Prospectus dated May 11, 1995
Ladies and Gentlemen:
We are acting as your counsel in connection with the issuance and sale
of 2,400,000 shares of common stock, $.01 par value (the "Shares"), by JDN
Realty Corporation, a Maryland corporation (the "Company"), to Merrill Lynch,
Pierce, Fenner & Smith Incorporated and A.G. Edwards & Sons, Inc. (the
"Underwriters"), pursuant to a Registration Statement on Form S-3 (Registration
No. 33-91222) and a related Registration Statement on Form S-3 filed pursuant
to Rule 462 (collectively, the "Registration Statement"), including the
Prospectus dated May 11, 1995 contained therein (the "Prospectus") as
supplemented by the Prospectus Supplement dated March 5, 1997 (the "Prospectus
Supplement"), and an Underwriting Agreement between the Company and the
Underwriters dated March 5, 1997 (the "Underwriting Agreement").
As such counsel and in connection with the foregoing, we have examined
and relied upon such records, documents and other instruments as in our
judgment are necessary or appropriate in order to express the opinion
hereinafter set forth, and have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the conformity
to original documents of all documents submitted to us as certified or
photostatic copies.
Based upon and subject to the foregoing and such other matters as we
have deemed relevant, we are of the opinion that the Shares have been duly
authorized by all necessary corporate action and, when delivered and issued
upon payment therefor in the manner and on the terms described in the
Registration Statement, the Prospectus, the Prospectus
<PAGE> 2
[WALLER LANSDEN DORTCH & DAVIS LETTERHEAD]
JDN Realty Corporation
March 11, 1997
Page 2
Supplement and the Underwriting Agreement, will be validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and further consent to the reference to us under the
caption "Legal Matters" in the Prospectus and the Prospectus Supplement.
Very truly yours,
/s/ WALLER LANSDEN DORTCH & DAVIS, PLLC
------------------------------------------
WALLER LANSDEN DORTCH & DAVIS, PLLC
<PAGE> 1
EXHIBIT 8
[WALLER LANSDEN DORTCH & DAVIS LETTERHEAD]
March 11, 1997
JDN Realty Corporation
3340 Peachtree Road
Suite 1530
Atlanta, Georgia 30326
RE: JDN REALTY CORPORATION -- PROSPECTUS SUPPLEMENT
(TO THE PROSPECTUS DATED MAY 11, 1995)
Ladies and Gentlemen:
We have acted as special tax counsel to JDN Realty Corporation, a
Maryland corporation (the "Company"), in connection with the public offering of
up to 2,400,000 shares of common stock (the "Firm Shares") of the Company
together with up to an additional 360,000 shares of common stock subject to an
underwriter's over-allotment option (the "Option Shares"), as more fully
described in the Company's Prospectus Supplement dated March 5, 1997 (to the
Prospectus dated May 11, 1995), pursuant to a Registration Statement on Form
S-3 (File No. 33-91222) (the "Registration Statement"). The Firm Shares and
the Option Shares (to the extent the aforementioned option is exercised) are
hereinafter collectively called the "Shares." In connection with the public
offering, you have requested our opinion that the Company is qualified as a
real estate investment trust ("REIT") under Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code") for its taxable years
ending December 31, 1994, December 31, 1995, and December 31, 1996 and its
current method of organization and operation will enable it to continue to
qualify as a REIT. All capitalized terms in this opinion which are defined in
the Registration Statement or the Prospectus Supplement shall have the same
respective meanings as set forth in the Registration Statement or the
Prospectus Supplement pertaining to the offering.
In rendering our opinion, we have examined and relied upon the
following documents and other materials:
1. Schedules prepared or delivered by officials of the Company
setting forth:
(a) REIT taxable and gross income for the short taxable year
ended December 31, 1995 and for fiscal years ended December 31, 1995
and 1996, together with a
<PAGE> 2
[WALLER LANSDEN DORTCH & DAVIS LETTERHEAD]
JDN Realty Corporation
March 11, 1997
Page 2
schedule of actual dividends distributed and projected dividends to be
distributed in accordance with Code Section 858 and compliance with the
distribution requirements of Code Section 857(a);
(b) Compliance with the applicable REIT ratios or tests for the
fiscal years ended December 31, 1994, 1995, and 1996 and proposed
compliance with such tests for the fiscal year ending December 31, 1997,
including:
Income tests:
(1) 95% gross income test for the year;
(2) 75% gross income test for the year;
(3) 30% gross income test for the year; and
Asset tests:
(1) 75% asset test at the end of each quarter;
(2) 25% asset test at the end of each quarter;
(3) 10% asset test at the end of each quarter;
(4) 5% asset test at the end of each quarter.
2. The Company's certificate, dated as of March 11, 1997.
In addition, we have examined such additional records, documents,
certificates and other instruments and made such investigations of fact and law
as in our judgement are necessary or appropriate to enable us to render the
opinion expressed below.
In rendering our opinion, we have relied upon the following
representations of the Company.
To the extent that the representations of the Company are with respect
to matters set forth in the Code or Treasury Regulations, we have discussed
with the Company's officers the relevant provisions of the Code, the applicable
Treasury Regulations and published administrative interpretations thereof.
1. The common stock of the Company has been since the completion of
the initial public offering, and will continue to be beneficially owned by over
100 shareholders (persons), as defined for purposes of Section 856(a)(5) of
the Code; and five or fewer shareholders have not owned, directly or indirectly
under the rules of Section 544 as modified by Section 856(h) of the Code, at
any time since the completion of the initial public offering, over 50% in value
of the stock of the Company; and no shareholder will own, directly or
indirectly, over 8% in
<PAGE> 3
[WALLER LANSDEN DORTCH & DAVIS LETTERHEAD]
JDN Realty Corporation
March 11, 1997
Page 3
number of shares or value of the outstanding stock of the Company; provided,
however, that "Excluded Holders" may hold up to the "Excluded Holder Ownership
Limit," as such terms are defined in the Company's Articles of Incorporation.
2. The Company has at all times and will continue to comply with any
and all procedural requirements for REIT status set forth in Sections 856
through 860 of the Code and the regulations thereunder, including the timely
making of such elections and the obtaining and disclosing of such information
as is required on the federal tax return to be filed by the Company.
3. Additional properties acquired will constitute "real estate
assets" and any other investments made by the REIT will be made in a manner to
satisfy the asset tests of Section 856(c) of the Code.
4. The income from existing and additional leases entered into or
acquired and the income from other investments will not cause the Company to
fail to satisfy the income tests of Section 856(c) of the Code.
5. The Company will actually operate in accordance with its past and
proposed method of operation as described in its filings with the Securities
and Exchange Commission under the Securities Act of 1933 and the Securities
Exchange Act of 1934.
6. The Company had no undistributed "C" corporation earnings and
profits at December 31, 1994, December 31, 1995 or December 31, 1996.
7. The representations contained in the Company's certificate, dated
as of March 11, 1997, are accurate.
8. All partnerships in which the Company may have an ownership
interest will own only "real estate assets" and cash reserves. All activities
of those partnerships will consist of activities permitted to be undertaken by
a REIT and income, other than interest income on cash reserves, shall be "rents
from real property."
9. Each corporation in which the Company has acquired or acquires
an equity interest shall either be a "Qualified REIT Subsidiary" under Section
856(i) of the Code or the
<PAGE> 4
[WALLER LANSDEN DORTCH & DAVIS LETTERHEAD]
JDN Realty Corporation
March 11, 1997
Page 4
Company will not own over ten percent (10%) of the outstanding voting
securities of such corporation or other issuer and the securities owned of such
issuer will not be greater in value than five percent (5%) of the value of the
total assets of the Company.
On the basis of and in reliance of the foregoing, we wish to advise you
that under current law, including relevant statutes, regulations and judicial
and administrative precedent (which law is subject to change on a retroactive
basis), in our opinion:
(a) the Company was organized and has operated in conformity
with the requirements for qualification and taxation as a REIT under
the Code for its taxable years ended December 31, 1994, December 31,
1995, and December 31, 1996 and the Company's current organization
and method of operation will enable it to continue to meet the
requirements for qualification and taxation as a REIT under the Code;
and
(b) the discussion in the Prospectus under the heading
"Federal Income Tax Considerations" is correct in all material respects
and fairly summarizes the federal income tax considerations that are
likely to be material to a holder of Shares.
The Company's qualification and taxation as a REIT depend upon the
Company's ability to meet on a continuing basis, through actual annual
operating and other results, the various requirements under the Code and
described in the Prospectus with regard to, among other things, the sources of
its gross income, the composition of its assets, the level of its distributions
to stockholders, and the diversity of its stock ownership. Waller Lansden
Dortch & Davis, A Professional Limited Liability Company will not review the
Company's compliance with these requirements on a continuing basis.
Accordingly, no assurance can be given that the actual results of operations of
the Company and its subsidiaries, the sources of their income, the nature of
their assets, the level of the Company's distributions to stockholders and the
diversity of its stock ownership for any given taxable year will satisfy the
requirements under the Code for qualification and taxation as a REIT.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and further consent to the reference to us under the
caption "Legal Matters" in the Prospectus and the Prospectus Supplement and
under the caption "Federal Income Tax Considerations" in the Prospectus.
Very truly yours,
/s/ WALLER LANSDEN DORTCH & DAVIS
----------------------------------------
A Professional Limited Liability Company
