<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): June 11, 1996
Merry Land & Investment Company, Inc.
(Exact name of registrant as specified in its charter)
Georgia 001-11081
(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: June 12, 1996
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ITEM 5. OTHER EVENTS. Merry Land & Investment Company, Inc. (the
"Company") has completed the offering of 2,500,000 shares of its common
stock (the "Common Stock"). The offering of the Common Stock was made
pursuant to a Prospectus Supplement dated June 11, 1996 relating to the
Prospectus dated January 22, 1996 filed with the Company's shelf
registration statement #33-65067 on Form S-3.
The shares of Common Stock have been approved for listing on the NYSE
under the symbol "MRY."
The net proceeds to the Company from the sale of the shares of the
Common Stock are estimated at approximately $50.7 million ($58.3 million if
the Underwriters' over-allotment option is exercised in full). 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 and marketable
securities.
It is expected that delivery of the shares of Common Stock will be
made at the offices of Alex. Brown & Sons Incorporated, Baltimore,
Maryland, on or about June 14, 1996.
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: Amended and Restated Articles of Incorporation
(incorporated herein by reference to Exhibit 4(a) of
the Company's Shelf Registration Statement on Form
S-3 filed December 15, 1995, file #33-65067).
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 11 of
the Company's 1995 10-K filed February 20, 1996)
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 1995 10-K
filed February 20, 1996)
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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/
- ------------------------------
Dorrie E. Green
As Its Vice President
2,500,000 Shares
MERRY LAND & INVESTMENT COMPANY, INC.
Common Stock
(Without Par Value)
UNDERWRITING AGREEMENT
June 11, 1996
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
Ladies and 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 2,500,000 shares of the Company's Common
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 375,000 additional shares of the
Company's Common 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. 33-65067) 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 May 29, 1996, 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. Each of the subsidiaries
of the Company as listed in Exhibit A hereto (collectively, the "Subsidiaries")
has been duly organized and is validly existing as a corporation or limited
partnership, as the case may be, in good standing under the laws of the
jurisdiction of its organization with the power and authority to own or lease
its properties and conduct its business as currently conducted. The Company and
each of the Subsidiaries is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires such qualification.
Except for the Subsidiaries and 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. The outstanding shares of capital stock or partnership interests of
each of the Subsidiaries have been duly authorized and validly issued and are
fully paid and nonassessable and are owned by the Company free and clear of all
liens, encumbrances, security interests and claims; and no options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into shares of capital stock or ownership
interests of the Subsidiaries are outstanding.
(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 issue and sale of the Shares by the Company and the compliance by
the Company with all of the provisions of this Agreement and the consummation of
the transactions herein contemplated 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 or the consummation by the Company of the transactions
contemplated by this Agreement, except 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.
(e) The Commission has not issued an order preventing or suspending 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.
(f) The financial statements of the Company, together with related 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.
(g) There is no action or proceeding pending or, to the knowledge of the
Company, threatened against the Company or any of the Subsidiaries 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 and
the Subsidiaries, except as set forth in the Registration Statement.
(h) The Company and the Subsidiaries have 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 and the Subsidiaries occupy their
leased properties under valid and binding leases conforming to the description
thereof set forth in the Registration Statement.
(i) The Company and the Subsidiaries have 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.
(j) 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 and the Subsidiaries, taken as a whole, or the earnings, business
affairs, management, or business prospects of the Company and the Subsidiaries,
taken as a whole, whether or not occurring in the ordinary course of business,
and there has not been any material transaction entered into by the Company or
any Subsidiary, 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 and the Subsidiaries have no material
contingent obligations which are not disclosed in the Registration Statement, as
it may be amended or supplemented.
(k) Neither the Company nor any of the Subsidiaries is 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 and the Subsidiaries, taken as a whole.
(l) 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.
(m) The Company and each of the Subsidiaries hold all material licenses,
certificates and permits from governmental authorities which are necessary to
the conduct of its business; and neither the Company nor any of the Subsidiaries
has infringed any patents, patent rights, trade names, trademarks or copyrights,
which infringement is material to the business of the Company and the
Subsidiaries, taken as a whole.
(n) 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.
(o) 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.
(p) 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.
(q) 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.
(r) The Company's Common Stock, Series A Cumulative Convertible Preferred
Stock and Series C Cumulative Convertible 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
$21.50 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
immediately available funds by wire transfer 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 third business day
after the date of this Agreement or at such other time and date not later than
three 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 second 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 2,500,000, 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 immediately available funds by wire transfer 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 Commission 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 or
Preferred 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 issue shares pursuant to the Company's
incentive stock option plan, issued as consideration for future acquisitions or
issue shares pursuant to the Company's dividend reinvestment and stock purchase
plan.
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 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 Underwriters 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 Registration
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; each of the Subsidiaries has been
duly organized and is validly existing as a corporation or limited
partnership in good standing under the laws of the jurisdiction of its
organization with power and authority to own its properties and conduct its
business as currently conducted; the Company and each of the Subsidiaries
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 and the Subsidiaries taken as a whole; the outstanding
shares of capital stock or partnership interest, as the case may be, of
each of the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable; and the outstanding shares of capital stock
or partnership interest, as the case may be, of each of the Subsidiaries
are owned by the Company free and clear of all liens, encumbrances and
security interests, and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or partnership interest of the
Subsidiaries are outstanding.
(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 therefor as provided
herein, will be duly and validly issued and fully paid and nonassessable
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.
(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 Common Stock
and Dividends to Shareholders -- Dividend Reinvestment and Stock Purchase
Plan," "Management's Discussion and Analyses of Financial Condition --
Liquidity and Capital Resources," "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 Amended and Restated Articles of Incorporation or By-
Laws of the Company, or any agreement or instrument known to such counsel
to which the Company or any of the Subsidiaries 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, 1994 and 1995, 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 1996.
(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 L.L.P.,
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 L.L.P. 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 L.L.P. 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 L.L.P. a memorandum or summary, in form and substance
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 three days prior to the date hereof, to a date
not more than three 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 Statement 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, shall 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 L.L.P.,
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 investigation)
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 between 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 first business day after 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,
Series A Preferred Stock or Series C Preferred Stock by the New York Stock
Exchange; (viii) the taking of any action by any governmental body 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.
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: /s/
-----------------------
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: /s/
- -----------------------------------
Authorized Officer
<PAGE> SCHEDULE I
Schedule of Underwriters
<TABLE>
<CAPTION>
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
<S> <C>
Alex. Brown & Sons Incorporated
Goldman, Sachs & Co.
PaineWebber Incorporated
Interstate/Johnson Lane Corporation
Total 2,500,000
- ----- ---------------------
</TABLE>
<PAGE>
EXHIBIT A
Subsidiaries
------------------------------------
Letterhead of
Hull, Towill, Norman & Barrett, P.C.
------------------------------------
June 15, 1994
MERRY LAND & INVESTMENT COMPANY, INC.
P.O. Box 1417
Augusta, Georgia 30913
Re: Public Offering of up to 2,875,000 shares of the common stock of
Merry Land & Investment Company, Inc.
Gentlemen:
We have acted as counsel to Merry Land & Investment Company, Inc. in
connection with the referenced offering of up to 2,875,000 shares of its
common stock, without par value, under its Shelf Registration Statement on
Form S-3, #33-65067.
We are familiar with the articles of incorporation and by-laws of
Merry Land & Investment Company, Inc., and we have examined such additional
records and public documents as we deem necessary for the opinion
hereinafter expressed.
Based upon the foregoing, we are of the opinion that:
1. Merry Land & Investment Company, Inc. is a corporation duly organized
and existing under the laws of the State of Georgia and is in good
standing under the laws of that state.
2. All proceedings necessary to authorize the stock offering have been
taken.
3. The common stock has been duly authorized and, when sold and paid for
in accordance with the Registration Statement, will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to references to this opinion in the
Registration Statement filed by Merry Land & Investment Company, Inc. in
connection with the registration of its common stock.
/s/
Hull, Towill, Norman
& Barrett, P.C.
<PAGE>
[Letterhead of Hull, Towill, Norman & Barrett, P.C.]
June 11, 1996
MERRY LAND & INVESTMENT COMPANY, INC.
624 Ellis Street
Augusta, GA 30901
RE: MERRY LAND & INVESTMENT COMPANY, INC.: Public Offering of up to
2,875,000 Shares of Common Stock (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
the proposed sale of up to 2,875,000 Shares of the Company's Common Stock
(the "Securities").
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
Company's Shelf Registration Statement on Form S-3 (File #33-65067) and the
amendments thereto, the Prospectus Supplement dated June 11, 1996, 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 each of the taxable years 1987 through 1995, subject to the
qualification noted in paragraph 2 below.
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 1996.
4. The discussion contained in that portion of the Company's
Prospectus Supplement dated June 11, 1996 to that Prospectus filed with
Shelf Registration Statement #33-65067 (the "Prospectus Supplement") under
the caption "Taxation" accurately reflects existing law and fairly
addresses the material federal income tax issues described therein. 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 Securities. 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. No
facts have come to our attention which lead us to believe that we are not
justified in relying upon such representations.
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 Securities.
We hereby consent to the filing of this opinion as an exhibit to the
Form 8-K filed with respect to the Offering.
/S/
HULL, TOWILL, NORMAN
& BARRETT, P.C.
