<PAGE>
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
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Date of Report (Date of earliest event reported): March 8, 1995
Merry Land & Investment Company, Inc.
(Exact name of registrant as specified in its charter)
Georgia 0-10384
(State or other jurisdiction of incorporation) (Commission File Number)
58-0961876
(I.R.S. Employer I.D. Number)
624 Ellis Street, Augusta, Georgia 30901
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 706/722-6756
____________________________________________________________
(Former name or former address, if changed since last report)
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Filed: March 13, 1995
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ITEM 5. OTHER EVENTS. Merry Land & Investment Company, Inc. (the
"Company") has completed the offering of its $2.15 Series C Cumulative
Convertible Preferred Stock (the "Series C Preferred Stock"). The offering
of the Series C Preferred Stock was made pursuant to a Prospectus
Supplement dated March 8, 1995 relating to the Prospectus dated February
10, 1995 filed with the Company's shelf registration statement #33-57453 on
Form S-3.
Dividends on the shares of Series C Preferred Stock will be cumulative
from the date of original issue and will be payable quarterly in arrears on
the last day of March, June, September and December of each year in an
amount per share equal to the greater of $2.15 per annum or the cash
dividends (determined on each of the quarterly dividend payment dates
referred to above) on the number of shares of common stock, no par value
(the "Common Stock"), or portion thereof, into which a share of Series C
Preferred Stock is convertible. The first record date for determination of
shareholders entitled to receive dividends on the Series C Preferred Stock
is expected to be June 15, 1995.
Shares of Series C Preferred Stock are convertible at any time at the
option of the holders thereof into shares of Common Stock at a conversion
price of $22.00 per share of Common Stock (equivalent to a conversion rate
of 1.136 shares of Common Stock for each share of Series C Preferred
Stock), subject to adjustment in certain circumstances.
The Series C Preferred Stock is not redeemable prior to March 31, 2000
and at no time will the Series C Preferred Stock be redeemable for cash. On
and after March 31, 2000 the Series C Preferred Stock will be redeemable,
in whole or in part, at the option of the Company, for such number of
shares of Common Stock as are issuable at a conversion rate of 1.136 shares
of Common Stock for each share of Series C Preferred Stock, subject to
adjustment in certain circumstances. The Company may exercise this option
only if for 20 trading days within any period of 30 consecutive trading
days, including the last trading day of such period, the closing price of
the Common Stock on the New York Stock Exchange (the "NYSE") equals or
exceeds the conversion price per share, subject to adjustment in certain
circumstances. The Series C Preferred Stock will not be entitled to the
benefit of any sinking fund.
The shares of Series C Preferred Stock have been approved for listing
on the NYSE under the symbol "MRYPrC."
The net proceeds to the Company from the sale of the shares of the
Series C Preferred Stock are estimated at approximately $95.8 million
($110.2 million if the Underwriters' over-allotment option is exercised in
full). The Company intends to use approximately $57.6 million to repay
unsecured floating rate debt under its line of credit which has been
incurred to acquire apartment properties. The interest on such
indebtedness accrues at the rate of 0.65% above the thirty day London
Interbank Offered Rate and the maturity date on such indebtedness is
September 30, 1995. In addition, the Company intends to repay up to $17.4
million of indebtedness consisting of daily repurchase agreements bearing
interest at rates adjusted daily. The Company intends to use the remaining
net proceeds to acquire and develop additional apartment properties.
Pending such uses, the Company intends to invest temporarily the excess
proceeds in interest bearing securities.
It is expected that delivery of the shares of Series C Preferred Stock
will be made at the offices of Alex. Brown & Sons Incorporated, Baltimore,
Maryland, on or about March 15, 1995.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS. The Company is filing with this current report copies of the
following documents in connection with this Offering.
A. EXHIBIT 1: Underwriting Agreement.
B. EXHIBIT 4: Articles of Amendment to Articles of Incorporation
(incorporated herein by reference to Exhibit 3 of
the Company's form 8-A/A filed March 10, 1995)
C. EXHIBIT 5: Opinion as to the legality of the shares.
D. EXHIBIT 8: Tax Opinion.
E. EXHIBIT 12: Statement regarding computation of ratios
(incorporated herein by reference to Exhibit 12 of
the Company's 1994 10-K filed March 8, 1995)
F. EXHIBIT 23: Consent of Hull, Towill, Norman & Barrett, P.C.
(contained in Exhibits 5 and 8)
G. EXHIBIT 27: Financial Data Schedule (incorporated herein by
reference to Exhibit 27 of the Company's 1994 10-K
filed March 8, 1995)
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Signature Blocks on Following Page
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Merry Land & Investment
Company, Inc.
(Registrant)
By: /s/
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W. Tennent Houston
As Its President
<PAGE>
4,000,000 Shares
Merry Land & Investment Company, Inc.
Series C Preferred Stock
(Without Par Value)
UNDERWRITING AGREEMENT
---------------------
March 8, 1995
ALEX. BROWN & SONS INCORPORATED
GOLDMAN, SACHS & CO.
PAINEWEBBER INCORPORATED
INTERSTATE/JOHNSON LANE CORPORATION
c/o Alex. Brown & Sons Incorporated
135 East Baltimore Street
Baltimore, Maryland 21202
Gentlemen:
Merry Land & Investment Company, Inc., a Georgia corporation (the
"Company"), proposes to sell to you (herein referred to as the
"Underwriters" or the "Representatives") an aggregate of 4,000,000 shares
of the Company's Series C Preferred Stock, without par value (the "Firm
Shares"). The respective amounts of the Firm Shares to be so purchased by
the several Underwriters are set forth opposite their names in Schedule I
hereto. The Company also proposes to sell at the Underwriters' option an
aggregate of up to 600,000 additional shares of the Company's Series C
Preferred Stock (the "Option Shares") as set forth below.
You have advised the Company (a) that you are authorized to enter
into this Agreement, and (b) that the several Underwriters are willing, acting
severally and not jointly, to purchase the numbers of Firm Shares set forth
opposite their respective names in Schedule I, plus their pro rata portion
of the Option Shares if you elect to exercise the over-allotment option in
whole or in part for the accounts of the several Underwriters. The Firm
Shares and the Option Shares (to the extent the aforementioned option is
exercised) are herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the
parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants as follows:
A registration statement on Form S-3 (File No. 33-57453) with
respect to the Shares has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and the Rules and Regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder and
has been filed with the Commission under the Act. Copies of such
registration statement, including any amendments thereto, the preliminary
prospectuses contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered
by the Company to you. Such registration statement, herein referred to as
the "Registration Statement," has been declared effective by the Commission
under the Act and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The prospectus
constituting a part of the Registration Statement and the prospectus
supplement relating to the offering of the Shares (the "Prospectus
Supplement"), including all documents incorporated by reference therein, as
from time to time amended or supplemented pursuant to the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise, are collectively referred to herein as the "Prospectus." Each
preliminary prospectus supplement related to the offering of the Shares,
including the preliminary prospectus supplement dated February 14, 1995, is
herein referred to as a "Preliminary Prospectus Supplement." Any reference
herein to the Registration Statement, the Prospectus or the Preliminary
Prospectus Supplement shall be deemed to refer to and include the documents
incorporated by reference therein, as of the date of such Registration
Statement, Prospectus or Preliminary Prospectus Supplement, as the case may
be, and, in the case of any reference herein to any Prospectus or
Preliminary Prospectus Supplement, also shall be deemed to include any
documents incorporated by reference therein, and any supplements or
amendments relating to the Shares being issued and sold pursuant hereto,
filed with the Commission after the date of filing of the Prospectus or
Preliminary Prospectus Supplement under Rules 424(b) and prior to the
termination of the offering of the Shares by the Underwriters.
(b) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of Georgia, with
corporate power and authority to own or lease its properties and conduct
its business as described in the Registration Statement. The Company is
duly qualified to transact business in all jurisdictions in which the
conduct of its business requires such qualification. Except for
investments in securities as described in the Prospectus, the Company has
no equity or other interest in, or right to acquire, an equity or other
interest in, any corporation, partnership, trust or other entity.
(c) The outstanding shares of Common Stock and Preferred Stock of
the Company have been duly authorized and validly issued and are fully paid and
non-assessable; the Shares to be issued and sold by the Company have been
duly authorized and when issued and paid for as contemplated herein will be
validly issued, fully-paid and non-assessable and will conform with the
statements concerning them in the Prospectus; and no preemptive rights of
stockholders exist with respect to any of the Shares or the issue and sale
thereof.
(d) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and non-assessable and will conform to
the description of the Series C Preferred Stock contained in the Prospectus,
and the terms of the Articles of Amendment with respect to the Shares will
be valid and binding on the Company; the Shares are convertible into shares
of Common Stock in accordance with the terms of the Articles of Amendment
with respect to the Shares; the shares of Common Stock issuable upon
conversion of the Shares have been duly and validly authorized and reserved
for issuance and, when issued and delivered in accordance with the terms of
the Articles of Amendment with respect to the Shares, will be duly and
validly issued, fully paid and non-assessable and will conform to the
description thereof contained in the Prospectus; the holders of outstanding
capital stock of the Company are not entitled to preemptive or other rights
afforded by the Company to subscribe for the Shares or the shares of Common
Stock issuable upon conversion of the Shares.
(e) The issue and sale of the Shares, and the shares of Common
Stock issuable upon conversion of the Shares, if any, by the Company and the
compliance by the Company with all of the provisions of the Articles of
Amendment with respect to the Shares and provisions of this Agreement and
the consummation of the transactions herein and therein contemplated,
including the conversion of the Shares into shares of Common Stock, will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject except for any such conflict,
breach or violation which does not have a material adverse effect on the
Company, nor will such action result in any violation of the provisions of
the Articles of Incorporation or By-Laws of the Company or any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
issue and sale of the Shares and the shares of Common Stock issuable upon
conversion of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except the filing of the
Articles of Amendment with the Secretary of State of Georgia and such
consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(f) The Commission has not issued an order preventing or sus-
pending the use of any Prospectus or Preliminary Prospectus relating to the
proposed offering of the Shares nor instituted proceedings for that
purpose. The Registration Statement contains and the Prospectus and any
amendments or supplements thereto will contain all statements which are
required to be stated therein by, and in all respects conform or will
conform, as the case may be, to the requirements of, the Act and the Rules
and Regulations. The documents incorporated by reference in the
Prospectus, at the time they were filed or will be filed with the
Commission, conformed or will conform at the time of filing, in all
respects to the requirements of the Exchange Act or the Act, as applicable,
and the Rules and Regulations of the Commission thereunder. Neither the
Registration Statement nor any amendment thereto, and neither the
Prospectus nor any supplement thereto, including any documents incorporated
by reference therein, contains or will contain, as the case may be, any
untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment or
supplement, or any documents incorporated by reference therein, in reliance
upon, and in conformity with, written information furnished to the Company
by or on behalf of any Underwriter through the Representatives,
specifically for use in the preparation thereof.
(g) The financial statements of the Company, together with re-
lated notes and schedules as set forth or incorporated by reference in the
Registration Statement, present fairly the financial position and the
results of operations of the Company at the indicated dates and for the
indicated periods. The financial statements with respect to the properties
acquired or to be acquired by the Company, together with related notes and
schedules as set forth or incorporated by reference in the Registration
Statement or the Prospectus, present fairly the financial position and the
results of operations of such properties at the indicated dates and for the
indicated periods. Such financial statements have been prepared in
accordance with generally accepted principles of accounting, consistently
applied throughout the periods involved, and all adjustments necessary for
a fair presentation of results for such periods have been made. The
summary financial and statistical data included or incorporated by
reference in the Registration Statement or the Prospectus present fairly
the information shown therein and have been compiled on a basis consistent
with the financial statements presented therein.
(h) The Pro Forma Financial Statements of the Company included in
the Prospectus and incorporated by reference in the Registration Statement have
been prepared in conformity with the requirements of Article 11 of
Regulation S-X.
(i) There is no action or proceeding pending or, to the know-
ledge of the Company, threatened against the Company before any court or
administrative agency or by any regulatory authority which might result in
any material adverse change in the business or condition of the Company,
except as set forth in the Registration Statement.
(j) The Company has good and marketable title to all of the
properties and assets reflected in the financial statements (or as described
in the Registration Statement) hereinabove described, subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those reflected
in such financial statements (or as described in the Registration
Statement) or which are not material in amount. The Company occupies its
leased properties under valid and binding leases conforming to the
description thereof set forth in the Registration Statement.
(k) The Company has filed all Federal, State and foreign income
tax returns which have been required to be filed and have paid all taxes
indicated by said returns and all assessments received by them or any of
them to the extent that such taxes have become due and are not being
contested in good faith.
(l) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or supplemented,
there has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company or the earnings, business affairs, management, or
business prospects of the Company, whether or not occurring in the ordinary
course of business, and there has not been any material transaction entered
into by the Company other than transactions in the ordinary course of
business and changes and transactions contemplated by the Registration
Statement, as it may be amended or supplemented. The Company has no
material contingent obligations which are not disclosed in the Registration
Statement, as it may be amended or supplemented.
(m) The Company is not in default under any agreement, lease,
contract, indenture or other instrument or obligation to which it is a
party or by which it or any of its properties is bound and which default is
of material significance in respect of the business or financial condition
of the Company.
(n) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions
herein contemplated (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under State securities or Blue Sky laws) has been obtained or made and is
in full force and effect.
(o) The Company holds all material licenses, certificates and
permits from governmental authorities which are necessary to the conduct of its
business; and the Company has not infringed any patents, patent rights,
trade names, trademarks or copyrights, which infringement is material to
the business of the Company.
(p) Arthur Andersen LLP, who have certified certain of the
financial statements filed with the Commission as part of, or incorporated by
reference in, the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
(q) The Company has never been, is not now, and immediately
after the sale of the Shares under this Agreement will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(r) With respect to all tax periods regarding which the Internal
Revenue Service is or will be entitled to assert any claim, the Company has
met the requirements for qualification as a real estate investment trust
under Sections 856 through 860 of the Internal Revenue Code, as amended,
and the Company's present and contemplated operations, assets and income
continue to meet such requirements.
(s) The conditions for the use of a registration statement on
Form S-3 set forth in the General Instructions on Form S-3 have been
satisfied and the Company is entitled to use such form for the transactions
contemplated herein.
(t) The Company's Common Stock and Series A Cumulative Conver-
tible Preferred Stock are listed on the New York Stock Exchange, and the Shares
of the Company to be sold under this Agreement have been approved for
listing on the New York Stock Exchange.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES. On the basis of
the representations, warranties and covenants herein contained, and subject
to the conditions herein set forth, the Company agrees to sell to the
Underwriters and each Underwriter agrees, severally and not jointly, to
purchase, at a price of $24.00 per share, the number of Firm Shares set
forth opposite the name of each Underwriter in Schedule I hereof, subject
to adjustments in accordance with Section 9 hereof.
Payment for the Firm Shares to be sold hereunder is to be made in New
York Clearing House funds by certified or bank cashier's checks drawn to
the order of the Company against delivery of certificates therefor to the
Representatives for the several accounts of the Underwriters. Such payment
and delivery are to be made at the offices of Alex. Brown & Sons
Incorporated, 135 East Baltimore Street, Baltimore, Maryland, at 10:00
A.M., Baltimore time, on the fifth business day after the date of this
Agreement or at such other time and date not later than five business days
thereafter as you and the Company shall agree upon, such time and date
being herein referred to as the "Closing Date." (As used herein, "business
day" means a day on which the New York Stock Exchange is open for trading
and on which banks in New York are open for business and are not permitted
by law or executive order to be closed.) The certificates for the Firm
Shares will be delivered in such denominations and in such registrations as
the Representatives request in writing not later than the third full
business day prior to the Closing Date, and will be made available for
inspection by the Representatives at least one business day prior to the
Closing Date.
In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in the first paragraph of
this Section 2. The option granted hereby may be exercised in whole or in
part but only once and at any time upon written notice given within 30 days
after the date of this Agreement, by you, to the Company setting forth the
number of Option Shares as to which the several Underwriters are exercising
the option, the names and denominations in which the Option Shares are to
be registered and the time and date at which such certificates are to be
delivered. The time and date at which certificates for Option Shares are
to be delivered shall be determined by the Representatives but shall not be
earlier than three nor later than 10 full business days after the exercise
of such option, nor in any event prior to the Closing Date (such time and
date being herein referred to as the "Option Closing Date"). If the date
of exercise of the option is three or more days before the Closing Date,
the notice of exercise shall set the Closing Date as the Option Closing
Date. The number of Option Shares to be purchased by each Underwriter
shall be in the same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such Underwriter
bears to 4,000,000, adjusted by you in such manner as to avoid fractional
shares. The option with respect to the Option Shares granted hereunder may
be exercised only to cover over-allotments in the sale of the Firm Shares
by the Underwriters. You may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to the Company.
To the extent, if any, that the option is exercised, payment for the Option
Shares shall be made on the Option Closing Date in New York Clearing House
funds by certified or bank cashier's check drawn to the order of the
Company against delivery of certificates therefor at the offices of Alex.
Brown & Sons Incorporated, 135 East Baltimore Street, Baltimore, Maryland.
3. OFFERING BY THE UNDERWRITERS. It is understood that the several
Underwriters are to make a public offering of the Firm Shares as soon as
the Representatives deem it advisable to do so. The Firm Shares are to be
initially offered to the public at the initial public offering price set
forth in the Prospectus. The Representatives may from time to time
thereafter change the public offering price and other selling terms. To
the extent, if at all, that any Option Shares are purchased pursuant to
Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the several Underwriters that:
(a) The Company will (i) prepare and timely file with the Com-
mission under Rule 424(b) of the Rules and Regulations a Prospectus containing
information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and
Regulations, (ii) not file any amendment to the Registration Statement or
supplement to the Prospectus or document incorporated by reference therein
of which the Representatives shall not previously have been advised and
furnished with a copy or to which the Representatives shall have reasonably
objected in writing or which is not in compliance with the Rules and
Regulations and (iii) file on a timely basis all reports and any definitive
proxy or information statements required to be filed by the Company with
the Commission subsequent to the date of the Prospectus and prior to the
termination of the offering of the Shares by the Underwriters.
(b) The Company will advise the Representatives promptly of any
request of the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, or of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the use of the Prospectus or
of the institution of any proceedings for that purpose, and the Company
will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(c) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of such
jurisdictions as the Representatives may reasonably have designated in
writing and will make such applications, file such documents, and furnish
such information as may be reasonably required for that purpose, provided
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction where it
is not now so qualified or required to file such a consent. The Company
will, from time to time, prepare and file such statements, reports, and
other documents, as are or may be required to continue such qualifications
in effect for so long a period as the Representatives may reasonably
request for distribution of the Shares.
(d) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company will
deliver to, or upon the order of, the Representatives during the period
when delivery of a Prospectus is required under the Act, as many copies of
the Prospectus in final form, or as thereafter amended or supplemented, as
the Representatives may reasonably request. The Company will deliver to
the Representatives at or before the Closing Date, four signed copies of
the Registration Statement and all amendments thereto including all
exhibits filed therewith, and will deliver to the Representatives such
number of copies of the Registration Statement, including documents
incorporated by reference therein, but without exhibits, and of all
amendments thereto, as the Representatives may reasonably request.
(e) If during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer any event shall occur as a
result of which, in the judgment of the Company or in the opinion of counsel
for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company promptly will
either (i) prepare and file with the Commission an appropriate amendment to
the Registration Statement or supplement to the Prospectus or (ii) prepare
and file with the Commission an appropriate filing under the Exchange Act
which shall be incorporated by reference in the Prospectus so that the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with law.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later
than 15 months after the effective date of the Registration Statement (as
defined in Rule 158(c)), an earning statement (which need not be audited) in
reasonable detail, covering a period of at least 12 consecutive months
beginning after the effective date of the Registration Statement, which
earning statement shall satisfy the requirements of Section 11(a) of the
Act and Rule 158 of the Rules and Regulations and will advise you in
writing when such statement has been so made available.
(g) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives copies of annual reports and copies of
all other documents, reports and information furnished by the Company to
its stockholders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act or
the Exchange Act. The Company will deliver to the Representatives similar
reports with respect to significant subsidiaries, as that term is defined
in the Rules and Regulations, which are not consolidated in the Company's
financial statements.
(h) No offering, sale or other disposition of any Common Stock
of the Company will be made for a period of 90 days after the date of this
Agreement, directly or indirectly, by the Company otherwise than hereunder
or with the prior written consent of the Representatives except that the
Company may, without such consent, issue shares upon the exercise of
options outstanding on the date of this Agreement issued pursuant to the
Company's incentive stock option plan, issued as consideration for future
acquisitions or issued pursuant to the Company's dividend reinvestment
plan.
(i) The Company will reserve and keep available at all times,
free of preemptive rights, shares of Common Stock for the purpose of enabling
the Company to satisfy any obligations to issue shares of its Common Stock upon
conversion of the Shares.
(j) The Company will take any action reasonably necessary to
ensure that any shares of Common Stock issued upon the conversion or redemp-
tion of the Shares are (i) freely transferable and not subject to any resale
restrictions under the Act or any applicable state securities or blue sky
laws (other than any shares of Common Stock issued upon conversion or
redemption of any Shares which are held by an "affiliate" (as defined in
Rule 144 under the Act) of the Company and (ii) duly and validly
authorized, fully paid and nonassessable.
(k) The Company will use all reasonable efforts to list or main-
tain the listing of the shares of Common Stock issuable upon such conversion or
redemption on the New York Stock Exchange.
5. COSTS AND EXPENSES. The Company will pay all costs, expenses and
fees incident to the performance of the obligations of the Company under
this Agreement, including, without limiting the generality of the
foregoing, the following: accounting fees of the Company; the fees and
disbursements of counsel for the Company; the cost of printing and
delivering to, or as requested by, the Underwriters copies of the
Registration Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Agreement Among Underwriters, the Underwriters' Selling
Memorandum, the Underwriters' Questionnaire, the Invitation Letter, the
Blue Sky Survey and any supplements or amendments thereto; the filing fees
of the Commission; the filing fees and expenses incident to securing any
required review by the National Association of Securities Dealers, Inc.
(the "NASD") of the terms of the sale of the Shares; the fees and expenses
incurred with respect to the listing of the Shares, and, if applicable, any
Common Stock issuable upon conversion or redemption of the Shares, on the
New York Stock Exchange; and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with
the qualification of the Shares under State securities or Blue Sky laws.
The Company shall not, however, be required to pay for any of the
Underwriters' expenses (other than those related to qualification under
State securities or Blue Sky laws) except that, if this Agreement shall not
be consummated because the conditions in Section 7 hereof are not
satisfied, or because this Agreement is terminated by the Representatives
pursuant to Section 6 hereof, or by reason of any failure, refusal or
inability on the part of the Company to perform any undertaking or satisfy
any condition of this Agreement or to comply with any of the terms hereof
on its part to be performed, unless such failure to satisfy said condition
or to comply with said terms be due to the default or omission of any
Underwriter, then the Company shall reimburse the several Underwiters for
reasonable out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred in connection with investigating, marketing
and proposing to market the Shares or in contemplation of performing their
obligations hereunder; but the Company shall not in any event be liable to
any of the several Underwriters for damages on account of loss of
anticipated profits from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS. The several
obligations of the Underwriters to purchase the Firm Shares on the Closing
Date and the Option Shares, if any, on the Option Closing Date are subject
to the accuracy, as of the Closing Date or the Option Closing Date, as the
case may be, of the representations and warranties of the Company contained
herein, and to the performance by the Company of its covenants and
obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registra-
tion Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been taken or, to the knowledge of
the Company, shall be contemplated by the Commission.
(b) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of Hull,
Towill, Norman & Barrett, P.C., counsel for the Company, dated the Closing
Date or the Option Closing Date, as the case may be, addressed to the
Underwriters to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Georgia, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; the Company is duly qualified to transact business in
all jurisdictions in which the conduct of its business requires
such qualification, or in which the failure to qualify would have
a materially adverse effect upon the business of the Company.
(ii) The Company has authorized and outstanding capital stock
as set forth under the caption "Capitalization" in the Prospectus;
the authorized shares of its Common Stock and Preferred Stock have
been duly authorized; the outstanding shares of its Common Stock
and Preferred Stock have been duly authorized and validly issued
and are fully paid and non-assessable; all of the Shares conform
to the description thereof contained in the Prospectus; and the
certificates for the Shares are in due and proper form.
(iii) The Shares have been duly and validly authorized
and the Shares, when issued and delivered against payment there-
for as provided herein, will be duly and validly issued and
fully paid and nonassessable and will conform to the descrip-
tion thereof contained in the Prospectus, and the terms of the
Articles of Amendment with respect to the Shares are valid and
binding on the Company; the Shares are convertible into shares
of Common Stock in accordance with the terms of the Articles of
Amendment with respect to the Shares; the shares of Common
Stock issuable upon conversion of the Shares have been duly and
validly authorized and reserved for issuance and, when issued
and delivered in accordance with the terms of the Articles of
Amendment with respect to the Shares, will be duly and validly
issued, fully paid and non-assessable and will conform to the
description thereof contained in the Prospectus; the holders of
outstanding capital stock of the Company are not entitled to
preemptive or other rights afforded by the Company to subscribe
for the Shares or the shares of Common Stock issuable upon
conversion of the Shares.
(iv) The Registration Statement has become effective under
the Act and, to the best of the knowledge of such counsel, no stop
order proceedings with respect thereto have been instituted or are
pending or threatened under the Act.
(v) The Registration Statement, all Preliminary
Prospectuses, the Prospectus and each amendment or supplement
thereto and document incorporated by reference therein comply as
to form in all material respects with the requirements of the Act
or the Exchange Act, as applicable and the applicable rules and
regulations thereunder (except that such counsel need express no
opinion as to the financial statements, schedules and other
financial information included or incorporated by reference
therein).
(vi) The statements under the captions "Market Prices of
Stock and Dividends to Shareholders -- Dividend Reinvestment and
Stock Repurchase Plan," "Management's Discussion and Analyses of
Financial Condition -- Liquidity and Capital Resources,"
"Description of Series C Preferred Stock," "Description of Common
Stock," and "Description of Preferred Stock," in the Prospectus,
insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries and
fairly and correctly present the information called for with
respect to such documents and matters.
(vii) Such counsel does not know of any contracts or
documents required to be filed as exhibits to or incorporated by
reference in the Registration Statement or described in the
Registration Statement or the Prospectus which are not so filed,
incorporated by reference or described as required, and such
contracts and documents as are summarized in the Registration
Statement or the Prospectus are fairly summarized in all material
respects.
(viii) Such counsel knows of no material legal
proceedings or regulatory or other claims pending or threatened
against the Company except as set forth in the Prospectus.
(ix) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and
will not conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under, the Charter or
By-Laws of the Company, or any agreement or instrument known to
such counsel to which the Company is a party or by which the
Company may be bound.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the
execution and delivery of this Agreement and the consummation of
the transactions herein contemplated (other than as may be
required by the National Association of Securities Dealers, Inc.
or as required by State securities and Blue Sky laws, as to which
such counsel need express no opinion) except such as have been
obtained or made, specifying the same.
(xii) The Company is not, and will not become as a result
of the consummation of the transactions contemplated by this
Agreement, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and has not been an
"investment company" at any time since 1988.
In rendering such opinion, Hull, Towill, Norman & Barrett, P.C. may
rely as to matters governed by the laws of states other than Georgia or
Federal laws on local counsel in such jurisdictions provided that in each
case Hull, Towill, Norman & Barrett, P.C. shall state that they believe
that they and the Underwriters are justified in relying on such other
counsel and such other counsel's opinion is also addressed to the
Underwriters. In addition to the matters set forth above, such opinion
shall also include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that the Registration
Statement, as of the time it became effective under the Act, the Prospectus
or any amendment or supplement thereto, on the date it was filed pursuant
to Rule 424(b) or any of the documents incorporated by reference therein,
as of the date of effectiveness of the Registration Statement or, in the
case of documents incorporated by reference in the Prospectus after the
date of effectiveness of the Registration Statement, as of the respective
dates when such documents were filed with the Commission and the
Registration Statement and the Prospectus, or any amendment or supplement
thereto, as of the Closing Date or the Option Closing Date, as the case may
be, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading (except that such counsel need express no
view as to financial statements, schedules and other financial information
included or incorporated by reference therein). With respect to such
statement, Hull, Towill, Norman & Barrett, P.C. may state that their belief
is based upon the procedures set forth therein, but is without independent
check and verification.
(c) The Representatives shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of Hull, Towill,
Norman & Barrett, P.C., tax counsel for the Company, dated the Closing Date
or the Option Closing Date, as the case may be, addressed to the
Underwriters to the effect that:
(i) The Company met the requirements for qualification and
taxation as a real estate investment trust ("REIT") for the
taxable years 1987, 1988, 1989, 1990, 1991, 1992, 1993 and 1994,
subject to the qualification noted in subparagraph (ii) below.
(ii) There is an issue as to whether the Company satisfied
the 95%-distribution requirement of Section 857(a)(1) of the Code
with respect to the taxable year 1989. We believe, however, that
if the Internal Revenue Service were to assert successfully that
the Company did not meet the 95%-distribution requirement on the
basis of the foregoing issue, the Company nevertheless would be
entitled to use the deficiency dividend procedures of Section 860
of the Code to preserve its status as a qualified REIT for 1989
and subsequent taxable years by paying deficiency dividends to its
shareholders sufficient to meet the 95%-distribution requirement
and by otherwise complying with the requirements of Section 860 of
the Code.
(iii) The Company's diversity of stock ownership and
proposed method of operation should allow it to qualify as a
REIT for 1995.
(iv) The discussion contained under the caption "Taxation" in
the Prospectus forming a part of the Registration Statement, as of
the time of filing of such Prospectus pursuant to Rule 424(b) and
as of the Closing Date or the Option Closing Date, as the case may
be, accurately reflects existing law and fairly addresses the
material federal income tax issues described therein that would
affect an investment in the Firm Shares or Option Shares, as the
case may be.
In rendering such opinions, Hull, Towill, Norman & Barrett, P.C. may
rely as to matters of fact, to the extent they deem proper, on certificates
of officers of the Company and public officials so long as such counsel
states that no facts have come to the attention of such counsel which lead
them to believe that they are not justified in relying on such
certificates. In addition, Hull, Towill, Norman & Barrett, P.C. may state
that their opinions are based upon the procedures and assumptions set forth
in such opinion letter and that it is limited to the tax matters
specifically covered thereby and that they have not addressed any other tax
consequences of an investment in the Firm Shares or Option Shares, as the
case may be.
(d) The Representatives shall have received from Piper & Marbury,
counsel for the Underwriters, an opinion dated the Closing Date or the
Option Closing Date, as the case may be, substantially to the effect
specified in subparagraphs (iii), (iv), (v) and (x) of Paragraph (b) of
this Section 6, and that the Company is a validly organized and existing
corporation under the laws of the State of Georgia. In rendering such
opinion Piper & Marbury may rely as to all matters governed other than by
the laws of the State of Maryland or Federal laws on the opinion of counsel
referred to in paragraph (b) of this Section 6. In addition to the matters
set forth above, such opinion shall also include a statement to the effect
that nothing has come to the attention of such counsel which leads them to
believe that the Registration Statement, as of the time it became effective
under the Act, and the Prospectus or any amendment or supplement thereto,
on the date it was filed pursuant to Rule 424(b) or any of the documents
incorporated by reference therein, as of the date of effectiveness of the
Registration Statement or, in the case of documents incorporated by
reference in the Prospectus after the date of effectiveness of the
Registration Statement, as of the respective dates when such documents were
filed with the Commission and the Registration Statement and the
Prospectus, or any amendment or supplement thereto, as of the Closing Date
or the Option Closing Date, as the case may be, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (except
that such counsel need express no view as to financial statements,
schedules and other financial information included or incorporated by
reference therein). With respect to such statement, Piper & Marbury may
state that their belief is based upon the procedures set forth therein, but
is without independent check and verification.
(e) The Representatives shall have received at or prior to the
Closing Date from Piper & Marbury a memorandum or summary, in form and sub-
stance satisfactory to the Representatives, with respect to the qualification
for offering and sale by the Underwriters of the Shares under the State
securities or Blue Sky laws of such jurisdictions as the Representatives
may reasonably have designated to the Company.
(f) The Representatives shall have received on the Closing Date
or the Option Closing Date, as the case may be, a signed letter from Arthur
Andersen LLP, dated the Closing Date or the Option Closing Date, as the
case may be, which shall confirm, on the basis of a review in accordance
with the procedures set forth in the letter signed by such firm and dated
and delivered to the Representatives on the date hereof that nothing has
come to their attention during the period from the date five days prior to
the date hereof, to a date not more than five days prior to the Closing
Date or the Option Closing Date, as the case may be, which would require
any change in their letter dated the date hereof if it were required to be
dated and delivered on the Closing Date or the Option Closing Date, as the
case may be. All such letters shall be in form and substance satisfactory
to the Representatives.
(g) The Representatives shall have received on the Closing Date
or the Option Closing Date, as the case may be, a signed opinion letter from
Arthur Anderson LLP, confirming the matters set forth in clauses (i), (ii)
and (iii) of subparagraph (c) of this Section 6.
(h) The Representatives shall have received on the Closing Date
or the Option Closing Date, as the case may be, a certificate or certificates of
the Chief Executive Officer and the Chief Financial Officer of the Company
to the effect that, as of the Closing Date or the Option Closing Date, as
the case may be, each of them severally represents as follows:
(i) The Registration Statement has become effective under
the Act and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for
such purpose have been taken or are, to his knowledge,
contemplated by the Commission.
(ii) He does not know of any litigation instituted or
threatened against the Company of a character required to be
disclosed in the Registration Statement which is not so disclosed;
he does not know of any material contract required to be filed as
an exhibit to the Registration Statement which is not so filed;
and the representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the Closing Date or
the Option Closing Date, as the case may be.
(iii) He has carefully examined the Registration State-
ment and the Prospectus and, in his opinion, as of the effective
date of the Registration Statement, the statements contained in
the Registration Statement, including any document incorporated by
reference therein, were true and correct, and such Registration
Statement and Prospectus or any document incorporated by reference
therein did not omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein not misleading and, in his opinion, since the effective
date of the Registration Statement, no event has occurred which
should have been set forth in a supplement to or an amendment of
the Prospectus which has not been so set forth in such supplement
or amendment.
(i) The Company shall have furnished to the Representatives such
further certificates and documents confirming the representations and
warranties contained herein and related matters as the Representatives may
reasonably have requested, including appropriate letters or agreements
confirming the lock-up arrangements described in the Prospectus Supplement.
(j) The Firm Shares, and Option Shares, if any, and the Common
Stock issuable upon conversion of the Firm Shares and Option Shares, if any,
have been approved for listing upon official notice of issuance on the New York
Stock Exchange.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in
all material respects satisfactory to the Representatives and to Piper &
Marbury, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Representatives by notifying the Company of such termination in
writing or by telegram at or prior to the Closing Date or the Option
Closing Date, as the case may be.
In such event, the Company and the Underwriters shall not be under
any obligation to each other (except to the extent provided in Sections 5 and 8
hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY. The obligations of
the Company to sell and deliver the portion of the Shares required to be
delivered as and when specified in this Agreement are subject to the
conditions that at the Closing Date or the Option Closing Date, as the case
may be, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and in effect or proceedings therefor
initiated or threatened.
8. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act against any losses, claims, damages or liabilities to which
such Underwriter or such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained or incorporated by reference in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter and
each such controlling person for any legal or other expenses reasonably
incurred by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action
or proceeding; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission made or incorporated by
reference in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by or through
the Representatives specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer, or
controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained or incorporated by
reference in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they
were made, and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission
or alleged omission has been made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investi-
gation) shall be instituted involving any person in respect of which indemnity
may be sought pursuant to this Section 8, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought
(the "indemnifying party") in writing. No indemnification provided for in
Section 8(a) or (b) shall be available to any party who shall fail to give
notice as provided in this Section 8(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from
any liability which it or they may have to the indemnified party for
contribution or otherwise than on account of the provisions of Section 8(a)
or (b). In case any such proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred the fees and
expenses of the counsel retained by the indemnified party in the event (i)
the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests beween them. It is understood that the indemnifying party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm for all such indemnified parties. Such firm shall be
designated in writing by you in the case of parties indemnified pursuant to
Section 8(a) and by the Company in the case of parties indemnified pursuant
to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 8(c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Underwriters on he other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to above in this Section 8(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased
by such Underwriter and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
Section 8(d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having
jurisdiction over any other contributing party, agrees that process issuing
from such court may be served upon him or it by any other contributing
party and consents to the service of such process and agrees that any other
contributing party may join him or it as an additional defendant in any
such proceeding in which such other contributing party is a party.
9. DEFAULT BY UNDERWRITERS. If on the Closing Date or the Option
Closing Date, as the case may be, any Underwriter shall fail to purchase
and pay for the portion of the Shares which such Underwriter has agreed to
purchase and pay for on such date (otherwise than by reason of any default
on the part of the Company, you shall use your best efforts to procure
within 24 hours thereafter one or more of the other Underwriters, or any
others, to purchase from the Company such amounts as may be agreed upon and
upon the terms set forth herein, the Firm Shares or Option Shares, as the
case may be, which the defaulting Underwriter or Underwriters failed to
purchase. If during such 24 hours you shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares,
as the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to
which such default shall occur does not exceed 10% of the Firm Shares or
Option Shares, as the case may be, covered hereby, the other Underwriters
shall be obligated, severally, in proportion to the respective numbers of
Firm Shares or Option Shares, as the case may be, which they are obligated
to purchase hereunder, to purchase the Firm Shares or Option Shares, as the
case may be, which such defaulting Underwriter or Underwriters failed to
purchase, or (b) if the aggregate number of shares of Firm Shares or Option
Shares, as the case may be, with respect to which such default shall occur
exceeds 10% of the Firm Shares or Option Shares, as the case may be,
covered hereby, the Company or any of the Representatives will have the
right, by written notice given within the next 24-hour period to the
parties to this Agreement, to terminate this Agreement without liability on
the part of the non-defaulting Underwriters or of the Company except to the
extent provided in Section 8 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 9, the Closing
Date or Option Closing Date, as the case may be, may be postponed for such
period, not exceeding seven days, as you may determine in order that the
required changes in the Registration Statement or in the Prospectus or in
any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter.
Any action taken under this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter
under this Agreement.
10. NOTICES. All communications hereunder shall be in writing
and, except as otherwise provided herein, will be mailed, delivered or
telegraphed and confirmed as follows: if to the Underwriters, to Alex.
Brown & Sons Incorporated, 135 East Baltimore Street, Baltimore, Maryland,
Attention: William G. Byrnes, Managing Director; if to the Company, to
Merry Land & Investment Company, Inc., Attention: Peter S. Knox, III,
Chairman of the Board.
11. TERMINATION. This Agreement may be terminated by you by
notice to the Company as follows:
(a) at any time prior to the earlier of (i) the time the Shares
are released by you for sale by notice to the Underwriters, or (ii) 11:30 A.M.
on the date of this Agreement;
(b) at any time after the date hereof if any of the following has
occurred: (i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse
change or any development involving a prospective material adverse change
in or affecting the condition, financial or otherwise, of the Company or
the earnings, business affairs, management or business prospects of the
Company, whether or not arising in the ordinary course of business, (ii)
any outbreak or escalation of hostilities or declaration of war or national
emergency after the date hereof or other national or international calamity
or crisis or change in economic or political conditions if the effect of
such outbreak, escalation, declaration, emergency, calamity, crisis or
change on the financial markets of the United States would, in your
reasonable judgment, make the offering or delivery of the Shares
impracticable or inadvisable, (iii) trading in securities on the New York
Stock Exchange or the American Stock Exchange shall have been suspended or
materially limited (other than limitations on hours or numbers of days of
trading) or minimum prices shall have been established for securities on
either such Exchange, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your reasonable opinion
materially and adversely affects or will materially or adversely affect the
business or operations of the Company, (v) declaration of a banking
moratorium by either federal or New York State authorities, (vi) any
downgrading in the rating of the Company's securities by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities Exchange Act of 1934, as amended); (vii)
the suspension of trading of the Company's Common Stock or Series A
Preferred Stock by the New York Stock Exchange; (viii) the taking of any
action by any governmental bdy or agency in respect of its monetary or
fiscal affairs which in your reasonable opinion has a material adverse
effect on the securities markets in the United States or elsewhere, or (ix)
any litigation or proceeding is pending or threatened against the
Underwriters which seeks to enjoin or otherwise restrain, or seeks damages
in connection with, or questions the legality or validity of this Agreement
or the transactions contemplated hereby; or
(c) as provided in Sections 6 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option Shares,
upon the occurrence at any time prior to the Option Closing Date of any of
the events described in subparagraph (b) above or as provided in Sections 6
and 9 of this Agreement.
12. SUCCESSORS. This Agreement has been and is made solely for
the benefit of the Underwriters and the Company and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person
will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares merely because of such purchase.
13. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the
representations, warranties and covenants in this Agreement shall remain in
full force and effect regardless of (a) any termination of this Agreement,
(b) any investigation made by or on behalf of any Underwriter or
controlling person thereof, or by or on behalf of the Company or its
directors or officers and (c) delivery of and payment for the Shares under
this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Maryland.
<PAGE>
If the foregoing letter is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
MERRY LAND & INVESTMENT
COMPANY, INC.
By _____________________
Peter S. Knox III
Chairman
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ALEX. BROWN & SONS INCORPORATED
GOLDMAN, SACHS & CO.
PAINEWEBBER INCORPORATED
INTERSTATE/JOHNSON LANE CORPORATION
By ALEX. BROWN & SONS INCORPORATED
By _______________________________
Authorized Officer
<PAGE>
SCHEDULE I
Schedule of Underwriters
<TABLE>
<CAPTION>
Number of Firm Shares
Underwriter to be Purchased
---------- --------------------
<S> <C>
Alex. Brown & Sons Incorporated 1,000,000
Goldman, Sachs & Co. 1,000,000
PaineWebber Incorporated 1,000,000
Interstate/Johnson Lane Corporation 1,000,000
---------
TOTAL 4,000,000
=========
</TABLE>
<PAGE>
[Letterhead of Hull, Towill, Norman & Barrett, P.C.]
March 8, 1995
Merry Land & Investment Company, Inc.
P.O. Box 1417
Augusta, Georgia 30913
RE: Public Offering of Series C Cumulative Convertible Preferred
Stock of Merry Land & Investment Company, Inc. (the "Offering")
Ladies and Gentlemen:
We have acted as counsel to Merry Land & Investment Company, Inc. (the
"Company") in connection with the referenced Offering with respect to:
(a) The proposed sale of up to 4,600,000 shares of the Company's
$2.15 Series C Cumulative Convertible Preferred Stock, without par value,
$25 Liquidation Preference (the "Series C Preferred Stock") including the
underwriters' overallotment option for 600,000 shares of the Series C
Preferred Stock, if exercised; and
(b) The issuance, from time to time, by the Company of its common
stock, without par value (the "Common Stock"), upon conversion or
redemption of the Series C Preferred Stock, the aggregate number of shares
of Common Stock issuable upon conversion or redemption of the Series C
Preferred Stock to be based upon the conversion rate of the Series C
Preferred Stock in effect on the date of conversion or redemption.
We are familiar with the articles of incorporation, as amended, and
by-laws of the Company and have examined such additional records and public
documents as we have deemed necessary for the opinion hereinafter
expressed. We have been counsel to the Company for many years and are
generally familiar with its affairs. Where facts have not been
independently verified, we have relied upon statements of the Company's
officers, certificates of public officials, and records of the Company.
In rendering the opinions expressed herein, we have examined such
documents as we have deemed appropriate, including without limitation the
Offering Memorandum, the Company's federal income tax returns for the
taxable periods to which our opinion relates, and Company-prepared
schedules which relate to the Company's compliance with various real estate
investment trust ("REIT") qualification tests. In our examination of
documents, we have assumed, with your consent, that all documents submitted
to us are authentic originals, or if submitted as photocopies, that they
faithfully reproduce the originals thereof, that all such documents have
been or will be duly executed to the extent required, that all
representations and statements set forth in such documents are true and
correct, and that all obligations imposed by any such documents on the
parties thereto have been or will be performed or satisfied in accordance
with their terms. We have also obtained such additional information and
representations as we have deemed relevant and necessary through
consultation with the officers of the Company and with the Company's
independent public accountants.
In rendering our opinion, we have assumed that during the relevant
taxable periods all persons who were required under the Securities and
Exchange Act of 1934 to file or amend Schedules 13D and 13G with respect to
the Company's outstanding shares appropriately made such filings and that
the Company was duly apprised of all such filings.
Based upon the foregoing, we are of the opinion that:
1. The Company met the requirements for qualification and taxation
as a REIT for the taxable years 1987, 1988, 1989, 1990, 1991, 1992, 1993
and 1994.
2. There is an issue as to whether the Company satisfied the "95%-
distribution" requirement of Section 857(a)(1) of the Code with respect to
the taxable year 1989. We believe, however, that if the Internal Revenue
Service were to assert successfully that the Company did not meet the 95%-
distribution requirement on the basis of the foregoing issue, the Company
nevertheless would be entitled to use the deficiency dividend procedures of
Section 860 of the Code to preserve its status as a qualified REIT for 1989
and subsequent taxable years by paying deficiency dividends to its
shareholders sufficient to meet the 95%-distribution requirement and by
otherwise complying with the requirements of Section 860 of the Code.
3. The Company's diversity of stock ownership and proposed method of
operation should allow it to qualify as a REIT for 1995.
4. The discussion contained in that portion of the Company's
Prospectus Supplement dated March 8, 1995 to that Prospectus filed with
Registration Statement #33-57453 (the "Prospectus Supplement") under the
caption "Taxation" accurately reflects existing law and fairly addresses
the material federal income tax issues that would affect an investment in
the Shares. Such discussion is hereby incorporated herein by this
reference.
The opinions expressed herein are based upon the Code, the U.S.
Treasury Regulations promulgated thereunder, current administrative
positions of the U.S. Internal Revenue Service, and existing judicial
decisions, any of which could be changed at any time, possibly on a
retroactive basis. Any such changes could adversely affect the opinions
rendered herein and the tax consequences to the Company and the investors
in the Shares. In addition, as noted above, our opinions are based solely
on the documents that we have examined, the additional information that we
have obtained, and the representations that have been made to us, and
cannot be relied upon if any of the facts contained in such documents or in
such additional information is, or later becomes, inaccurate or if any of
the representations made to us is, or later becomes, inaccurate.
Finally, our opinion is limited to the tax matters specifically
covered thereby, and we have not been asked to address, nor have we
addressed, any other tax consequences of an investment in the Shares.
We hereby consent to the filing of this opinion as an exhibit to the
Form 8-K filed with respect to the Offering and reference to this opinion
in the Prospectus Supplement.
Very truly yours,
HULL, TOWILL, NORMAN
& BARRETT, P.C.
<PAGE>
[Letterhead of Hull, Towill, Norman & Barrett, P.C.]
March 8, 1995
Merry Land & Investment Company, Inc.
P.O. Box 1417
Augusta, Georgia 30913
RE: Public Offering of Series C Cumulative Convertible Preferred
Stock of Merry Land & Investment Company, Inc. (the "Offering")
Ladies and Gentlemen:
We have acted as counsel to Merry Land & Investment Company, Inc. (the
"Company") in connection with the referenced Offering with respect to:
(a) The proposed sale of up to 4,600,000 shares of the Company's
$2.15 Series C Cumulative Convertible Preferred Stock, without par value,
$25 Liquidation Preference (the "Series C Preferred Stock") including the
underwriters' overallotment option for 600,000 shares of the Series C
Preferred Stock, if exercised; and
(b) The issuance, from time to time, by the Company of its common
stock, without par value (the "Common Stock"), upon conversion or
redemption of the Series C Preferred Stock, the aggregate number of shares
of Common Stock issuable upon conversion or redemption of the Series C
Preferred Stock to be based upon the conversion rate of the Series C
Preferred Stock in effect on the date of conversion or redemption.
We are familiar with the articles of incorporation, as amended, and
by-laws of the Company, the Prospectus Supplement dated March 8, 1995 filed
with Registration Statement #33-57453 (the "Prospectus Supplement"), and
have examined such additional records and public documents as we have
deemed necessary for the opinion hereinafter expressed.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, existing and in good
standing under the laws of the State of Georgia.
2. All proceedings necessary to authorize the offering of the Series
C Preferred Stock and the issuance from time to time of the Common Stock
upon conversion or redemption of the Series C Preferred Stock have been
taken.
3. The Series C Preferred Stock has been duly authorized and, when
sold and paid for in accordance with the Prospectus Supplement, will be
validly issued, fully paid and nonassessable.
4. The Common Stock has been duly authorized and when delivered upon
conversion or redemption of the Series C Preferred Stock in accordance with
the Prospectus Supplement, will be validly issued, fully paid and non-
assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Form 8-K filed with respect to the Offering and reference to this opinion
in the Prospectus Supplement.
Very truly yours,
HULL, TOWILL, NORMAN
& BARRETT, P.C.
