<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): February 13, 1998
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: February 13, 1998
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ITEM 5. OTHER EVENTS. Merry Land & Investment Company, Inc. (the
"Company") has completed the offering of its 7.625% Series E Cumulative
Redeemable Preferred Stock (the "Series E Preferred Stock"). The offering of
the Series E Preferred Stock was made pursuant to a Prospectus Supplement dated
February 6, 1998 relating to the Prospectus dated January 22, 1996 filed with
the Company's shelf registration statement #33-65067 on Form S-3.
Dividends on the shares of Series E 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 $1.906 per annum. The first record date for determination of
shareholders entitled to receive dividends on the Series E Preferred Stock is
March 16, 1998.
Shares of the Series E Preferred Stock are not convertible at any time.
Application will be made to list the Series E Preferred Stock on the New York
Stock Exchange. Trading of Series E Preferred Stock on the New York Stock
Exchange is expected to commence within the 30-day period after initial
delivery of the Series E Preferred Stock.
The Series E Preferred Stock is not redeemable prior to February 13, 2003.
On or after February 13, 2003, the Series E Preferred Stock may be redeemed for
cash at the option of the Company in whole or in part and at a redemption price
of $25.00 per share plus accrued and unpaid dividends, if any, thereon. The
redemption price other than the portion thereof consisting of accrued and
unpaid dividends is payable solely out of the sale proceeds of other capital
stock of the Company. The Series E Preferred Stock will not be entitled to the
benefit of any sinking fund.
The net proceeds to the Company from the sale of the shares of the Series E
Preferred Stock are estimated at approximately $96.7 million. The Company
intends to use the net proceeds to repay outstanding debt and acquire and
develop additional apartment properties. Pending such uses, the Company intends
to invest temporarily the excess proceeds in interest bearing securities.
Delivery of the shares of Series E Preferred Stock was made through the
facilities of DTC on February 13, 1998.
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 B of the
Company's Form 8-A12B filed February 11, 1998)
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 1996
10-K filed March 25, 1997)
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 1996 10-K filed
March 25, 1997)
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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
$100,000,000
MERRY LAND & INVESTMENT COMPANY, INC.
SERIES E CUMULATIVE REDEEMABLE PREFERRED STOCK
(WITHOUT PAR VALUE)
UNDERWRITING AGREEMENT
February 4, 1998
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February 4, 1998
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
Merry Land & Investment Company, Inc., a Georgia corporation (the
"COMPANY"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "UNDERWRITERS") 4,000,000 shares of its Series E
Cumulative Redeemable Preferred Stock (the "Series E Preferred Stock") (without
par value) (the "SHARES"). The shares of common stock (without par value) of
the Company to be outstanding after giving effect to the sales contemplated
hereby are hereinafter referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement on Form S-3 (File No. 33-65067),
relating to certain securities to be issued from time to time by the Company.
Such registration statement has been declared effective by the Commission,
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), and is
hereinafter referred to as the "REGISTRATION STATEMENT"; the prospectus
constituting a part of the Registration Statement and the prospectus supplement
relating to the offering of the Shares filed pursuant to Rule 424 under th
Securities Act (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 prospectus supplement related to the offering of the
Shares, including the prospectus supplement dated February 4, 1998, is herein
referred to as a "Prospectus Supplement." Any reference herein to the
Registration Statement, Prospectus or 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 Prospectus Supplement, as
the case may be, and in the case of any reference herein to any Prospectus or
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 Prospectus Supplement under Rules
424(b) and prior to the termination of the offering of the Shares by the
Underwriters.
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or to the knowledge
of the Company threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain
any 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, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use
therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the state of Georgia, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly organized, 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, has the power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; all of the
issued shares of capital stock or partnership interests of each subsidiary
of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock and Preferred Stock outstanding prior
to the issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable and will conform to the description
of the Shares contained in the Prospectus, and the terms of the Articles
of Amendment with respect to the Shares (the "Articles of Amendment") will
be valid and binding on the Company; and the issuance of such Shares will
not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement and the compliance
by the Company with the provisions of the Articles of Amendment will not
contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
under this Agreement, except the filing of the Articles of Amendment with
the Secretary of State of Georgia and such as may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its subsidiaries
is subject that are required to be described in the Registration Statement
or the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, and
each prospectus supplement filed pursuant to Rule 424 under the Securities
Act, and the Prospectus Supplement complied when so filed in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder.
(m) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(n) 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.
(o) 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.
(p) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(q) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(r) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement.
(s) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba.
(t) 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, accurately reflects existing law and fairly addresses the material
federal income tax issues described therein that would affect an
investment in the Shares.
2. Agreements to Sell and Purchase. The Company hereby agrees
to sell to the several Underwriters, and each Underwriter, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective numbers of Shares set forth in Schedule I
hereto opposite its name at $24.2125 a share (the "PURCHASE PRICE").
The Company hereby agrees that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 30 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of Series E Preferred Stock or any shares of Preferred Stock on a
parity with the Series E Preferred Stock. The foregoing sentence shall not
apply to the Shares to be sold hereunder.
3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
$25.00 a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by
you at a price that represents a concession not in excess of $.50 a share under
the Public Offering Price, and that any Underwriter may allow, and such dealers
may reallow, a concession, not in excess of $.40 a share, to any Underwriter or
to certain other dealers.
4. Payment and Delivery. Payment for the Shares shall be made
to the Company in Federal or other funds immediately available in New York City
against delivery of such Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on February 13, 1998 The time
and date of such payment are hereinafter referred to as the "CLOSING DATE".
Certificates for the Shares shall be in definitive form and
registered in such names and in such denominations as you shall request in
writing not later than one full business day prior to the Closing Date. The
certificates evidencing the Shares shall be delivered to you on the Closing
Date for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations
of the Company to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that no stop order suspending the
effectiveness of the Registration Statement 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.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 5(a)(i) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Hull, Towill, Norman & Barrett, P.C., counsel for the Company,
dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
(ii) each subsidiary of the Company has been duly organized, 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, has the power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(iv) the shares of Common Stock and Preferred Stock outstanding
prior to the issuance of the Shares have been duly authorized and are
validly issued, fully paid and non-assessable;
(v) all of the issued shares of capital stock or partnership
interest, as the case may be, of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-
assessable and are owned directly by the Company, free and clear of
all liens, encumbrances, equities or claims;
(vi) the Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and will conform to
the description thereof contained in the Prospectus; the terms of the
Articles of Amendment with respect to the Shares are valid and
binding on the Company; and the issuance of such Shares will not be
subject to any preemptive or similar rights;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) neither the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement nor compliance by the Company with the terms of the
Articles of Amendment will contravene any provision of applicable law
or the certificate of incorporation or by-laws of the Company or, to
the best of such counsel's knowledge, any agreement or other
instrument binding upon the Company or any of its subsidiaries that
is material to the Company and its subsidiaries, taken as a whole,
or, to the best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its
obligations under this Agreement, except the filing of the Articles
of Amendment with the Secretary of State of Georgia and such as may
be required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Shares;
(ix) the statements (A) in the Prospectus under the captions
"Capitalization," "Certain Federal Income Tax Considerations,"
"Description of Common Stock," "Description of Preferred Stock" and
"Plan of Distribution," and in the Prospectus Supplement under the
captions "Capitalization," "Description of Series E Preferred Stock,"
"Taxation," and "Underwriting" and (B) in the Registration Statement
in Items 14 and 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(x) after due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as
required;
(xi) the Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended; and
(xii) such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial and statistical data included therein
as to which such counsel need not express any opinion) comply as to
form in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder, (B)
has no reason to believe that (except for financial statements and
schedules and other financial and statistical data as to which such
counsel need not express any belief) the Registration Statement and
the prospectus included therein at the time the Registration
Statement became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and (C) has no reason to believe that (except for
financial statements and schedules and other financial and
statistical data as to which such counsel need not express any
belief) the Prospectus contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(d) Hull, Towill, Norman & Barrett, P.C. tax counsel for the Company,
shall have delivered to you its written opinion, dated the Closing Date,
in form and substance satisfactory to you, 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 1991 throught 1997;
(ii) the Company's diversity of stock ownership and proposed
method of operation should allow it to qualify as a REIT for 1998;
and
(iii) the discussion contained under the caption "Taxation" in
the prospectus contained in the Registration Statement, accurately
reflects existing law and fairly addresses the material federal
income tax issues described therein.
(e) The Underwriters shall have received on the Closing Date an
opinion of Piper & Marbury L.L.P., counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 5(c)(vi),
5(c)(vii), 5(c)(ix) (but only as to the statements in the Prospectus under
"Description of Series E Preferred Stock" and "Underwriting") and
5(c)(xii) above.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United states
and the State of Georgia, to the extent such counsel deems proper and to
the extent specified in such opinion, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to the
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws; (B) as to
matters of fact, to the extent such counsel deems proper, on certificates
of responsible officers of the Company and certificates or other written
statements of officials of jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company. The
opinion of such counsel for the Company shall state that the opinion of
any such other counsel is in form satisfactory to such counsel and, in
such counsel's opinion, the Underwriters and they are justified in relying
thereon. With respect to Section 5(c)(xii) above, Hull, Towill, Norman &
Barrett, P.C. and Piper & Marbury L.L.P. may state that their opinion and
belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
The opinion of Hull, Towill, Norman & Barrett, P.C. described in
Section 5(c) above shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
(f) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the
Underwriters, from Arthur Anderson LLP, independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; PROVIDED that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(g) on the Closing Date, Arthur Andersen LLP shall have furnished to
you a letter confirming the matters set forth in clauses (i) and (ii) of
subparagraph (d) of this Section 5.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, two signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(d) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) To prepare and file with the Secretary of State of Georgia
Articles of Amendment setting forth the terms of the Shares on a basis
consistent with the description set forth in the Prospectus Supplement on
or before the Closing Date.
(d) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(e) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(f) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the
twelve-month period ending March 31, 1999 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(g) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of
the Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing any
Blue Sky or Legal Investment memorandum in connection with the offer and
sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale under
state securities laws as provided in Section 6(c) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with
the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred
in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) all
fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Shares and all costs
and expenses incident to listing the Shares on New York Stock Exchange,
(vi) the cost of printing certificates representing the Shares, (vii) the
costs and charges of any transfer agent, registrar or depositary, and
(viii) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise
made in this Section. It is understood, however, that except as provided
in this Section, Section 7 entitled "Indemnity and Contribution", and the
last paragraph of Section 9 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them and
any advertising expenses connected with any offers they may make.
(h) To file, as soon as practical after the date hereof, an
application with the New York Stock Exchange for listing of the Shares.
The Company will take all reasonable efforts to enable trading of the
Shares on the New York Stock Exchange to begin within 30 days of the
Closing Date.
7. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus,
the Prospectus or any amendments or supplements thereto.
(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 Section 7(a) or 7(b), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of
the indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay 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, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (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 respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated, in the case of parties indemnified pursuant to Section 7(a), and
by the Company, in the case of parties indemnified pursuant to Section 7(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. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) 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 hand from the offering of the Shares or (ii) if the allocation provided
by clause 7(d)(i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause 7(d)(i) above but also the relative fault of the Company on the one hand
and of the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, 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 hand in
connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Company on the one
hand and the Underwriters on the other hand 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 or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective number of Shares they have purchased hereunder, and not
joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 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 that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, 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 Section 7, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for any
of the Shares.
8. Termination. This Agreement shall be subject to termination
by notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall
have been suspended or materially limited on or by, as the case may be, any of
the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of
any securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 8(a)(i) through 8(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date any one or more of the Underwriters shall
fail or refuse to purchase Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of the Shares to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the number of Shares set forth opposite their respective
names in Schedule I bears to the aggregate number of Shares set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions
as you may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; PROVIDED
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Shares and the aggregate number
of Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Shares to be purchased, and arrangements satisfactory
to you and the Company for the purchase of such Shares are not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case
either you or the Company shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
<PAGE>
<PAGE>
Very truly yours,
Merry Land & Investment Company, Inc.
By: /s/
----------------------------
Name: W. Tennent Houston
Title: President
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto.
By: Morgan Stanley & Co. Incorporated
By: /s/
--------------------------
Name: Michael Fusco
Title: Vice President
<PAGE>
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERWRITER TO BE PURCHASED
<S> <C>
Morgan Stanley & Co. Incorporated 2400000
BT Alex. Brown Incorporated 75000
A.G. Edwards & Sons, Inc. 75000
EVEREN Securities, Inc. 75000
Interstate/Johnson Lane Corporation 75000
Legg Mason Wood Walker, Incorporated 75000
Morgan Keegan & Company, Inc. 75000
CIBC Oppenheimer Corp. 75000
The Robinson-Humphrey Company, LLC 75000
Tucker Anthony Incorporated 75000
Wheat First Securities, Inc. 75000
Cowen & Company 50000
Crowell, Weeden & Co. 50000
Dain Bosworth Incorporated 50000
Fahnestock & Co. Inc. 50000
First Albany Corporation 50000
H.J. Meyers & Co., Inc. 50000
J.J.B. Hilliard, W.L. Lyons, Inc. 50000
Janney Montgomery Scott Inc. 50000
Josepthal, Lyon & Ross, Incorporated 50000
McGinn, Smith & Co., Inc. 50000
Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corporation 50000
Piper Jaffray Inc. 50000
Raymond James & Associates, Inc. 50000
Roney & Co., L.L.C. 50000
Scott & Stringfellow, Inc. 50000
Sutro & Co. Incorporated 50000
US Clearing Corp. 50000
Total....... 4000000
</TABLE>
[Letterhead of Hull, Towill, Norman & Barrett, P.C.]
February 13, 1998
Merry Land & Investment Company, Inc.
624 Ellis Street
Augusta, Georgia 30901
RE: 4,000,000 Shares of 7.625% Series E Cumulative Redeemable Preferred
Stock of Merry Land & Investment Company, Inc.
Gentlemen:
We have acted as counsel for the Company in connection with its publis
offering of 4,000,000 shares of 7.625% Series E Cumulative Redeemable Preferred
Stock, as described in the Prospectus Supplement dated February 4, 1998 to that
Prospectus dated January 22, 1996, filed with Registration Statement No. 33-
65067. This opinion is given to the Company in connection with this offering.
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 E
Preferred Stock have been taken.
3. The Series E 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.
We hereby consent to the filing of this opinion as an exhibit to the Form
8-K filed with respect to the above-referenced offering and reference to this
opinion in the Prospectus Supplement.
/s/
HULL, TOWILL, NORMAN
& BARRETT, P.C.
[Letterhead of Hull, Towill, Norman & Barrett, P.C.]
February 13, 1998
Merry Land & Investment Company, Inc.
624 Ellis Street
Augusta, Georgia 30901
RE: 4,000,000 Shares of 7.625% Series E Cumulative Redeemable
Preferred Stock of Merry Land & Investment Company, Inc.
Gentlemen:
We have acted as counsel for the Company in connection with its public
offering of 4,000,000 shares of 7.625% Series E Cumulative Redeemable Preferred
Stock, as described in the Prospectus Supplement dated February 4, 1998 to that
Prospectus dated January 22, 1996, filed with Registration Statement No. 33-
65067. This opinion is given to the Company in connection with this offering.
In rendering the opinions expressed herein, we have examined such
documents as we have deemed appropriate, including without limitation, the
Company's Registration Statement and the amendments thereto; the Prospectus
dated February 4, 1998; 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.
We are of the opinion that:
(i) the Company met the requirements for qualification and taxation as
a real estate investment trust ("REIT") for the taxable years 1991 through
1997.
(ii) the Company's diversity of stock ownership and proposed method of
operation should allow it to qualify as a REIT for 1998; and
(iii) the discussion contained under the caption "Taxation" in the
Prospectus contained in the Registration Statement, accurately reflects
existing law and fairly addresses the material federal income tax issues
described therein.
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 above-referenced offering and reference to this
opinion in the Prospectus Supplement.
/s/
HULL, TOWILL, NORMAN
& BARRETT, P.C.
