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EXHIBIT 1
JDN REALTY CORPORATION
(a Maryland corporation)
2,000,000 Shares of 9 3/8% Series A Cumulative Redeemable Preferred Stock,
par value $.01 per share
(Liquidation Preference $25.00 per share)
TERMS AGREEMENT
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Dated: September 10, 1998
To: JDN Realty Corporation
000 X. Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Ladies and Gentlemen:
We, the below listed underwriters (the "Representatives"),
understand that JDN Realty Corporation (the "Company") proposes to issue and
sell shares of 9 3/8% Series A Cumulative Redeemable Preferred Stock (the
"Series A Preferred Shares" or "Underwritten Securities"). Subject to the terms
and conditions set forth or incorporated by reference herein, each of the
underwriters named below (the "Underwriters") offers to purchase, severally and
not jointly, the respective numbers of Initial Underwritten Securities (as
defined in the Underwriting Agreement referred to below) set forth below
opposite their respective names, and a proportionate share of Option
Underwritten Securities (as defined in the Underwriting Agreement referred to
below) to the extent any are purchased, at the purchase price per Series A
Preferred Share set forth below.
Number of Shares of Initial
Underwriter Underwritten Securities
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X.X. Xxxxxxx & Sons, Inc. 845,000
X.X. Xxxxxxxx & Co., LLC 327,500
Interstate/Xxxxxxx Xxxx Corporation 327,500
Xxxxxx, Xxxxxxxx & Company Incorporated 500,000
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Total 2,000,000
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The Underwritten Securities shall have the following terms:
TITLE OF SECURITIES: 9 3/8% Series A Cumulative Redeemable Preferred Stock
NUMBER OF INITIAL UNDERWRITTEN SECURITIES: 2,000,000
PAR VALUE: $.01 per Series A Preferred Share
PUBLIC OFFERING PRICE PER SERIES A PREFERRED SHARE: $25.00
PURCHASE PRICE PER SERIES A PREFERRED SHARE: $24.2125
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NUMBER OF OPTION UNDERWRITTEN SECURITIES, IF ANY, THAT MAY BE PURCHASED BY THE
UNDERWRITERS: 300,000
DELAYED DELIVERY CONTRACTS: Not authorized
MANAGERS: X.X. Xxxxxxx & Sons, Inc., X.X. Xxxxxxxx & Co., LLC,
Interstate/Xxxxxxx Xxxx Corporation, Xxxxxx, Xxxxxxxx & Company
Incorporated
LIQUIDATION PREFERENCE: $25.00 per Series A Preferred Share
DIVIDENDS: Cumulative from the date of original issue; payable quarterly on or
about the last day of March, June, September and December of each year,
when and as declared, commencing September 30, 1998, at the rate of
9 3/8% of the $25.00 liquidation preference per annum (equivalent to a
fixed annual dividend of $2.3438 per share); dividends will accrue
whether or not the Company has earnings, whether or not there are funds
legally available for the payment of such dividends and whether or not
such dividends are authorized
REDEMPTION: The Series A Preferred Shares are not redeemable prior to September
15, 2003; on or after September 15, 2003, the Series A Preferred Shares
will be redeemable for cash at the option of the Company, in whole or
from time to time in part, at a redemption price of $25.00 per share,
plus accumulated, accrued and unpaid dividends, if any, to the
redemption date; the redemption price for any Series A Preferred Share
(other than any portion thereof consisting of accumulated, accrued and
unpaid dividends) shall be payable solely with the proceeds from the
sale by the Company of other capital shares (which term includes common
stock, preferred stock and other ownership interests) of the Company
(whether or not such sale occurs concurrently with such redemption) and
from no other source
RANKING: The Series A Preferred Shares will rank senior to any shares of the
Company's common stock, par value $.01 per share, with respect to the
payment of dividends and the distribution of amounts upon liquidation,
dissolution or winding up
VOTING RIGHTS: The Series A Preferred Shares generally will have no voting
rights; however, whenever dividends on the Series A Preferred Shares
are in arrears for six or more quarterly periods (whether or not
consecutive), the holders of such shares (voting together as a single
class with all other shares of any class or series of stock ranking on
a parity with the Series A Preferred Shares which are entitled to
similar voting rights) will been entitled to vote for the election of
two additional directors of the Company until all dividends in arrears
on outstanding Series A Preferred Shares have been paid or declared and
set apart for payment; in addition, certain changes to the terms of the
Series A Preferred Shares that would be materially adverse to the
rights of the holders of Series A Preferred Shares cannot be made
without the affirmative vote of holders of at least 66-2/3% of the
outstanding Series A Preferred Shares and shares of any class or series
of stock ranking on a parity with the Series A Preferred Shares which
are entitled to similar voting rights, voting as a single class
LISTING: Application shall be made to list the Series A Preferred Shares on the
New York Stock Exchange under the symbol "JDNPrA"
CONVERSION: The Series A Preferred Shares are not convertible into or
exchangeable for any other securities or property of the Company
MATURITY: The Series A Preferred Shares have no stated maturity and will not be
subject to any sinking fund or mandatory redemption
LOCK-UP AGREEMENT: In accordance with Section 3(k) of the Underwriting Agreement
(incorporated herein by reference), the Company shall not offer, sell,
offer to sell,
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contract to sell, pledge, grant any option to purchase or otherwise
sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or
disposition) of any Series A Preferred Shares or any securities
convertible or exercisable or exchangeable for any Series A Preferred
Shares or other securities of the Company which are substantially
similar to the Series A Preferred Shares, for a period of 30 days from
the date hereof in each case without the written consent of X.X.
Xxxxxxx & Sons, Inc. (which will not be unreasonably withheld)
CLOSING DATE AND LOCATION: September 17, 0000, Xxxxx & Xxxxxxx X.X.X., Xxxxxxxx
Square, 000 Xxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000
All the provisions contained in the document attached as Annex A hereto
entitled "JDN Realty Corporation (a Maryland corporation) -- Common Stock,
Common Stock Warrants, Preferred and Debt Securities -- Underwriting Agreement,"
dated July 30, 1997 (the "Underwriting Agreement"), are hereby incorporated by
reference in their entirety herein and, subject to any modifications to such
terms set forth below, 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. In
furtherance of the foregoing, certain provisions of the Underwriting Agreement
hereby are modified as follows:
(a) by deleting the reference to "$400 million" in the first paragraph
thereof and by inserting "$600 million" in lieu thereof;
(b) by deleting the reference to "(No. 333-22399)" contained in the
first sentence of the eighth paragraph thereof in its entirety and to insert
"(No. 333-38611, or any successor thereto)" in lieu thereof;
(c) by deleting the phrase "prior to the execution of this Underwriting
Agreement" in the 19th line of the eighth paragraph thereof and by inserting "as
of the date of such Registration Statement or Prospectus, as the case may be,
and all references to the `Prospectus' shall be deemed to include all documents
incorporated by reference therein prior to the termination of the offering of
the Underwritten Securities by the Underwriters" in lieu thereof;
(d) by deleting each reference to Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated" and "Xxxxxxx Xxxxx" therein and by
inserting "X.X. Xxxxxxx & Sons, Inc." in lieu thereof;
(e) by deleting Paragraph (4) ("Financial Statements") of Section 1
thereof in its entirety and by inserting in lieu thereof the following:
(4) Financial Statements. The consolidated 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 in the Registration Statement and the Prospectus, present
fairly the consolidated financial position of the Company and its
subsidiaries, or such other entity, as the case may be, at the dates
indicated and the consolidated statements of operations, shareholders'
equity and cash flows of the
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Company and its subsidiaries, or such other entity, as the case may
be, for the periods specified; the combined statements of revenue and
certain expenses of certain properties acquired or to be acquired by
the Company included in the Registration Statement and the Prospectus,
together with the related notes, present fairly the combined revenues
and expenses of such properties at the dates indicated and are in
conformity with the requirements of Rule 3-14 of Regulation S-X
promulgated under the 1933 Act; 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, when considered in relation
to the basic financial statements taken as a whole, present fairly in
accordance with GAAP the information required to be stated therein;
any selected financial data and the summary financial information
included in the Registration Statement and 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; and any pro forma
consolidated financial statements of the Company and its subsidiaries
and the related notes thereto included in the Registration Statement
and the Prospectus present fairly the information shown therein, have
been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements, and have been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein. No other financial statements are
required to be set forth or to be incorporated by reference in the
Registration Statement or the Prospectus under the 1933 Act or the
1933 Act Regulations;
(f) by deleting Paragraph (7) ("Good Standing of Subsidiaries") of
Section 1 thereof in its entirety and by inserting in lieu thereof the
following:
(7) Good Standing of Significant Subsidiaries. Each significant
subsidiary (as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the 1933 Act), if any, and JDN Development (each, a
"Significant Subsidiary") has been duly organized and is validly
existing and in good standing under the laws of the jurisdiction of
its formation, has the requisite 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
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 stated in the Prospectus, all of
the issued and outstanding equity securities of each Significant
Subsidiary have been duly authorized and are validly issued, fully
paid and non-assessable and are 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. Xxxxxx
Xxxxxxx 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; and none of the
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outstanding shares of capital stock of any Significant Subsidiary was
issued in violation of preemptive or other similar rights of any
securityholder of such Significant Subsidiary;
(g) by deleting Paragraph (8) ("Capitalization") of Section 1 thereof
in its entirety and by inserting in lieu thereof the following:
(8) Capitalization. The Company has authorized, issued and
outstanding stock as set forth in the Company's Quarterly Report on
Form 10-Q filed with the Commission for the period ended June 30, 1998
(except for subsequent issuances of Common Stock pursuant to the
Company's Dividend Reinvestment and Stock Purchase Plan, 1995 Employee
Stock Purchase Plan, 1993 Incentive Stock Plan and 1993 Non-Employee
Director Stock Option Plan). Such shares of capital stock have been
duly authorized and validly issued by the Company and are fully paid
and non-assessable, and none of such shares of capital stock was
issued in violation of preemptive or other similar rights of any
securityholder of the Company;
(h) by deleting Paragraph (23) ("Absence of Further Requirements") of
Section 1 thereof in its entirety and by inserting in lieu thereof the
following:
(23) 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 the applicable
Terms Agreement or in connection with the transactions contemplated
under this Underwriting Agreement, such Terms Agreement or any
applicable Indenture or Warrant Agreement, except for the registration
of the Underwritten Securities under the 1933 Act or under state
securities laws, compliance with the listing requirements of the New
York Stock Exchange, or approval of the National Association of
Securities Dealers, Inc., if applicable, all of which have been or
will be effected in accordance with this Agreement;
(i) by deleting Paragraph (26) ("Title to Property") of Section 1
thereof in its entirety and by inserting in lieu thereof the following:
(26) 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 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 described in or incorporated by
reference into the Registration Statement or the Prospectus, and with
respect to other Properties that, singly or in the aggregate, did not
account for more than either (i) 10 percent of the total assets on the
Company's December 31, 1997 or June 30, 1998 consolidated balance
sheets or (ii) 10 percent of the
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Company's total revenues on the Company's consolidated statements of
income for the year ended December 31, 1997 or the six months ended
June 30, 1998, 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;
(j) by deleting Paragraph (27) ("Leases") of Section 1 thereof in its
entirety and by inserting in lieu thereof the following:
(27) 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. Except as disclosed in or
incorporated by reference into the Prospectus and except as would not
have a Material Adverse Effect, the Company has no knowledge that any
tenant which is responsible for aggregate annualized base rent in
excess of $1,200,000 under all of its leases at the Properties is not
financially capable of performing its obligations thereunder. 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;
(k) by deleting the word "and" in the 31st ;line of Paragraph (30)
("Environmental Laws") of Section 1 thereof and by inserting the following in
the 34th line thereof after the comma and before the word "the:"
and (5) a corrective action plan required by the State of
Georgia (relating to soil and ground water affected by an underground
storage tank release) of the owner of the Golden Gallon site near the
Company's Lafayette, Georgia property;
(l) by renumbering Paragraph (32) ("Tax Compliance") of Section 1
thereof as Paragraph (31) and by adding in the eighth line of such Paragraph
after the word "paid" and before the comma the following: "except where failure
to pay would not result in a Material Adverse Effect";
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(m) by deleting the references to "signed" in the third and sixth lines
of Paragraph (c) of Section 3 thereof and by inserting "conformed" in lieu
thereof; and
(n) by deleting the words "Xxxxxxx Xxxxx at World Financial Center,
Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 attention of: Xxxxxx Xxxxxxx,
Director" in the second sentence of Section 11 thereof and by inserting the
words "X.X. Xxxxxxx & Sons, Inc., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx,
Xxxxxxxx 00000, Attention: Syndicate" in lieu thereof.
The Company represents and warrants to the Underwriters that the
representations and warranties of the Company set forth in Section 1 of the
Underwriting Agreement, as modified in the preceding paragraph, are accurate as
though expressly made at and as of the date hereof.
The parties hereto agree and acknowledge that the information set forth
in the last paragraph on the cover page and in the second paragraph under the
caption "Underwriting" in the Prospectus Supplement dated September 10, 1998
constitutes the only information furnished by the Underwriters to the Company
for inclusion in the Registration Statement and the Prospectus.
Except as otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined.
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Please accept this offer no later than 12:00 p.m. (New York City time)
on September 10, 1998 by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours,
X.X. Xxxxxxx & Sons, Inc.
X.X. Xxxxxxxx & Co., LLC
Interstate/Xxxxxxx Xxxx Corporation
Xxxxxx, Xxxxxxxx & Company Incorporated
By: X.X. XXXXXXX & SONS, INC.
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Vice President
Accepted:
By: JDN REALTY CORPORATION
By: /s/ J. Xxxxxx Xxxxxxx
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Name: J. Xxxxxx Xxxxxxx
Title: Chairman and Chief Executive Officer
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