<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
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):
April 1, 1998 (March 25, 1998)
------------------------------
JDN REALTY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 1-12844 58-1468053
(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction of Identification
Incorporation) Number)
359 EAST PACES FERRY RD.
SUITE 400
ATLANTA, GEORGIA 30305
(Address of Principal Executive Offices) (Zip Code)
(404) 262-3252
(Registrant's Telephone Number, including Area Code)
NOT APPLICABLE
(Former Name)
================================================================================
<PAGE> 2
ITEM 5. OTHER EVENTS AND INFORMATION.
On March 31, 1998, JDN Realty Corporation (the "Company") completed the
issuance and sale (the "Offering") of $75,000,000 of its 6.918% MandatOry Par
Put Remarketed Securities(SM) ("MOPPRS(SM)") due March 31, 2013, pursuant to a
distribution agreement (the "Distribution Agreement") dated February 5, 1998, by
and between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
BT Alex. Brown Incorporated, Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc (collectively, the "Agents"), and a related terms Agreement (the
"Terms Agreement"), dated March 25, 1998, by and between the Company and the
Agents. The Company is filing this Current Report on Form 8-K to file with the
Securities and Exchange Commission certain exhibits that are to be incorporated
by reference into its Registration statement on Form S-3 (Registration No.
333-38611) with respect to the Offering.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1.1 Terms Agreement, dated March 25, 1998, by and between the Company
and Merrill Lynch, Pierce, Fenner & Smith Incorporated, BT Alex.
Brown Incorporated, Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc.
4.1 First Amendment to Second Supplemental Indenture, dated as of March
31, 1998, by the Company to First Union National Bank, as Trustee
4.2 Form of 6.918% MandatOry Par Put Remarketed Securities(SM)
("MOPPRS(SM)") due March 31, 2013 (included as Appendix I to
Exhibit 4.1)
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 Exhibit 8)
</TABLE>
Page 2 of 4
<PAGE> 3
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 31, 1998
Page 3 of 4
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1.1 Terms Agreement, dated March 25, 1998, by and between the Company
and Merrill Lynch, Pierce, Fenner & Smith Incorporated, BT Alex.
Brown Incorporated, Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc.
4.1 First Amendment to Second Supplemental Indenture, dated as of March
31, 1998, by the Company to First Union National Bank, as Trustee
4.2 Form of 6.918% MandatOry Par Put Remarketed Securities(SM)
("MOPPRS(SM)") due March 31, 2013 (included as Appendix I to
Exhibit 4.1)
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 Exhibit 8)
</TABLE>
Page 4 of 4
<PAGE> 1
EXHIBIT 1.1
JDN REALTY CORPORATION
(a Maryland corporation)
$75,000,000 6.918% MandatOry Par Put Remarketed Securities(SM) ("MOPPRS(SM)")
due March 31, 2013
TERMS AGREEMENT
March 25, 1998
JDN Realty Corporation
359 East Paces Ferry Road
Suite 400
Atlanta, Georgia 30305
Dear Sirs:
The undersigned underwriters (the "Underwriters") understand that JDN
Realty Corporation, a Maryland corporation (the "Company"), proposes to issue
and sell $75,000,000 aggregate principal amount of its 6.918% MandatOry Par Put
Remarketed Securities(SM) ("MOPPRS(SM)") due March 31, 2013 (the "Underwritten
Securities") which are part of the series of Medium-Term Notes Due Nine Months
or More From Date of Issue of the Company. Subject to the terms and conditions
set forth herein or incorporated by reference herein, the Underwriters offer to
purchase, severally and not jointly, the principal amount of Underwritten
Securities set forth below opposite their respective names at 102.13% of the
principal amount thereof together with accrued interest thereon, if any, from
March 31, 1998.
<TABLE>
<CAPTION>
Principal Amount
Underwriter of MOPPRS
----------- ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................... $45,750,000
BT Alex. Brown Incorporated.................................. 9,750,000
Morgan Stanley & Co. Incorporated............................ 9,750,000
Salomon Brothers Inc ........................................ 9,750,000
-----------
Total .......................................... $75,000,000
===========
</TABLE>
The Underwritten Securities shall have the following terms:
Principal Amount to be issued: $75,000,000
Form: Registered book-entry form
Interest Rate to Remarketing Date: 6.918%
- ----------
"MandatOry Par Put Remarketed Securities(SM)" and "MOPPRS(SM)" are service
marks owned by Merrill Lynch & Co., Inc.
<PAGE> 2
<TABLE>
<S> <C>
Current ratings: Baa3 by Moody's Investors Service, Inc.
BBB- by Standard & Poor's Ratings Services
BBB- by Duff & Phelps Credit Rating Co.
Interest payable: March 31 and September 30 of each year (each, an
"Interest Payment Date"), commencing on
September 30, 1998
Stated Maturity Date: March 31, 2013
Remarketing Date: March 31, 2003
Base Rate: 5.637%
Purchase Price: 102.13% ($76,597,500), plus accrued interest, if
any, from March 31, 1998
Initial price to public: At varying prices related to the prevailing market
prices at the time of the sale
Settlement Date, Time and Place: March 31, 1998, at 9:00 a.m. New York City time
at the offices of Hogan & Hartson, 555 13 Street,
N.W., Washington, DC 20004 for the delivery of
documents; delivery of funds on March 31, 1998
in accordance with DTC procedures for medium-term
notes
Redemption provisions: Subject to repurchase or redemption only upon the
terms set forth in the Underwritten Securities
Repayment provisions: None
Specified Currency: U.S. dollars
Authorized Denominations: $1,000 and integral multiples thereof
Additional/Other Terms: As set forth below
</TABLE>
All the provisions contained in the Distribution Agreement, dated
February 5, 1998 (the "Distribution Agreement"), among the Company and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, BT Alex.
Brown Incorporated, Morgan Stanley & Co. Incorporated and Salomon Brothers Inc,
attached hereto as Annex A, are hereby incorporated by reference in their
entirety herein and shall be deemed to be a part of this Terms Agreement to the
same extent as if such provisions had been set forth in full herein except as
modified herein. Terms defined in the Distribution Agreement are used herein as
therein defined.
2
<PAGE> 3
Notwithstanding Section 10(e) of the Distribution Agreement, the
Underwriters will pay the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the issuance and sale of the
Underwritten Securities.
The following documents will be required on the Settlement Date (as
defined above):
1. Officers' Certificate pursuant to Section 7(b) of the Distribution
Agreement;
2. Comfort letter pursuant to Section 7(d) of the Distribution
Agreement; and
3. Legal opinion of Company counsel pursuant to Section 7(c) of the
Distribution Agreement, modified to relate to the issuance of the Underwritten
Securities; provided, that such legal opinion shall be modified further to
include the following additional opinions:
"The Remarketing Agreement has been duly authorized, executed
and delivered by the Company and, assuming due authorization, execution
and delivery thereof by the Remarketing Dealer, constitutes a legal,
valid and binding agreement of the Company, enforceable in accordance
with its terms, except (A) as such enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other laws affecting creditors' rights generally, (B)
that the remedy of specific performance and injunctive and other forms
of equitable relief are subject to certain equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought, and (C) as such enforceability may be subject to limitations
on rights to indemnity or contribution or both by Federal or state
securities laws or the public policies underlying such laws."
"The Underwritten Securities have been duly and validly
authorized by all necessary actions and, when executed, authenticated
and delivered in accordance with the Indenture (as supplemented and
otherwise modified) against payment of the purchase price therefor as
provided in the Distribution Agreement and Terms Agreement, will be
entitled to the benefits of the Indenture (as supplemented and
otherwise modified) and will be valid and legally binding obligations
of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles."
"The Terms Agreement has been duly authorized, executed and
delivered by the Company and the Company has the power and authority to
perform its obligations thereunder."
Section 2 of the Distribution Agreement is hereby amended (i) by
deleting the words "statements of operations, shareholders' equity" appearing in
the fifth and sixth lines of Paragraph (vi) and inserting in lieu thereof the
words "results of operations" and (ii) by adding in the sixth line of Paragraph
(xxii) immediately after the word "paid" the words "except where failure to pay
would not result in a Material Adverse Effect".
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<PAGE> 4
Please accept this offer by signing a copy of this Terms Agreement in
the space set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BT ALEX. BROWN INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Scott Primrose
------------------------------
Authorized Signatory
For itself and as Representative of the other
Underwriters named herein
Accepted:
JDN REALTY CORPORATION
By: /s/ J. Donald Nichols
---------------------------
Name: J. Donald Nichols
Title: Chief Executive Officer
4
<PAGE> 1
EXHIBIT 4.1
JDN REALTY CORPORATION
AND
FIRST UNION NATIONAL BANK
as Trustee
---------------------
FIRST AMENDMENT TO SECOND SUPPLEMENTAL INDENTURE
Dated as of March 31, 1998
---------------------
Amending the Indenture
dated as of July 15, 1997
and the Second Supplemental Indenture
dated as of February 5, 1998
<PAGE> 2
FIRST AMENDMENT, dated as of the 31st day of March 1998, to the SECOND
SUPPLEMENTAL INDENTURE, dated as of the 5th day of February 1998, between JDN
REALTY CORPORATION, a corporation organized and existing under the laws of the
State of Maryland (the "Company"), and FIRST UNION NATIONAL BANK, a national
banking association organized under the laws of the United States of America,
having a Corporate Trust Office at 11th Floor, 999 Peachtree Street, N.E.,
Atlanta, Georgia 30309-9094, as trustee (the "Trustee");
WHEREAS, the Company and the Trustee have heretofore entered into an
Indenture, dated as of July 15, 1997 (the "Original Indenture"), as supplemented
by the Second Supplemental Indenture dated as of February 5, 1998 (the "Second
Supplemental Indenture"), providing for the issuance by the Company from time to
time of series of its senior debt securities designated the "Medium-Term Notes
Due Nine Months or More From Date of Issue" (in the Second Supplemental
Indenture and herein called the "Notes"); and
WHEREAS, the Company desires to amend Section 1.02 of the Second
Supplemental Indenture to establish an additional form of the Notes as Exhibit C
thereto, which form of the Notes provides for, inter alia, certain rights,
obligations and duties of the Trustee as set forth therein; and
WHEREAS, all things necessary to make this First Amendment to the
Second Supplemental Indenture a valid, binding and legal agreement of the
Company, have been done;
NOW, THEREFORE, THIS FIRST AMENDMENT TO THE SECOND SUPPLEMENTAL
INDENTURE WITNESSETH, for and in consideration of the premises and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed as follows:
Section 1. Amendment to Second Supplemental Indenture. The
parties hereto hereby agree as follows:
(a) Section 1.02 of the Second Supplemental Indenture is hereby amended
to insert the words "or Exhibit C" immediately following the words "Exhibit B"
appearing therein.
(b) The Second Supplemental Indenture is hereby amended to add an
Exhibit C thereto as set forth in Appendix I hereto.
(c) All references to the "Notes" in the Second Supplemental Indenture
shall include any Notes substantially in the form set forth in Appendix I
hereto, issued and established in accordance with the Original Indenture and the
Second Supplemental Indenture (as amended hereby).
1
<PAGE> 3
Section 2. Miscellaneous.
(a) Except as expressly amended hereby, the Original Indenture and the
Second Supplemental Indenture shall continue in full force and effect in
accordance with the provisions thereof and the Original Indenture and the Second
Supplemental Indenture are in all respects hereby ratified and confirmed. This
First Amendment to the Second Supplemental Indenture and all its provisions
shall be deemed a part of the Original Indenture, as supplemented by the Second
Supplemental Indenture, in the manner and to the extent herein and therein
provided.
(b) This First Amendment to the Second Supplemental Indenture shall be
effective as of the date first above written upon the execution and the delivery
hereof by each of the parties hereto.
(c) This First Amendment to the Second Supplemental Indenture shall be
governed by, and construed in accordance with, the laws of the State of New
York.
(d) This First Amendment to the Second Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
[Remainder of page intentionally left blank]
2
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to the Second Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all as of the day and year
first above written.
JDN REALTY CORPORATION
By: /s/ William J. Kerley
------------------------------
Name: William J. Kerley
Title: Chief Financial Officer
ATTEST:
By: /s/ John D. Harris, Jr.
-----------------------
(Corporate Seal)
FIRST UNION NATIONAL BANK,
as Trustee
By: /s/ Sabrina Fuller
-------------------------------
Name: Sabrina Fuller
Title: Assistant Vice President
ATTEST:
By: /s/ Theresa Davis
-----------------
(Corporate Seal)
<PAGE> 5
STATE OF GEORGIA )
) :
COUNTY OF FULTON )
On the 26th day of March 1998, before me personally came William
J. Kerley, to me known, who, being by me duly sworn, did depose and say that he
is CFO of JDN REALTY CORPORATION, one of the parties described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and he
signed his name thereto by like authority.
/s/ Patricia J. Kask
-------------------------------
Notary Public, State of Georgia
Commission expires: 4/1/2000
[Notarial Seal]
STATE OF GEORGIA )
) :
COUNTY OF GWINNETT )
On the 31st day of March 1998, before me personally came Sabrina Fuller,
to me known, who, being by me duly sworn, did depose and say that he is
Asst. Vice President of FIRST UNION NATIONAL BANK, one of the parties described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and he signed his name thereto by like authority.
/s/ Brian K. Justice
-------------------------------
Notary Public, State of Georgia
Commission expires: 9/11/2002
[Notarial Seal]
<PAGE> 6
APPENDIX I
EXHIBIT C TO SECOND SUPPLEMENTAL INDENTURE
EXHIBIT C
UNLESS THIS MOPPRS IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY MOPPRS ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR MOPPRS IN CERTIFICATED
FORM, THIS MOPPRS MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
REGISTERED REGISTERED PRINCIPAL
No. AMOUNT: $75,000,000
CUSIP No.:
JDN REALTY CORPORATION
MEDIUM-TERM NOTE
6.918% MandatOry Par Put Remarketed Securities(SM)
("MOPPRS(SM)") due March 31, 2013
ORIGINAL ISSUE DATE: INTEREST RATE STATED MATURITY DATE:
March 31, 1998 TO REMARKETING March 31, 2013
DATE: 6.918%
REMARKETING DATE: INTEREST RATE
March 31, 2003 TO MATURITY: To be determined as provided herein
and set forth in the records of the
Trustee
AUTHORIZED DENOMINATION: INTEREST PAYMENT DATE(S):
$1,000 and integral multiples thereof March 31 and September 30
- ----------
"MandatOry Par Put Remarketed Securities(SM)" and "MOPPRS(SM)" are service marks
owned by Merrill Lynch & Co., Inc.
<PAGE> 7
JDN REALTY CORPORATION, a Maryland corporation (the "Issuer"), which
term includes any successor under the Indenture hereinafter referred to, for
value received, hereby promises to pay to Cede & Co., a nominee of The
Depository Trust Company ("DTC"), or its registered assigns, the principal
amount of Seventy Five Million Dollars ($75,000,000), on the Stated Maturity
Date specified above (or any earlier redemption date or repurchase date) (each
such Stated Maturity Date, redemption date or repurchase date being hereinafter
referred to as the "Maturity Date" with respect to the principal repayable on
such date) and to pay interest thereon, at the Interest Rate per annum specified
above to March 31, 2003 (the "Remarketing Date"), and thereafter, subject to the
terms and conditions set forth herein, at the Interest Rate determined by the
Remarketing Dealer (as defined below) in accordance with the procedures set
forth below (the "Interest Rate to Maturity"), until the principal hereof is
paid or duly made available for payment. The Issuer will pay interest in arrears
on each Interest Payment Date, if any, specified above (each, an "Interest
Payment Date"), commencing with the first Interest Payment Date next succeeding
the Original Issue Date specified above, and on the Maturity Date; provided,
however, that if the Original Issue Date occurs between a Record Date (as
defined below) and the next succeeding Interest Payment Date, interest payments
will commence on the second Interest Payment Date next succeeding the Original
Issue Date to the Holder of this MOPPRS on the Record Date with respect to such
second Interest Payment Date. Interest on this MOPPRS will be computed on the
basis of a 360-day year of twelve 30-day months.
If, pursuant to the Remarketing Agreement, dated as of the date hereof
(the "Remarketing Agreement"), between Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as Remarketing Dealer (the "Remarketing Dealer"), and the Issuer,
the Remarketing Dealer elects to remarket the MOPPRS, then, except as otherwise
set forth herein, (i) this MOPPRS shall be subject to mandatory tender to the
Remarketing Dealer for remarketing on the Remarketing Date, on the terms and
subject to the conditions set forth herein, and (ii) on and after the
Remarketing Date, this MOPPRS shall bear interest at the Interest Rate to
Maturity determined by the Remarketing Dealer in accordance with the procedures
set forth in Section 3 herein. The Remarketing Dealer's duties set forth herein
shall be performed pursuant to the Remarketing Agreement.
Interest on this MOPPRS will accrue from, and including, the
immediately preceding Interest Payment Date to which interest has been paid or
duly provided for (or from, and including, the Original Issue Date, if no
interest has been paid or duly provided for) to, but excluding, the applicable
Interest Payment Date or the Maturity Date, as the case may be. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, subject to certain exceptions described herein, be paid to the person in
whose name this MOPPRS (or one or more predecessor MOPPRS) is registered at the
close of business on the fifteenth calendar day (whether or not a Business Day,
as defined below) immediately preceding such Interest Payment Date (the "Record
Date"). Any interest on the MOPPRS that is payable, but that is not punctually
paid or duly provided for on any Interest Payment Date ("Defaulted Interest")
will forthwith cease to be payable to the registered Holder on the relevant
Record Date and may be paid by the Issuer either (i) to the Persons in whose
names the MOPPRS are registered at the close of business on a Special Record
Date, which shall be fixed by the Trustee for the payment of such Defaulted
Interest on a date not more than 15 days nor less than 10 days
2
<PAGE> 8
prior to the date of the proposed payment and no less than 10 days after the
receipt by the Trustee of the notice of the proposed payment by the Issuer as
provided for in the Indenture, or (ii) in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
MOPPRS may be listed and upon such notice as may be required by such exchange
if, after notice given by the Issuer to the Trustee of the proposed payment
pursuant to the procedures set forth in the Indenture, such manner of payment
shall be deemed practicable by the Trustee.
Payment of principal and premium, if any, in respect of this MOPPRS due
on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this MOPPRS at the corporate trust office of the
Trustee maintained for that purpose in the Borough of Manhattan, The City of New
York, currently located at 40 Broad Street, Suite 550, New York, New York 10004
or at such other paying agency in the Borough of Manhattan, The City of New
York, as the Issuer may determine. Payment of interest due on any Interest
Payment Date will be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Security Register maintained at the
aforementioned office of the Trustee; provided, however, that a Holder of U.S.
$10,000,000 or more in aggregate principal amount of MOPPRS will be entitled to
receive interest payments on such Interest Payment Date by wire transfer of
immediately available funds if appropriate wire transfer instructions have been
received in writing by the Trustee not less than 15 calendar days prior to such
Interest Payment Date. Any such wire transfer instructions received by the
Trustee shall remain in effect until revoked by such Holder. Notwithstanding the
foregoing or any provision hereof, if this MOPPRS is a global Security (as
evidenced by the legend first set forth above and provided in the Indenture),
and is held in book-entry form through the facilities of DTC, payments on this
MOPPRS will be made to DTC or its nominee in accordance with the arrangements
then in effect between the Trustee and DTC.
If any Interest Payment Date or the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and/or interest, shall be made on the next succeeding Business Day with the same
force and effect as if it were made on the date such payment was due, and no
interest shall accrue with respect to such payment for the period from and after
such Interest Payment Date or the Maturity Date, as the case may be, to the date
of such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day other than a Saturday,
Sunday, or other day on which banking institutions are authorized or required by
law, regulation or executive order to close in The City of New York.
The Issuer is obligated to make payment of principal, premium, if any,
and interest in respect of this MOPPRS in United States dollars.
Reference is hereby made to the further provisions of this MOPPRS set
forth following the Trustee's Certificate of Authentication (the "Certificate of
Authentication") set forth below.
3
<PAGE> 9
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this MOPPRS shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
4
<PAGE> 10
IN WITNESS WHEREOF, JDN REALTY CORPORATION has caused this MOPPRS to be
duly executed.
JDN REALTY CORPORATION
as Issuer
By:
-----------------------------
Name:
Title:
Attest:
- --------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: FIRST UNION NATIONAL BANK, ATLANTA,
as Trustee
By:
------------------------------
Authorized Signatory
5
<PAGE> 11
JDN REALTY CORPORATION
MEDIUM-TERM NOTE
6.918% MandatOry Par Put Remarketed Securities(SM)
("MOPPRS(SM)") due March 31, 2013
1. Indenture. (a) This MOPPRS is one of a duly authorized series of
Securities of the Issuer issued under an Indenture, dated as of July 15, 1997
(as amended, modified or supplemented from time to time, the "Indenture"),
between the Issuer and First Union National Bank, Atlanta, as Trustee (the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Issuer, the Trustee and the Holders of the MOPPRS,
and of the terms upon which the MOPPRS are authenticated and delivered. This
Security is designated as "6.918% MandatOry Par Put Remarketed Securities(SM)
due March 31, 2013" ("MOPPRS(SM)") of the series designated "Medium-Term Notes
Due Nine Months or More From Date of Issue" of the Issuer, subject to the
provisions of the Indenture. All terms used but not defined in this MOPPRS shall
have the meanings assigned to such terms in the Indenture. Except where the
context otherwise requires, all references in this MOPPRS to "this MOPPRS,"
"this Security," "herein" or "hereof" or similar terms shall include the
Indenture.
(b) This MOPPRS is issuable only in registered form without coupons in
minimum denominations of U.S. $1,000 and integral multiples thereof.
(c) This MOPPRS will not be subject to any sinking fund.
2. Mandatory Tender. Provided that on a Business Day not later than
five Business Days prior to the Remarketing Date the Remarketing Dealer notifies
the Issuer and the Trustee of its election to purchase the MOPPRS on the
Remarketing Date for remarketing (the "Notification Date"), the MOPPRS shall be
subject to mandatory tender to the Remarketing Dealer, and the Remarketing
Dealer shall be obligated to purchase the MOPPRS, for remarketing on the
Remarketing Date, subject in each case to the conditions described herein and
set forth in the Remarketing Agreement. The purchase price for the tendered
MOPPRS shall equal 100% of the principal amount thereof. From and after the
Remarketing Date, the MOPPRS shall bear interest at the Interest Rate to
Maturity determined pursuant to Section 3 hereof. If the Remarketing Dealer
elects to remarket the MOPPRS, the obligation of the Remarketing Dealer to
purchase the MOPPRS on the Remarketing Date is subject to the conditions
specified in Section 8 of the Remarketing Agreement. If the Remarketing Dealer
purchases any MOPPRS on the Remarketing Date, it must purchase all of the
MOPPRS. If for any reason the Remarketing Dealer does not purchase all of the
MOPPRS on the Remarketing Date, the Issuer shall be required to repurchase from
the Beneficial Owners thereof, and the Beneficial Owners will be required to
sell to the Issuer, all of the MOPPRS at a price equal to the principal amount
thereof plus all accrued and unpaid interest, if any, on the MOPPRS to the
Remarketing Date as provided in Section 4 hereof.
6
<PAGE> 12
"Beneficial Owner" shall mean each person who acquires an interest in
the MOPPRS which is reflected on the records of the DTC through its
participants.
3. Determination of Interest Rate to Maturity. (a) Subject to the
Remarketing Dealer's election to remarket the MOPPRS as provided in Section 2
hereof and subject further to Sections 3(c) and 5 hereof and the Remarketing
Agreement, the Interest Rate to Maturity shall be determined by the Remarketing
Dealer no later than 3:30 p.m., New York City time, on and as of the third
Business Day immediately preceding the Remarketing Date (the "Determination
Date") to the nearest one hundred-thousandth (0.00001) of one percent per annum,
and will be equal to the sum of 5.637% (the "Base Rate") plus the Applicable
Spread, which will be based on the Dollar Price (as defined below) of the
MOPPRS. The Interest Rate to Maturity announced by the Remarketing Dealer,
absent manifest error, shall be binding and conclusive upon the Beneficial
Owners and Holders of the MOPPRS, the Issuer and the Trustee.
The "Applicable Spread" will be the lowest bid indication, expressed as
a spread (in the form of a percentage or in basis points) above the Base Rate,
obtained by the Remarketing Dealer on the Determination Date from the bids
quoted by five Reference Corporate Dealers (as defined below) for the full
aggregate principal amount of the MOPPRS at the Dollar Price, but assuming (i)
an issue date equal to the Remarketing Date, with settlement on such date
without accrued interest, (ii) a maturity date equal to the Stated Maturity Date
of the MOPPRS, and (iii) a stated annual interest rate, payable semiannually on
each Interest Payment Date, equal to the Base Rate plus the spread bid by the
applicable Reference Corporate Dealer. If fewer than five Reference Corporate
Dealers bid as described above, then the Applicable Spread shall be the lowest
of such bid indications obtained as described above.
"Dollar Price" means, with respect to the MOPPRS, the present value as
determined by the Remarketing Dealer, as of the Remarketing Date, of the
Remaining Scheduled Payments (as defined below) discounted to the Remarketing
Date, on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months), at the Treasury Rate (as defined below).
"Reference Corporate Dealers" mean leading dealers of publicly traded
debt securities of the Issuer in The City of New York (which may include the
Remarketing Dealer or one of its affiliates) selected by the Remarketing Dealer.
"Treasury Rate" means, with respect to the Remarketing Date, the rate
per annum equal to the semiannual equivalent yield to maturity or interpolated
(on a day count basis) yield to maturity of the Comparable Treasury Issues (as
defined below), assuming a price for the Comparable Treasury Issues (expressed
as a percentage of its principal amount), equal to the Comparable Treasury Price
for the Remarketing Date.
"Comparable Treasury Issues" means the United States Treasury security
or securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
MOPPRS being purchased.
7
<PAGE> 13
"Comparable Treasury Price" means, with respect to the Remarketing
Date, (a) the offer prices for the Comparable Treasury Issues (expressed in each
case as a percentage of its principal amount) on the Determination Date, as set
forth on "Telerate Page 500" (or such other page as may replace Telerate Page
500) or (b) if such page (or any successor page) is not displayed or does not
contain such offer prices on such Determination Date, (i) the average of the
Reference Treasury Dealer Quotations for the Remarketing Date, after excluding
the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the
Remarketing Dealer obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Telerate Page 500" means the display designated as "Telerate Page 500" on Dow
Jones Markets Limited (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer prices specified in (a)
above as may replace Dow Jones Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the Remarketing Date, the offer prices for the
Comparable Treasury Issues (expressed in each case as a percentage of its
principal amount) quoted to the Remarketing Dealer by such Reference Treasury
Dealer by 3:30 p.m., New York City time, on the Determination Date.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Salomon Brothers Inc (or
their respective affiliates which are primary U.S. Government securities
dealers) and their respective successors; provided, however, that if any of the
foregoing or their affiliates shall cease to be a primary U.S. Government
securities dealer in The City of New York (a "Primary Treasury Dealer"), the
Remarketing Dealer shall substitute therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to the MOPPRS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing Date
to and including the Stated Maturity Date, as determined by the Remarketing
Dealer; provided, however, that if the Remarketing Date is not an Interest
Payment Date with respect to the MOPPRS, the amount of the next succeeding
scheduled interest payment thereon, calculated at the Base Rate only, will be
reduced by the amount of interest accrued thereon, calculated at the Base Rate
only, to the Remarketing Date.
(b) Provided the Remarketing Dealer has previously notified the Issuer
and the Trustee on the Notification Date of its intention to purchase all of the
MOPPRS on the Remarketing Date and subject to Section 5 below, the Remarketing
Dealer will notify the Issuer, the Trustee and DTC by telephone, confirmed in
writing (which may include facsimile or other electronic transmission), by 4:00
p.m., New York City time, on the Determination Date, of the Interest Rate to
Maturity. All of the tendered MOPPRS shall be automatically delivered to the
account of the Trustee, by book-entry through DTC pending payment of the
purchase price therefor, on the Remarketing Date.
8
<PAGE> 14
In the event that the Remarketing Dealer purchases the tendered MOPPRS
on the Remarketing Date, the Remarketing Dealer shall make or cause the Trustee
to make payment to the DTC Participant of each Beneficial Owner of MOPPRS, by
book-entry through DTC no later than the close of business on the Remarketing
Date against delivery through DTC of such Beneficial Owner's tendered MOPPRS, of
100% of the principal amount of the tendered MOPPRS that have been purchased for
remarketing by the Remarketing Dealer. If the Remarketing Dealer does not
purchase all of the MOPPRS on the Remarketing Date, it shall be the obligation
of the Issuer to make or cause to be made such payment for the MOPPRS, as
provided in Section 4 hereof. In any case, the Issuer shall make or cause the
Trustee to make payment of interest to each Beneficial Owner of MOPPRS due on
the Remarketing Date by book-entry through DTC no later than the close of
business on the Remarketing Date.
"DTC Participant" shall mean any person that has an account with DTC
through which Beneficial Owners acquire, directly or indirectly, an interest in
the MOPPRS.
The transactions set forth in this Section shall be executed on the
Remarketing Date through DTC in accordance with the procedures of DTC, and the
accounts of the respective DTC Participants will be debited and credited and the
MOPPRS delivered by book-entry as necessary to effect the purchases and sales
thereof.
The tender and settlement procedures set forth above, including
provisions for payment by purchasers of MOPPRS in the remarketing or for payment
to selling Beneficial Owners of MOPPRS, may be modified to the extent required
by DTC or to the extent required to facilitate the tender and remarketing of
MOPPRS in certificated form, if the book-entry system is no longer available for
the MOPPRS at the time of the remarketing. In addition, the Remarketing Dealer
may, without the consent of Holders or Beneficial Owners of the MOPPRS, modify
the tender and settlement procedures set forth above in order to facilitate the
tender and settlement process.
As long as DTC's nominee holds the certificates representing any MOPPRS
in the book-entry system of DTC, no certificates for such MOPPRS will be
delivered by any selling Beneficial Owner to reflect any transfer of such MOPPRS
effected in the remarketing.
(c) Notwithstanding any provision herein to the contrary, upon the
occurrence, at any time after determination of the Interest Rate to Maturity on
the Determination Date and prior to 3:30 p.m., New York City time, on the
Business Day immediately preceding the Remarketing Date, of any event as
specified in Section 11(b) of the Remarketing Agreement, the Remarketing Dealer,
in its sole discretion at any time between the Determination Date and 3:30 p.m.,
New York City time, on the Business Day immediately preceding the Remarketing
Date, may elect to purchase the MOPPRS for remarketing and determine a new
Interest Rate to Maturity in the manner provided in Section 3(a) hereof, except
that for purposes of determining the new Interest Rate to Maturity pursuant to
this paragraph, the Determination Date referred to therein shall be the date of
such election and redetermination. The Remarketing Dealer shall notify the
Issuer, the Trustee and DTC by telephone, confirmed in writing (which may
include facsimile or other
9
<PAGE> 15
electronic transmission), by 4:00 p.m., New York City time, on the date of such
election, of the new Interest Rate to Maturity applicable to the MOPPRS.
Thereupon, such new Interest Rate to Maturity shall supersede and replace any
Interest Rate to Maturity previously determined by the Remarketing Dealer and,
absent manifest error, shall be binding and conclusive upon the Beneficial
Owners and Holders of the MOPPRS on or after the Remarketing Date, the Issuer
and the Trustee.
4. Repurchase. In the event that (i) the Remarketing Dealer for any
reason does not notify the Issuer of the Interest Rate to Maturity by 4:00 p.m.,
New York City time, on the Determination Date, or (ii) prior to the Remarketing
Date, the Remarketing Dealer has resigned and no successor has been appointed on
or before the Determination Date, or (iii) at any time after the Remarketing
Dealer elects on the Notification Date to remarket the MOPPRS, the Remarketing
Dealer terminates the Remarketing Agreement due to the occurrence of any event
as set forth in Section 8 or Section 11 of the Remarketing Agreement shall have
occurred, or (iv) the Remarketing Dealer for any reason does not elect to
purchase the MOPPRS for remarketing on the Remarketing Date, or (v) the
Remarketing Dealer for any reason does not purchase all tendered MOPPRS on the
Remarketing Date, the Issuer shall repurchase all the MOPPRS as a whole on the
Remarketing Date at a price equal to 100% of the principal amount of the MOPPRS
plus all accrued and unpaid interest, if any, on the MOPPRS to the Remarketing
Date. In any such case, payment will be made by the Issuer through the Trustee
to the DTC Participant of each tendering Beneficial Owner of MOPPRS, by
book-entry through DTC no later than the close of business on the Remarketing
Date against delivery through DTC of such Beneficial Owner's tendered MOPPRS.
5. Redemption. If the Remarketing Dealer elects to remarket the MOPPRS
on the Remarketing Date, then not later than the close of business on the
Business Day immediately preceding the Determination Date, the MOPPRS shall be
subject to redemption at the option of the Issuer from the Remarketing Dealer,
as a whole but not in part, as set forth in this Section. The Issuer shall
notify the Remarketing Dealer and the Trustee, not later than the close of
business on the Business Day immediately preceding the Determination Date, as to
whether the Issuer irrevocably elects to exercise its right to redeem the
MOPPRS, in whole but not in part, from the Remarketing Dealer on the Remarketing
Date at the Optional Redemption Price. If the Issuer so elects, it shall redeem
the MOPPRS by payment to the Remarketing Dealer as provided in the Remarketing
Agreement. If the Issuer fails to elect, or elects not, to redeem the MOPPRS
pursuant to this Section 5, the Remarketing Dealer will determine the Interest
Rate to Maturity on the Determination Date as provided in Section 3(a) hereof.
The "Optional Redemption Price" shall be the greater of (i) 100% of the
principal amount of the MOPPRS and (ii) the Dollar Price, plus in either case
accrued and unpaid interest from the Remarketing Date on the principal amount
being redeemed to the date of redemption. If the Issuer elects to redeem the
MOPPRS, it shall pay the redemption price therefor in same-day funds by wire
transfer to an account designated by the Remarketing Dealer on the Remarketing
Date.
10
<PAGE> 16
6. Effect of Events of Default. If an Event of Default, as defined in
the Indenture, shall occur and be continuing, the principal of the MOPPRS may be
declared due and payable in the manner and with the effect provided in the
Indenture.
7. Defeasance. Notwithstanding any provision to the contrary in the
Indenture or otherwise, prior to the Remarketing Date, neither the Issuer nor
any of its subsidiaries or affiliates shall defease, purchase or otherwise
acquire, or enter into any agreement to defease, purchase or otherwise acquire,
any of the MOPPRS prior to the remarketing thereof by the Remarketing Dealer.
8. Maintenance in Book-Entry Form. Notwithstanding any provision to the
contrary set forth in the Indenture, the Issuer (i) shall use its best efforts
to maintain the MOPPRS in book-entry form with DTC or any successor thereto and
to appoint a successor depositary to the extent necessary to maintain the MOPPRS
in book-entry form, and (ii) waives any discretionary right it otherwise has
under the Indenture to cause the MOPPRS to be issued in certificated form.
9. Amendment and Modification. The tender and settlement procedures may
be modified as provided in Section 3(b) above. In addition, the Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Issuer and the rights of
the Holders of the Securities at any time by the Issuer and the Trustee with the
consent of the Holders of not less than a majority of the aggregate principal
amount of all Securities at the time outstanding and affected thereby. The
Indenture also contains provisions permitting the Holders of not less than a
majority of the aggregate principal amount of the outstanding Securities of any
series, on behalf of the Holders of all such Securities, to waive compliance by
the Issuer with certain provisions of the Indenture. Furthermore, provisions in
the Indenture permit the Holders of not less than a majority of the aggregate
principal amount of the outstanding Securities of any series, in certain
instances, to waive, on behalf of all of the Holders of Securities of such
series, certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this MOPPRS shall be conclusive and
binding upon such Holder and upon all future Holders of this MOPPRS and other
MOPPRS issued upon the registration or transfer hereof or in exchange heretofore
or in lieu hereof, whether or not notation or such consent or waiver is made
upon this MOPPRS.
10. Obligation to Pay Principal, Premium, if any, and Interest. No
reference herein to the Indenture and no provision of this MOPPRS or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay principal, premium, if any, and interest in respect of
this MOPPRS at the times, places and rate or formula, and in the manner and coin
or currency, herein prescribed.
11. Transfer and Exchange. As provided in the Indenture and subject to
certain limitations therein and herein set forth (including without limitation
the restrictions on transfer under the Indenture in the event this MOPPRS is a
global Security as evidenced by the legend first set forth above and provided in
the Indenture), the transfer of this MOPPRS is registrable in the Security
Register of the Issuer upon surrender of this MOPPRS for registration of
transfer
11
<PAGE> 17
at the office or agency of the Security Registrar in The City of New York, New
York designated for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Security
Registrar duly executed by, the Holder hereof or by his attorney duly authorized
in writing, and thereupon one or more new MOPPRS, of authorized denominations
and for the same aggregate principal amount and otherwise bearing identical
terms and provisions, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth (including without limitation the restrictions on transfer
under the Indenture in the event this MOPPRS is a global Security as evidenced
by the legend first set forth above and provided in the Indenture), this MOPPRS
is exchangeable for a like aggregate principal amount of MOPPRS of different
authorized denominations but otherwise having the same terms and conditions, as
requested by the Holder hereof surrendering the same at the office or agency of
the Security Registrar in The City of New York, New York designated for such
purpose.
No service charge shall be made for any such registration of transfer
or exchange of MOPPRS, but the Issuer or the Security Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto. Initially, the Trustee will act as Security
Registrar and the office at which this MOPPRS must be surrendered for
registration of transfer or exchange is currently the corporate trust department
of the Trustee at 40 Broad Street, Suite 550, New York, New York 10004.
Prior to due presentment of this MOPPRS for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
person in whose name this MOPPRS is registered as the owner thereof for all
purposes, whether or not this MOPPRS be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
12. Governing Law. The Indenture and this MOPPRS shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely in such State without regard to
conflict of law principles.
12
<PAGE> 18
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this MOPPRS, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - _________ Custodian __________
(Cust) (minor)
under Uniform Gifts to Minors Act
________________ (State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
----------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
this MOPPRS and all
rights thereunder hereby irrevocably constituting and appointing
Attorney to transfer this MOPPRS
on the books of the Trustee, with full power of substitution in the premises.
Dated:
Notice: The signature(s) on
this Assignment must
correspond with the name(s)
as written upon the face of
this MOPPRS in every
particular, without
alteration or enlargement
or any change whatsoever.
13
<PAGE> 1
WALLER LANSDEN DORTCH & DAVIS
A Professional Limited Liability Company
NASHVILLE CITY CENTER
511 UNION STREET, SUITE 2100
POST OFFICE BOX 198966
NASHVILLE, TENNESSEE 37219-8966
FACSIMILE (615) 244-6380 809 SOUTH MAIN STREET
(615) 244-6804 P.O. BOX 1035
COLUMBIA, TN 38402-1035
(931) 388-6031
March 31, 1998
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
BT Alex. Brown Incorporated
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
RE: JDN REALTY CORPORATION -
PRICING SUPPLEMENT DATED MARCH 25, 1998
(TO THE PROSPECTUS DATED OCTOBER 30, 1997 AND THE
PROSPECTUS SUPPLEMENT DATED FEBRUARY 5, 1998)
Ladies and Gentlemen:
We have acted as special tax counsel to JDN Realty Corporation, a Maryland
corporation (the "Company"), in connection with the proposed issue and sale of
$75,000,000 of the Company's 6.918% MandatOry Par Put Remarketed Securities(SM)
(the "MOPPRS") due March 31, 2013 under the terms of the Distribution Agreement
dated February 5, 1998 and the Terms Agreement, dated March 25, 1998 (together,
the "Agreement"), by and between the Company and you, as agents (the "Agents"),
as more fully described in the Company's Pricing Supplement dated March 25, 1998
(to the Prospectus Supplement dated February 5, 1998 and the Prospectus dated
October 30, 1997), included in the Registration Statement on Form S-3 (File No.
333-38611) (the "Registration Statement"). In connection with the public
offering of the MOPPRS, 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, December 31, 1996 and
December 31, 1997 and that 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, the Prospectus
Supplement or the Pricing Supplement shall have the same respective meanings as
set forth in the Registration Statement, the Prospectus Supplement or the
Pricing Supplement pertaining to the offering of the MOPPRS.
<PAGE> 2
WALLER LANSDEN DORTCH & DAVIS
A Professional Limited Liability Company
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
BT Alex. Brown Incorporated
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
March 31, 1998
Page 2
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, 1994 and for fiscal years ended December 31, 1995, 1996 and 1997,
together with a 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, 1996 and 1997 and projected compliance with
such tests for the fiscal year ending December 31, 1998, including:
Income tests:
(1) 95% gross income test for the year;
(2) 75% gross income test for the year; and
(3) 30% gross income test for each year prior to the fiscal year
ending December 31, 1998; and
Asset tests:
(1) 75% asset test at the end of each quarter through
December 31, 1997;
(2) 25% asset test at the end of each quarter through
December 31, 1997;
(3) 10% asset test at the end of each quarter through
December 31, 1997; and
(4) 5% asset test at the end of each quarter through
December 31, 1997.
2. The Company's certificate, dated as of March 31, 1998.
In addition, we have examined such additional records, documents,
certificates and other instruments and made such investigations of fact and law
as in our judgment are necessary or appropriate to enable us to render the
opinion expressed below.
<PAGE> 3
WALLER LANSDEN DORTCH & DAVIS
A Professional Limited Liability Company
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
BT Alex. Brown Incorporated
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
March 31, 1998
Page 3
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
persons, as defined for purposes of Section 856(a)(5) of the Code; and five or
fewer persons 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 person will own, directly or indirectly, over 8% in 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 Charter.
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.
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, December 31, 1996 or
December 31, 1997.
7. The representations contained in the Company's certificate, dated
as of March 31, 1998, are accurate.
<PAGE> 4
WALLER LANSDEN DORTCH & DAVIS
A Professional Limited Liability Company
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
BT Alex. Brown Incorporated
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
March 31, 1998
Page 4
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 Company will not own over 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 5% of the value of the total
assets of the Company.
On the basis of and in reliance on 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, December 31,
1996 and December 31, 1997 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 Company's Form 8-K dated January 26,
1998 under the heading "Federal Income Tax and ERISA Considerations" and the
discussions in the Pricing Supplement and the Prospectus Supplement under the
heading "Certain United States Federal Income Tax Considerations" are correct in
all material respects and fairly summarize the federal income tax considerations
that are likely to be material to a holder of MOPPRS.
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 or
incorporated by reference into the Registration Statement with regard to, among
other things, the sources of its gross income, the composition of its assets,
the level of its distributions to shareholders, 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.
<PAGE> 5
WALLER LANSDEN DORTCH & DAVIS
A Professional Limited Liability Company
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
BT Alex. Brown Incorporated
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
March 31, 1998
Page 5
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
shareholders 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 "Federal Income Tax and ERISA Considerations" in the Company's Form 8-K
dated January 26, 1998, incorporated by reference into the Prospectus, and under
the caption "Legal Matters" in the Prospectus, the Prospectus Supplement and the
Pricing Supplement.
Very truly yours,
/s/ WALLER LANSDEN DORTCH & DAVIS
A Professional Limited Liability Company
