1
EXHIBIT 8.3
PIPER & MARBURY
L.L.P.
▇▇▇▇▇▇▇ CENTER SOUTH
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ WASHINGTON
FAX: ▇▇▇-▇▇▇-▇▇▇▇ NEW YORK
PHILADELPHIA
EASTON
September 4, 1998
Merry Land & Investment Company, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Agreement and Plan of Merger (the "Merger Agreement"), dated
as of July 8, 1998, by and between Merry Land & Investment
Company, Inc. and Equity Residential Properties Trust
Ladies and Gentlemen:
We have acted as special counsel to Merry Land & Investment Company,
Inc. ("Merry Land") in connection with the transactions contemplated by the
Agreement and Plan of Merger, dated as of July 8, 1998, by and between Merry
Land and Equity Residential Properties Trust ("EQR"), as amended (the "Merger
Agreement"). This opinion is delivered on the effective date of a Registration
Statement on Form S-4 (the "Registration Statement"), which includes the
definitive Joint Proxy Statement/Prospectus/Information Statement of EQR and
Merry Land dated September 4, 1998 (the "Proxy Statement/Prospectus"), with
respect to the transactions contemplated by the Merger Agreement. The delivery
of a letter expressing opinions in substantially the form hereof, and the
reconfirmation of such opinions on and as of the Effective Time (or the ML/LLC
Merger and Merry Land Merger Subsidiary/EQR Merger Effective Times, if
applicable), are conditions to the obligations of Merry Land to consummate the
Merger pursuant to section 6.3(f) of the Merger Agreement. All capitalized terms
used herein, unless otherwise specified, shall have the meanings ascribed to
them in the Merger Agreement.
The Merger Agreement provides that, as of the Closing Date, Merry Land
will merge with and into EQR (the "Merger"). The Merger Agreement further
provides, however, that, if the Internal Revenue Service (the "Service") issues
the private letter ruling described below, EQR may elect prior to the Closing
Date to consummate the transaction in accordance with the following "Alternative
Structure": (i) Merry Land will merge with and into Merry Land LLC, a Delaware
limited liability company all of the membership interests in which are owned by
Merry Land Merger Subsidiary, Inc. ("ML Sub"), a Maryland corporation which is a
newly formed wholly owned subsidiary of Merry
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Merry Land & Investment Company, Inc.
September 4, 1998
Page 2
Land (the "Reincorporation Merger") and (ii) immediately thereafter, ML Sub will
merge with and into EQR (the "Acquisition Merger"). The private letter ruling
will satisfy the conditions for implementing the Reincorporation Merger and the
Acquisition Merger (in lieu of the Merger) only if it provides that (1) certain
preliminary distributions by Merry Land to its stockholders (the "Target
Distribution"), the Acquisition Merger and a certain post-closing combination of
two partnerships substantially owned respectively by Merry Land and EQR (the
"Acquiring Partnership Transaction") will have no effect on the qualification of
the Reincorporation Merger as a reorganization under Section 368(a)(1)(F) of the
Internal Revenue Code and (2) the Target Distribution, the Reincorporation
Merger and the Acquiring Partnership Transaction will have no effect on the
qualification of the Acquisition Merger as a reorganization under Section
368(a)(1)(A) of the Internal Revenue Code. A private letter ruling conforming to
the requirements specified in the preceding sentence without any material
qualifications or conditions shall hereinafter by referred to as a "Qualifying
Ruling".
In rendering our opinions, we have examined and relied upon the
accuracy and completeness of the information, covenants and representations of a
factual nature contained in originals or copies, certified or otherwise
identified to our satisfaction, of the Merger Agreement, the Proxy
Statement/Prospectus and such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below. Our opinions assume,
among other things, the accuracy as of the date hereof, and the accuracy as of
the Effective Time (or the ML/LLC Merger and Merry Land Merger Subsidiary/EQR
Merger Effective Times, if applicable), of such information, covenants,
statements and representations of a factual nature, as well as an absence of any
change in the foregoing that are material to such opinions between the date
hereof and the Effective Time (or the ML/LLC Merger and Merry Land Merger
Subsidiary/EQR Merger Effective Times, if applicable).
We have assumed the genuineness of all signatures, the legal capacity
of all natural persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to us
as certified or photostatic copies and the authenticity of the originals of such
documents. We have also assumed that the transactions related to the Merger (or,
if consummated in lieu of the Merger, the Alternative Structure) or contemplated
by the Merger Agreement that are to be consummated at the Effective Time (or the
ML/LLC Merger and Merry Land Merger Subsidiary/EQR Merger Effective Times, if
applicable) will be consummated at the Effective Time (or the ML/LLC Merger and
Merry Land Merger Subsidiary/EQR Merger Effective Times, if applicable) in
accordance with the Merger Agreement and as described in the Proxy
Statement/Prospectus. In addition, our opinions are expressly conditioned on,
among other things, the accuracy as of the date hereof, and the accuracy as of
the Effective Time (or the ML/LLC Merger and Merry Land Merger Subsidiary/EQR
Merger Effective Times, if applicable), of statements and representations
contained in both (i) the certificate executed by an officer of Merry Land,
dated September 4, 1998, attached hereto as Exhibit A and (ii) the certificate
executed by an officer of EQR, dated September 4, 1998, attached hereto as
Exhibit B,
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Merry Land & Investment Company, Inc.
September 4, 1998
Page 3
as to certain facts relating to, and knowledge and intentions of, EQR and Merry
Land, and certain facts relating to the Merger. We have assumed that such
statements and representations will be reconfirmed as of the Effective Time (or
the ML/LLC Merger and Merry Land Merger Subsidiary/EQR Merger Effective Times,
if applicable). In addition, we have relied upon the opinions of (i) Hull,
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C. that, commencing with its taxable year ended
December 31, 1987, Merry Land was organized and has operated in conformity with
the requirements for qualification as a real estate investment trust within the
meaning of Section 856(a) of the Code and (ii) ▇▇▇▇▇▇▇ & ▇▇▇▇▇ that, commencing
with its taxable year ended December 31, 1992, EQR was organized and has
operated in conformity with the requirements for qualification as a real estate
investment trust within the meaning of Section 856(a) of the Code.
In rendering our opinion, we have considered the applicable provisions
of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations promulgated thereunder by the Treasury Department (the
"Regulations"), pertinent judicial authorities, rulings of the U.S. Internal
Revenue Service and such other authorities as we have considered relevant. It
should be noted that the Code, the Regulations, judicial decisions,
administrative interpretations and such other authorities are subject to change
at any time and, in some circumstances, with retroactive effect. A material
change in any of the authorities upon which our opinions are based could affect
our conclusions stated herein. In addition, there can be no assurance that the
Internal Revenue Service would not take a position contrary to that which is
stated in this opinion letter.
Based upon and subject to the foregoing, we are of the opinion that,
for United States federal income tax purposes:
1. the Merger, if consummated, will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and Merry Land and EQR will
each be a party to such reorganization within the meaning of Section 368(b) of
the Code;
2. if a Qualifying Ruling is issued and EQR elects to implement the
Alternative Structure in accordance with the terms and conditions of the Merger
Agreement, the Reincorporation Merger will constitute a "reorganization" within
the meaning of Section 368(a)(1)(F) of the Code, and Merry Land and ML Sub will
each be a party to such reorganization within the meaning of Section 368(b) of
the Code;
3. if a Qualifying Ruling is issued and EQR elects to implement the
Alternative Structure in accordance with the terms and conditions of the Merger
Agreement, the Acquisition Merger will constitute a "reorganization" within the
meaning of Section 368(a)(1)(A) of the Code, and ML Sub and EQR will each be a
party to such reorganization within the meaning of Section 368(b) of the Code;
and
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Merry Land & Investment Company, Inc.
September 4, 1998
Page 4
4. the summaries of Federal income tax consequences set forth in the
Proxy Statement/Prospectus under the headings "Summary - Federal Income Tax
Consequences of the Merger", "MRYP Newco Risk Factors - Taxable Nature of the
MRYP Newco Common Distribution", "The Merger - Federal Income Tax Consequences
of the Merger", "The Merger - Qualification of EQR as a REIT", "The Merger -
Federal Income Tax Consequences of the Alternative Merger Transactions", "Merry
Land Properties, Inc - Description of Contribution and Distribution", "Merry
Land Properties, Inc. - MRYP Newco - Federal Income Tax Consequences", and
"Proposal to Approve MRYP Newco's 1998 Management Incentive Plan" are accurate
in all material respects as to matters of law and legal conclusions.
Except as set forth above, we express no opinion to any party as to any
consequences of the Merger or any transactions related thereto. We are
furnishing this opinion to you solely in connection with the effectiveness of
the Registration Statement, and it is not to be used, relied upon, circulated,
quoted or otherwise referred to by any other person (other than Merry Land
shareholders) for any other purpose without our prior written consent. In
accordance with the requirements of Item 601(b)(23) of Regulation S-K under the
Securities Act, we hereby consent to the use of our name in the Proxy
Statement/Prospectus and to the filing of this opinion as an Exhibit to the
Registration Statement. This opinion is expressed as of the date hereof, and we
disclaim any undertaking to advise you of any subsequent changes of the matters
stated, represented or assumed herein or any subsequent changes in applicable
law.
Very truly yours,
/s/ Piper & Marbury, L.L.P.
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EXHIBIT A
6
MERRY LAND & INVESTMENT COMPANY, INC.
TAX OPINION CERTIFICATE
This Certificate is being issued to ▇▇▇▇▇▇▇ & ▇▇▇▇▇ and ▇▇▇▇▇ &
▇▇▇▇▇▇▇, L.L.P. in connection with the rendering of their respective opinions
regarding certain federal income tax consequences of a merger pursuant to the
Agreement and Plan of Merger, dated as of July 8, 1998, as amended (the "Merger
Agreement"), by and between Equity Residential Properties Trust, a Maryland real
estate investment trust ("EQR"), Merry Land & Investment Company, Inc., a
Georgia corporation ("Merry Land"), providing, among other things, for the
merger of Merry Land with and into EQR (the "Merger") or, in the alternative,
the merger of Merry Land with and into Merry Land LLC, a Delaware limited
liability company all of the membership interests in which will be owned by
Merry Land Merger Subsidiary, Inc. ("ML Sub"), a Maryland corporation which will
be a newly formed wholly owned subsidiary of Merry Land (the "Reincorporation
Merger") immediately followed by the merger of ML Sub with and into EQR (the
"Acquisition Merger"). The Merger Agreement provides, in effect, that the Merger
will be implemented unless the Internal Revenue Service (the "Service") issues a
private letter ruling to the effect that (1) certain preliminary distributions
by Merry Land to its stockholders (the "Target Distribution"), the Acquisition
Merger and a certain post-closing combination of two partnerships substantially
owned respectively by Merry Land and EQR (the "Acquiring Partnership
Transaction") will have no effect on the qualification of the Reincorporation
Merger as a reorganization under Section 368(a)(1)(F) of the Internal Revenue
Code and (2) the Target Distribution, the Reincorporation Merger and the
Acquiring Partnership Transaction will have no effect on the qualification of
the Acquisition Merger as a reorganization under Section 368(a)(1)(A) of the
Internal Revenue Code. If the Service issues such a ruling, EQR with the consent
of Merry Land, which consent may not be unreasonably withheld, may elect to
implement the Reincorporation Merger and the Acquisition Merger in lieu of the
Merger. As used herein, "EQR Stock" shall mean any shares of beneficial interest
of EQR classified as common shares or as any one of the several classes of
preferred shares that EQR is authorized to issue. Any capitalized terms used
herein that are not defined herein shall have the meanings assigned to them in
the Merger Agreement.
I. THE MERGER
After consulting with its counsel and auditors regarding the meaning of
and factual support for the following representations, the undersigned hereby
certifies and represents to ▇▇▇▇▇▇▇ & ▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. with
respect to the Merger that the following facts are now true and will continue to
be true through and as of the Effective Time:
(a) The fair market value of the EQR Stock received by each Merry Land
shareholder will be approximately equal to the fair market value of the Merry
Land stock surrendered by that Merry Land shareholder in the Merger.
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(b) To the best of the knowledge of the undersigned and Merry Land,
there is no plan or intention on the part of the stockholders of Merry Land,
directly or indirectly, to sell, exchange, transfer, or otherwise dispose of, to
EQR or any person related to EQR within the meaning of Section 1.368-1(e)(3) of
the Treasury regulations any shares of EQR Stock received in the Merger other
than shares of EQR Stock exchanged for cash in lieu of fractional shares of EQR
Stock.
(c) The liabilities of Merry Land assumed in the Merger and the
liabilities to which the transferred assets of Merry Land are subject were
incurred by Merry Land in the ordinary course of its business.
(d) Merry Land and the shareholders of Merry Land will pay their
respective expenses, if any, incurred in connection with the Merger and, except
to the extent indicated in the following sentence, none of such expenses will be
assumed or paid by EQR. EQR will assume or pay only those expenses of Merry Land
that are solely and directly related to the Merger in accordance with the
guidelines established by Revenue Ruling 73-54.
(e) There is no intercorporate indebtedness existing between Merry Land
and EQR that was issued, acquired, or will be settled at a discount.
(f) Merry Land has in effect a valid election to be a real estate
investment trust and such election shall remain in effect at all times through
and including the Effective Time. Merry Land satisfies all of the requirements
necessary to qualify as a real estate investment trust within the meaning of
Section 856(a) of the Code and Merry Land shall continue to satisfy all of such
requirements at all times through and including the Effective Time.
(g) Merry Land is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of section 368(a)(3)(A) of the Internal
Revenue Code.
(h) The fair market value of the assets of Merry Land transferred to
EQR will equal or exceed the sum of the liabilities assumed plus the amount of
liabilities, if any, to which the transferred assets are subject.
(i) The payment of cash in lieu of fractional shares of EQR Stock is
solely for the purpose of avoiding the expense and inconvenience to EQR of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the Merger to
the Merry Land shareholders instead of issuing fractional shares of EQR Stock
will not exceed one percent of the total consideration that will be issued in
the Merger to the Merry Land shareholders in exchange for their shares of Merry
Land stock. The fractional share interests of each Merry Land shareholder will
be aggregated, and no Merry Land shareholder will receive cash in an amount
equal to or greater than the value of one full share of EQR Stock.
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(j) None of the compensation received by a shareholder-employee of
Merry Land will be separate consideration for, or allocable to, any of the
shareholder-employee's shares of Merry Land stock; none of the shares of EQR
Stock received by the shareholder-employee will be separate consideration for,
or allocable to, any employment agreement; and the compensation paid to the
shareholder-employee will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's length for
similar services.
II. THE REINCORPORATION MERGER
After consulting with its counsel and auditors regarding the meaning of
and factual support for the following representations, the undersigned hereby
certifies and represents to ▇▇▇▇▇▇▇ & ▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. with
respect to the Reincorporation Merger that the following facts are now true and
will continue to be true through and as of the Effective Time:
(a) The fair market value of the ML Sub stock to be received by each
shareholder in the Reincorporation Merger will be, in each instance, equal to
the fair market value of the Merry Land stock surrendered in exchange therefor.
(b) To the best of the knowledge of the undersigned and Merry Land,
there is no plan or intention by the holders of shares of stock of Merry Land
to sell, exchange or otherwise dispose of any of the share of stock of ML Sub
received in the Merger other than pursuant to the Acquisition Merger.
(c) No consideration other than ML Sub Shares will be issued in
exchange for shares of stock of Merry Land in the Reincorporation Merger.
(d) ML Sub has no plan or intention to redeem or otherwise reacquire
any of the ML Sub Shares to be issued in the Reincorporation Merger.
(e) Immediately following the consummation of the Reincorporation
Merger, the holders of shares of stock of Merry Land will own all of the
outstanding shares of stock of ML Sub and will own such shares solely by reason
of their ownership of the outstanding shares of stock of Merry Land immediately
prior to the Reincorporation Merger.
(f) Immediately following consummation of the Reincorporation Merger,
ML Sub (through Merry Land LLC) will possess the same assets and liabilities
as those possessed by Merry Land immediately prior to the Reincorporation
Merger. All redemptions and distributions (other than the Target Distribution)
made by Merry Land immediately preceding the Reincorporation Merger will, in
the aggregate, constitute less than one percent of the net assets of Merry Land.
(g) ML Sub has no plan or intention to sell or otherwise dispose of any
of the Merry Land assets to be acquired by it in the Reincorporation Merger
except for dispositions pursuant to the Acquisition Merger.
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(h) Except for the fact that ML Sub will merge into EQR in the
Acquisition Merger, following the Reincorporation Merger, ML Sub will continue
the historic business of the Merry Land in a substantially unchanged manner.
(i) There is no intercorporate indebtedness existing between Merry Land
and ML Sub that was issued, acquired, or that will be settled at a discount.
(j) Merry Land has in effect a valid election to be a real estate
investment trust and such election shall remain in effect at all times through
and including the Effective Time. Merry Land satisfies all of the requirements
necessary to qualify as a real estate investment trust within the meaning of
Section 856(a) of the Code and Merry Land shall continue to satisfy all of such
requirements at all times through and including the Effective Time.
Immediately after the consummation of the Reincorporation Merger, ML Sub will
satisfy all of the requirements necessary to qualify as a real estate
investment trust within the meaning of Section 856(a) of the Code.
(k) ML Sub is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
(l) ML Sub does not expect to issue additional shares of its stock.
(m) ML Sub will not pay any expenses incurred in connection with the
Reincorporation Merger by holders of shares of stock or beneficial interest of
Merry Land.
(n) ML Sub was organized solely for the purpose participating in the
Reincorporation Merger and has never carried on a business.
III. THE ACQUISITION MERGER
After consulting with its counsel and auditors regarding the meaning of
and factual support for the following representations, the undersigned hereby
certifies and represents to ▇▇▇▇▇▇▇ & ▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. with
respect to the Acquisition Merger that the following facts are now true and will
continue to be true through and as of the Effective Time:
(a) The fair market value of the EQR Stock received by each ML Sub
shareholder will be approximately equal to the fair market value of the ML Sub
stock surrendered by that ML Sub shareholder in the Acquisition Merger.
(b) To the best of the knowledge of the undersigned and ML Sub, there
is no plan or intention on the part of the stockholders of ML Sub, directly or
indirectly, to sell, exchange, transfer, or otherwise dispose of, to EQR or any
person related to EQR within the meaning of Section 1.368-1(e)(3) of the
Treasury regulations any shares of EQR
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Stock received in the Merger other than shares of EQR Stock exchanged for cash
in lieu of fractional shares of EQR Stock.
(c) The liabilities of ML Sub assumed in the Merger and the liabilities
to which the transferred assets of ML Sub are subject were incurred by ML Sub in
the ordinary course of its business.
(d) ML Sub and the shareholders of ML Sub will pay their respective
expenses, if any, incurred in connection with the Merger and, except to the
extent indicated in the following sentence, none of such expenses will be
assumed or paid by EQR. EQR will assume or pay only those expenses of ML Sub
that are solely and directly related to the Acquisition Merger in accordance
with the guidelines established by Revenue Ruling 73-54.
(e) There is no intercorporate indebtedness existing between ML Sub and
EQR that was issued, acquired, or will be settled at a discount.
(f) Immediately prior to the consummation of the Acquisition Merger,
ML Sub will satisfy all of the requirements necessary to qualify as a real
estate investment trust within the meaning of Section 856(a) of the Code.
(g) ML Sub is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A) of the Internal Revenue
Code.
(h) The fair market value of the assets of ML Sub transferred to EQR
will equal or exceed the sum of the liabilities assumed plus the amount of
liabilities, if any, to which the transferred assets are subject.
(i) The payment of cash in lieu of fractional shares of EQR Stock is
solely for the purpose of avoiding the expense and inconvenience to EQR of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the Merger to
the ML Sub shareholders instead of issuing fractional shares of EQR Stock will
not exceed one percent of the total consideration that will be issued in the
Merger to the ML Sub shareholders in exchange for their shares of ML Sub stock.
The fractional share interests of each ML Sub shareholder will be aggregated,
and no ML Sub shareholder will receive cash in an amount equal to or greater
than the value of one full share of EQR Stock.
(j) None of the compensation received by a shareholder-employee of ML
Sub will be separate consideration for, or allocable to, any of the
shareholder-employee's shares of ML Sub stock; none of the shares of EQR Stock
received by the shareholder-employee will be separate consideration for, or
allocable to, any employment agreement; and the compensation paid to the
shareholder-employee will be for services actually
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rendered and will be commensurate with amounts paid to third parties bargaining
at arm's length for similar services.
The undersigned recognizes that the respective opinions of ▇▇▇▇▇▇▇ &
▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. will be (i) based on the representations set
forth herein and on the statements contained in the Merger Agreement and
documents related thereto, and (ii) subject to certain limitations and
qualifications including that it may not be relied upon if any such
representations are not accurate in all material respects.
The undersigned recognizes that the respective opinions of ▇▇▇▇▇▇▇ &
▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. will not address any tax consequences of the
reorganizations or any action taken in connection therewith except as expressly
set forth in such opinion.
In witness whereof, the undersigned has executed this Certificate this
4th day of September, 1998.
MERRY LAND & INVESTMENT COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
(type or print name)
Title: Vice President and
-------------------------
Chief Financial Officer
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EXHIBIT B
13
EQUITY RESIDENTIAL PROPERTIES TRUST
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
September 4, 1998
▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Tax Opinion for Merger - Officer's Certificate
Ladies and Gentlemen:
In connection with the merger of Merry Land & Investment, Company,
Inc., a Georgia corporation ("Merry Land"), with and into Equity Residential
Properties Trust, a Maryland real estate investment trust ("EQR"), pursuant to
the Joint Proxy Statement/Prospectus/Information Statement included in the
Registration Statement on Form S-4 (File No. 333-61449), filed with the
Securities and Exchange Commission, as amended (the "Registration Statement"),
and certain related transactions, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, as special counsel for EQR,
and Piper & Marbury L.L.P., as special counsel for Merry Land, have each been
requested to render an opinion concerning certain federal income tax
consequences of (i) the proposed merger (the "Merger") of Merry Land with and
into EQR and/or (ii) if consummated in lieu of the Merger, the Alternative
Merger Transactions (as defined in the Registration Statement).
Unless otherwise specifically defined herein, all capitalized terms
have the meaning assigned to them in the Registration Statement.
The Merger will be consummated pursuant to (i) an Agreement and Plan of
Merger, dated as of July 8, 1998, by and between Merry Land and EQR, as amended
by that certain First Amendment to the Merger Agreement (the "Merger
Agreement"); (ii) the Articles of Merger, by and between Merry Land and EQR,
entered into in connection therewith (the "Articles of Merger"); and (iii) the
Certificate of Merger, by and between Merry Land and EQR, entered into in
connection with the Merger Agreement (the "Certificate of Merger").
As more fully described in the Registration Statement, EQR, with the
consent of Merry Land, which consent may not be unreasonably withheld, may elect
to effect the transactions contemplated by the Merger through an alternative
series of transactions (as defined in the Registration Statement, the
"Alternative Merger Transactions"), upon receipt of a favorable private letter
ruling from the
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September 4, 1998
Page 2
Internal Revenue Service reasonably acceptable to counsel for EQR and Merry
Land with respect to the tax-free nature of the Alternative Merger Transactions.
If consummated in lieu of the Merger, the Alternative Merger
Transactions will be consummated pursuant to (i) the Merger Agreement, (ii) the
Certificate of Merger, by and between Merry Land LLC and Merry Land Merger
Subsidiary, entered into in connection with the Merger Agreement and (iii) the
Articles of Merger by and between EQR and Merry Land Merger Subsidiary, entered
into in connection with the Merger Agreement.
In connection with the issuance of your legal opinion as described
above, EQR, on behalf of itself and ERP Operating Partnership, hereby makes the
following representations (intending that ▇▇▇▇▇▇▇ & ▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇▇▇
L.L.P. will rely on such representations in rendering their opinions), each of
which will be true as of the Effective Time of the Merger (or if the Alternative
Merger Transactions are consummated, the effective time of the Alternative
Merger Transactions) and thereafter, where relevant:
1. The Merger (or if consummated in lieu of the Merger, the Alternative
Merger Transactions) is (are) being effected for bona fide business reasons as
described in the Joint Proxy Statement/Prospectus/Information Statement.
2. In the event the Merger is consummated, the fair market value of the
EQR Shares received by each holder of Merry Land Shares will be approximately
equal to the fair market value of the Merry Land Shares surrendered in the
exchange.
3. In the event the Alternative Merger Transactions are consummated,
the fair market value of the EQR Shares received by each holder of Merry Land
Merger Subsidiary Shares will be approximately equal to the fair market value of
the Merry Land Merger Subsidiary Shares surrendered in the exchange.
4. EQR has no plan or intention to reacquire any of the EQR Common to
be issued in the Merger (or if consummated in lieu of the Merger, the
Alternative Merger Transactions).
5. EQR has no plan or intention to sell or otherwise dispose of any of
the assets acquired in the Merger (or if consummated in lieu of the Merger, the
Alternative Merger Transactions) except for (i) dispositions made in the
ordinary course of business and (ii) any contribution to ERP Operating
Partnership and/or any Subsidiary Entities by EQR and/or any of the Subsidiary
Entities
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September 4, 1998
Page 3
of any assets, including, but not limited to, any assets acquired by such
entities pursuant to the Merger (or if consummated in lieu of the Merger,
the Alternative Merger Transactions).
6. In the event the Merger is consummated, following the Merger, EQR
will continue the historic business of Merry Land and will use a significant
portion of Merry Land's historic business assets in a business.
7. In the event the Alternative Merger Transactions are consummated,
following the Alternative Merger Transactions, EQR will continue the historic
business of Merry Land (and Merry Land Merger Subsidiary) and will use a
significant portion of Merry Land's (and Merry Land Merger Subsidiary's)
historic business assets in a business.
8. In the event the Merger is consummated, EQR and the shareholders of
EQR will pay their respective expenses incurred in connection with the Merger,
and will not pay the expenses of Merry Land or the Merry Land shareholders,
except for those expenses of Merry Land that are solely and directly related to
the Merger in accordance with the guidelines established in Revenue Ruling
73-54, 1973-1 C.B. 187.
9. In the event the Alternative Merger Transactions are consummated,
EQR and the shareholders of EQR will pay their respective expenses incurred in
connection with the Alternative Merger Transactions, and will not pay the
expenses of (i) Merry Land or the Merry Land shareholders or (ii) Merry Land
Merger Subsidiary or the Merry Land Merger Subsidiary shareholders, except for
those expenses of Merry Land and/or Merry Land Merger Subsidiary that are solely
and directly related to the Alternative Merger Transactions in accordance with
the guidelines established in Revenue Ruling 73-54, 1973-1 C.B. 187.
10. There is no intercorporate indebtedness existing between EQR and
Merry Land that was issued, acquired or will be settled at a discount.
11. There is no intercorporate indebtedness existing between EQR and
Merry Land Merger Subsidiary that was issued, acquired or will be settled at a
discount.
12. Although EQR is an "investment company," as defined in Code
Sections 368(a)(2)(F)(iii) and (iv), EQR is also a real estate investment trust,
as defined in Code Section 856(a), described in Code Section 368(a)(2)(F)(i).
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September 4, 1998
Page 4
13. EQR is not under the jurisdiction of a court in a title 11 or
similar case within the meaning of Code Section 368(a)(3)(A).
14. None of the compensation received by any shareholder-employee of
EQR will be separate consideration for, or allocable to, any of his or her EQR
Common or EQR Preferred. The compensation paid to any shareholder-employee of
EQR will be for services actually rendered and will be commensurate with amounts
paid to third parties bargaining at arm's length for similar services. None of
the EQR Common or EQR Preferred received by any shareholder-employee of EQR will
be in exchange for, or in consideration of, services rendered to EQR or any
other entity by such shareholder-employee.
15. In the event the Merger is consummated, the payment of cash in lieu
of fractional shares of EQR Common in connection with the Merger is solely for
the purpose of avoiding the expense and inconvenience to EQR of issuing
fractional shares and does not represent separately bargained-for consideration.
The total cash consideration that will be paid in the Merger to Merry Land
shareholders in lieu of issuing fractional shares of EQR Common will not exceed
one percent of the total consideration that will be issued in the Merger to the
holders of Merry Land Common in exchange for their Merry Land Common. The
fractional share interests of each holder of Merry Land Common will be
aggregated, and no holder of Merry Land Common will receive cash in an amount
greater than the value of one share of Merry Land Common.
16. In the event the Alternative Merger Transactions are consummated,
the payment of cash in lieu of fractional shares of EQR Common in connection
with the Merry Land Merger Subsidiary/EQR Merger is solely for the purpose of
avoiding the expense and inconvenience to EQR of issuing fractional shares and
does not represent separately bargained-for consideration. The total cash
consideration that will be paid in the Merry Land Merger Subsidiary/EQR Merger
to Merry Land Merger Subsidiary shareholders in lieu of issuing fractional
shares of EQR Common will not exceed one percent of the total consideration that
will be issued in the Merry Land Merger Subsidiary/EQR Merger to the holders of
Merry Land Merger Subsidiary Common in exchange for their Merry Land Merger
Subsidiary Common. The fractional share interests of each holder of Merry Land
Merger Subsidiary Common will be aggregated, and no holder of Merry Land Merger
Subsidiary Common will receive cash in an amount greater than the value of one
share of Merry Land Merger Subsidiary Common.
17. The principal purpose of EQR's assumption of liabilities and/or
acquisition of properties subject to liabilities in connection with the Merger
(or if consummated in lieu of the Merger, the Alternative Merger Transactions)
is not to avoid federal income tax, and EQR has a
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September 4, 1998
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valid business purpose for assuming any liabilities and/or acquiring properties
subject to liabilities in connection with the Merger (or if consummated in lieu
of the Merger, the Alternative Merger Transactions).
18. EQR has the corporate power and authority to make all of the
representations contained herein.
EQUITY RESIDENTIAL PROPERTIES TRUST,
a Maryland real estate investment trust
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Executive Vice President
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