Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Highwoods Properties, Inc. S-4 211 1.38M
2: EX-5 Exhibit 5.1 1 8K
3: EX-8 Exhibit 8.1 7 36K
4: EX-8 Exhibit 8.2 6 32K
5: EX-8 Exhibit 8.3 9 60K
6: EX-23 Exhibit 23.3 1 9K
7: EX-23 Exhibit 23.4 1 7K
8: EX-23 Exhibit 23.5 1 7K
9: EX-23 Exhibit 23.6 1 6K
EX-8 — Exhibit 8.1
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Exhibit 8.1
June 1, 1998
J. C. Nichols Company
310 Ward Parkway
Kansas City, Missouri 64112
Ladies & Gentlemen:
We have acted as counsel to J. C. Nichols Company, a corporation organized
under the laws of Missouri ("JCN"), in connection with its planned merger
("Merger") with and into Jackson Acquisition Corp. ("Jackson"), a corporation
organized under the laws of Maryland and a wholly-owned subsidiary of Highwoods
Properties, Inc., a real estate investment trust organized under the laws of
Maryland ("Highwoods"), pursuant to the Agreement and Plan of Merger
("Agreement"), dated as of December 22, 1997, and as amended as of April 29,
1998, by and among Highwoods, Jackson and JCN. In our capacity as counsel to
JCN, our opinion has been requested with respect to certain of the federal
income tax consequences of the Merger and the federal income tax consequences
to holders of JCN Common who exercise dissenters' rights.
For purposes of the opinion set forth below, we have relied, with the
consent of JCN and Highwoods, upon the accuracy and completeness of the factual
statements and factual representations (which factual statements and factual
representations we have neither investigated nor verified) contained in the
certificates of the officers of JCN and Highwoods to us dated May 21, 1998, and
May 28, 1998, respectively, attached hereto, and have assumed that such
certificates will be complete and accurate as of the effective date of the
Merger. Our opinion cannot be relied upon if any of the factual statements and
factual representations contained in the certificates of JCN and Highwoods is,
or later becomes, inaccurate.
In rendering this opinion, we have relied upon the accuracy of the
Registration Statement on form S-4 filed by Highwoods and the Proxy
Statement/Prospectus included therein (together, "Proxy Statement"). We have
also assumed that the transactions contemplated by the Agreement will be
consummated in accordance therewith and as described in the Proxy Statement and
that the Merger will qualify as a statutory merger under the applicable laws of
Maryland and Missouri. All capitalized terms used herein without definition
shall have the respective meanings specified in the Agreement, and unless
otherwise specified, all section references herein are to the Internal Revenue
Code of 1986 ("Code").
On the basis of the foregoing and our consideration of such other matters
of fact and law as we have deemed necessary or appropriate, it is our opinion,
under presently applicable federal income tax law, that, with respect to
Highwoods, JCN and Jackson:
(i) Each of Highwoods and JCN will be a party to a reorganization within
the meaning of Section 368(b) of the Code.
(ii) No gain or loss will be recognized by Highwoods or JCN as a
consequence of the Merger.
With respect to holders of JCN Common, their potential differing
individual situations make it impractical to address all of the possible
federal income tax consequences of the Merger. Thus, we have made no attempt to
comment on the federal income tax consequences to holders of JCN Common who:
(i) Are subject to special tax rules, such as dealers in securities,
mutual funds, insurance companies, financial institutions or
tax-exempt entities;
(ii) Do not hold their JCN Common as capital assets;
(iii) Immediately prior to the Merger own shares of Highwoods Common;
(iv) Received their JCN Common upon the exercise of employee stock options
or otherwise as compensation;
(v) For federal income tax purposes:
(a) Have attributed to them JCN Common or Highwoods Common owned by
family members or related entities;
(b) Are non-resident alien individuals, foreign corporations, foreign
partnerships or foreign estates or trusts;
(c) Are required to recognize unrealized gains and losses at the end
of each taxable year under a mark-to-market system.
(d) Hold their JCN Common as part of a "straddle" or "conversion
transaction".
Except with respect to the foregoing special situations, it is our
opinion, under presently applicable federal income tax law, that the material
federal income tax consequences with respect to consideration to be received in
the Merger by JCN Shareholders and by JCN Shareholders exercising dissenters'
rights are set forth below:
(i) The JCN Shareholders will recognize no gain or loss upon their
exchange of JCN Common solely for shares of Highwoods Common.
(ii) If a JCN Shareholder receives both cash and Highwoods Common as a
result of the Merger, then gain (but not loss) will be recognized,
but not in an amount in excess of the amount of cash received. The
general rule is that any such gain will be treated as capital gain,
but if the exchange has the effect of the distribution of a dividend,
then the amount of gain recognized that is not in excess of the JCN
Shareholder's ratable share of the undistributed earnings and profits
of JCN will be treated as a dividend, rather than capital gain. The
determination of whether the exchange has the effect of the
distribution of a dividend will be made on a shareholder by
shareholder basis. Any such gain will generally be treated as capital
gain if, viewed as a redemption of Highwoods Common, such redemption
would have qualified as being "substantially disproportionate" under
Section 302(b)(2) of the Code. The substantially disproportionate
test is applied by assuming that the JCN Shareholder had received
Highwoods Common instead of cash and such Highwoods Common was
redeemed immediately after the Merger. The substantially
disproportionate test will be met if after the transaction the JCN
Shareholder will own less than fifty percent (50%) of all Highwoods
Common and if his or her percentage ownership of Highwoods Common
after the transaction is less than eighty percent (80%) of what his
or her percentage ownership of Highwoods Common would have been if no
Cash Elections had been made by JCN Shareholders in connection with
the Merger.
(iii) The basis of the Highwoods Common received by each JCN Shareholder
(including fractional shares) will be the same as the basis of all of
the shares of JCN Common Stock owned by such shareholder, decreased
by the amount of cash received by such shareholder, increased by any
amount that is treated as a dividend and further increased by any
amount of capital gain which is recognized by such shareholder
because of the Merger.
(iv) The holding period of the Highwoods Common received by a JCN
Shareholder will include the period during which the JCN Common
surrendered in exchange therefor was held.
(v) If a JCN Shareholder receives solely cash in exchange for shares of
JCN Common either because of an election to receive cash in the
Merger or because of the exercise of any right to dissent to the
Merger, such Shareholder will recognize gain or loss measured by the
difference between the amount of cash received and the adjusted basis
of the JCN Common surrendered.
(vi) A JCN Shareholder who receives cash in the Merger in lieu of a
fractional share interest in Highwoods Common will be treated as
having received cash in redemption of such fractional share interest
which should generally result in capital gain or loss equal to the
difference between the amount of cash received and the portion of
such JCN Shareholder's adjusted basis in the shares of JCN Common
allocable to the fractional share interest.
The opinions expressed herein are based upon existing statutory,
regulatory and judicial authority, any of which may be changed at any time with
retroactive effect.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement filed by Highwoods and to the reference to our firm
under the caption "Legal Matters" in the Proxy Statement/Prospectus included
therein.
Very truly yours,
/s/ BLACKWELL SANDERS PEPER MARTIN LLP
----------------------------------------
Blackwell Sanders Peper Martin LLP
HIGHWOODS PROPERTIES, INC.
OFFICER'S CERTIFICATE
Reference is hereby made to that certain Agreement and Plan of Merger (the
"Agreement") made and entered into as of December 22, 1997, which sets forth
the terms and conditions of the merger (the "Merger") of J.C. Nichols Company
("JCN"), a corporation organized under the laws of Missouri, with and into
Jackson Acquisition Corp. ("Merger Sub"), a corporation organized under the
laws of Maryland and a wholly-owned subsidiary of Highwoods Properties, Inc.
("Highwoods"), a corporation organized under the laws of Maryland. Capitalized
terms used herein without definition shall have the respective meanings
specified in the Agreement, and unless otherwise specified, all section
references herein are to the Internal Revenue Code of 1986, as amended (the
"Code").
The undersigned hereby certifies that he is a duly elected officer of
Highwoods and in such capacity has access to and knowledge of the information
contained herein, and that each of the following facts and representations are
true, correct, and complete, in all material respects, on the date hereof, and
such facts and representations will be true, correct, and complete, in all
material respects, on the effective date of the Merger (the "Effective Time").
The undersigned further certifies that he has reviewed the Registration
Statement on Form S-4 filed by Highwoods and the Proxy Statement/Prospectus
included therein (together, the "Proxy Statement"), is fully informed with
respect to the Merger, that all facts set forth in the Proxy Statement are true
and accurate, and that the proposed actions described in the Proxy Statement
will be consummated as described therein. The undersigned, on behalf of
Highwoods, submits this certificate to be relied upon by Alston & Bird LLP and
Blackwell Sanders Matheny Weary & Lombardi LLP in delivering their respective
tax opinions with respect to the tax consequences of the Merger.
1. The fair market value of the Highwoods Common Stock and other
consideration received by each shareholder of JCN will be approximately equal
to the fair market value of the JCN Common Stock surrendered in exchange
therefor.
2. Taking into account shares of JCN Common Stock exchanged for cash or
other property in the Merger and cash received in lieu of fractional shares of
Highwoods Common Stock, holders of the outstanding shares of JCN Common Stock
immediately prior to the Effective Time will receive in the Merger an amount of
Highwoods Common Stock with a value as of the Effective Time equal to at least
fifty percent (50%) of the total value of all shares of JCN Common Stock
outstanding immediately prior to the Effective Time. For purposes of this
representation, shares of JCN Common Stock held by former holders who receive
cash pursuant to the exercise of their rights of appraisal shall be treated as
outstanding immediately prior to the Effective Time.
3. Neither Highwoods nor Merger Sub has any plan or intention to sell,
transfer or otherwise dispose of any of the assets of JCN acquired in the
Merger, except for (i) dispositions made in the ordinary course of business,
and (ii) a transfer immediately after the Merger by Merger Sub of all of the
assets of JCN acquired in the Merger (the "JCN assets") to Highwoods pursuant
to the merger of Merger Sub with and into Highwoods, which merger qualifies as
a statutory merger under Maryland law, followed immediately by a contribution
by Highwoods of the JCN assets to Highwoods/Forsyth Limited Partnership, a
North Carolina limited partnership (the "Highwoods Operating Partnership") in
exchange for the number of the common partnership interests in the Highwoods
Operating Partnership (the "Common Units") equal to (a) the number of shares of
Highwoods Common Stock issued in the Merger and (b) the number of Common Units
obtained by dividing the cash component of the Merger consideration by the
value of a share of Highwoods Common Stock as of the Effective Time.
4. Following the Merger, either Highwoods, Merger Sub, or the Highwoods
Operating Partnership will use at least forty percent (40%) of JCN's historic
assets in a business.
5. Highwoods owns a 33.33% or greater interest in the Highwoods Operating
Partnership.
6. Highwoods and Merger Sub have paid and will pay their respective
expenses, if any, incurred in connection with the merger.
7. There is no intercorporate indebtedness existing between JCN and
Highwoods or between JCN and Merger Sub that was issued, acquired, or will be
settled at a discount.
8. None of the compensation received by any shareholder-employees of JCN
will be separate consideration for, or allocable to, any of their shares of JCN
Common Stock; none of the shares of Highwoods Common Stock received by any
shareholder-employees will be separate consideration for, or allocable to, any
employment agreement; and the compensation paid to any shareholder-employees of
JCN will be for services actually rendered, or to be rendered, or will arise
under certain change in control agreements that arise out of an employment
relationship between JCN and the shareholder-employees, which change in control
agreements are more fully described in the Proxy Statement/Prospectus filed by
JCN in connection with the Merger.
9. Merger Sub is not an investment company. For purposes hereof, an
"investment company" is a corporation that is a regulated investment company, a
real estate investment trust, or a corporation fifty percent (50%) or more of
the value of whose total assets are stock and securities and eighty percent
(80%) or more of the value of whose total assets are assets held for
investment. In making the fifty percent (50%) and eighty percent (80%)
determinations under the preceding sentence, stock and securities in any
subsidiary corporation shall be disregarded and the parent corporation shall be
deemed to own its ratable share of the subsidiary's assets, and a corporation
shall be considered a subsidiary if parent owns fifty percent (50%) or more of
the combined voting power of all classes of stock entitled to vote or fifty
percent (50%) or more of the total value of shares of all classes of stock
outstanding.
10. Although Highwoods is an investment company, Highwoods meets the
requirements of Section 368(A)(2)(F)(i) of the Code in that it is an real
estate investment trust.
11. None of (i) Highwoods, (ii) any member of Highwoods' affiliated group
as defined in Section 1504 of the Code without regard to Section 1504(b) of the
Code (including but not limited to Merger Sub) (iii) any corporation in which
at least fifty percent (50%) of the total combined voting power of all classes
of stock entitled to vote or at least fifty percent (50%) of the value of all
classes of stock is owned directly or indirectly by Highwoods, or (iv) any
entity that is treated as a partnership for federal income tax purposes and has
as an owner a corporation described in (i), (ii) or (iii) of this paragraph has
the intent to, at the time of the Merger, or shall, in a transaction that may
be considered in connection with the Merger, acquire or redeem (directly or
indirectly) any shares of Highwoods Common Stock issued in connection with the
Merger, except for repurchases by Highwoods of a small percentage of its stock
in the open market as part of an ongoing stock repurchase program not created
or modified in any way in connection with the Merger. For purposes hereof, an
entity described in (ii), (iii), or (iv) shall be referred to as a Highwoods
Related Party. An entity will be treated as a Highwoods Related Party if the
requisite relationship exists immediately before or immediately after the
acquisition or redemption. In addition, an entity (other than JCN or any JCN
Related Party) will be treated as a Highwoods Related Party if the requisite
relationship is created in connection with the Merger. A JCN Related Party
means any corporation in which at least fifty percent (50%) of the total
combined voting power of all classes of stock entitled to vote or at least
fifty percent (50%) of the value all classes of stock is owned directly or
indirectly by JCN.
12. None of Highwoods, Merger Sub or any other Highwoods Related Party has
at any time owned (directly or indirectly) any JCN stock during the three (3)
year period ending at the Effective Time.
13. Merger Sub has been newly formed as a Maryland corporation solely for
the purpose of the Merger and all of its stock has been since inception wholly
owned by Highwoods. Following the Merger, Merger Sub will not issue any
additional shares of its stock to any person other than Highwoods.
14. Following the Merger, at all times during the existence of Merger Sub,
Highwoods will not sell or otherwise transfer any of the shares of Merger Sub
that it owns, other than a transfer pursuant to the merger of Merger Sub with
and into Highwoods which occurs immediately after the Merger.
15. The payment of cash to shareholders of JCN in lieu of fractional
shares of Highwoods Common Stock will not be a separately bargained for
consideration, but will be undertaken solely for the purpose of avoiding the
expense and inconvenience of issuing and transferring fractional shares, and
the total cash consideration that will be paid to the JCN's shareholders in
lieu of fractional shares of Highwoods Common Stock will represent less than
one percent (1%) of the total consideration issued in the Merger.
16. The Agreement represents the entire understanding of JCN, Merger Sub
and Highwoods with respect to the Merger.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this 28th day of May, 1998.
HIGHWOODS PROPERTIES, INC.
CORPORATE SEAL By: /s/ MACK D. PRIDGEN, III
------------------------------------------------
Name: Mack D. Pridgen, III
-----------------------------------------------
Title: Vice President and General Counsel
----------------------------------------------
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J.C. NICHOLS COMPANY
OFFICER'S CERTIFICATE
Reference is hereby made to that certain Agreement and Plan of Merger (the
"Agreement") made and entered into as of December 22, 1997, which sets forth
the terms and conditions of the merger (the "Merger") of J.C. Nichols ("JCN"),
a corporation organized under the laws of Missouri, with and into Jackson
Acquisition Corp. ("Merger Sub"), a corporation organized under the laws of
Maryland and a wholly-owned subsidiary of Highwoods Properties, Inc.
("Highwoods"), a corporation organized under the laws of Maryland. Capitalized
terms used herein without definition shall have the respective meanings
specified in the Agreement, and unless otherwise specified, all section
references herein are to the Internal Revenue Code of 1986, as amended (the
"Code").
The undersigned hereby certifies that he is a duly elected officer of JCN
and in such capacity has access to and knowledge of the information contained
herein, and that each of the following facts and representations are true,
correct, and complete, in all material respects, on the date hereof, and such
facts and representations will be true, correct, and complete, in all material
respects, on the effective date of the Merger (the "Effective Time"). The
undersigned further certifies that he has reviewed the Registration Statement
on Form S-4 filed by Highwoods and the Proxy Statement/Prospectus included
therein (together, the "Proxy Statement"), is fully informed with respect to
the Merger, that all facts set forth in the Proxy Statement are true and
accurate, and that the proposed actions described in the Proxy Statement will
be consummated as described therein.The undersigned, on behalf of JCN, submits
this certificate to be relied upon by Alston & Bird LLP and Blackwell Sanders
Matheny Weary & Lombardi LLP in delivering their respective tax opinions with
respect to the tax consequences of the Merger.
1. The fair market value of the Highwoods Common Stock and cash received
by each shareholder of JCN will be approximately equal to the fair market value
of the JCN Common Stock surrendered in exchange therefor.
2. Other than cash paid to former shareholders of the JCN who dissent from
the Merger and perfect their rights of appraisal, neither JCN nor any
corporation in which at least fifty percent (50%) of the total combined voting
power of all classes of stock entitled to vote or at least fifty percent (50%)
of the value of all classes of stock is or was owned directly or indirectly by
JCN ("JCN Related Party") has redeemed or acquired any JCN stock prior to the
Merger in a transaction that may be considered in connection with the Merger,
except as set forth on the schedule attached hereto.
3. During the three (3) year period prior to the Merger, neither JCN nor
any JCN Related Party declared or paid any dividends with respect to the
outstanding JCN Common Stock.
4. The liabilities of JCN assumed in the Merger and the liabilities to
which the transferred assets of JCN are subject were incurred by JCN in the
ordinary course of its business.
5. JCN and the shareholders of JCN will pay their respective expenses, if
any, incurred in connection with the transaction.
6. There is no intercorporate indebtedness existing between JCN and
Highwoods or between JCN and Merger Sub that was issued, acquired, or will be
settled at a discount.
7. JCN is not under the jurisdiction of a court in a case under Title 11
of the United States Code or a receivership, foreclosure, or similar proceeding
in a federal or state court.
8. The fair market value of the assets of JCN to be transferred in the
Merger will equal or exceed the sum of the liabilities assumed in the Merger
plus the amount of the liabilities, if any, to which the transferred assets are
subject.
9. None of the compensation received, or to be received, by any
shareholder-employees of JCN will be separate consideration for, or allocable
to, any of their shares of JCN Common Stock; none of the shares of Highwoods
Common Stock received by any shareholder-employees will be separate
consideration for, or allocable to, any employment agreement; and the
compensation paid to any shareholder-employees of JCN will be for services
actually rendered, or to be rendered, and will be commensurate with amounts
paid to third parties bargaining at arm's length for similar services.
10. JCN is not an investment company. For purposes of the foregoing, an
"investment company" is a corporation that is a regulated investment company, a
real estate investment trust, or a corporation fifty percent (50%) or more of
the value of whose total assets are stock and securities and eighty percent
(80%) or more of the value of whose total assets are assets held for
investment. In making the fifty percent (50%) and eighty percent (80%)
determinations under the preceding sentence, stock and securities in any
subsidiary corporation shall be disregarded and the parent corporation shall be
deemed to
own its ratable share of the subsidiary's assets, and a corporation shall be
considered a subsidiary if the parent owns fifty percent (50%) or more of the
combined voting power of all classes of stock entitled to vote or fifty percent
(50%) or more of the total value of shares of all classes of stock outstanding.
11. The Agreement represents the entire understanding of JCN, Merger Sub
and Highwoods with respect to the Merger.
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this 21st day of May, 1998.
J.C. NICHOLS COMPANY
CORPORATE SEAL By: /s/ MARK A. PETERSON
------------------------------------------------
Name: Mark A. Peterson
----------------------------------------------
Title: Chief Financial Officer
---------------------------------------------
2
SCHEDULE
In December, 1997, J. C. Nichols redeemed 11,848 shares of common stock in
connection with the exercise of a stock option for 25,000 shares by an officer
of the Company. The shares redeemed were used to pay income taxes on behalf of
the officer.
3
Dates Referenced Herein and Documents Incorporated by Reference
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