MERRY LAND & INVESTMENT COMPANY, INC.
Series D Cumulative Redeemable Preferred Stock
Underwriting Agreement
December 5, 1996
X.X. Xxxxxx Securities, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
Merry Land & Investment Company, Inc., a Georgia corporation (the "Company"),
proposes to issue and sell to X.X. Xxxxxx Securities, Inc. (the "Underwriter"),
1,000,000 shares of 8.29% Series D Cumulative Redeemable Preferred Stock having
the terms set forth on Schedule I hereto (the "Securities").
The Company has prepared and filed with the Securities and Exchange Commission
(the "Commission") in accordance with the provisions of Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement (the file number
of which is set forth in Schedule I hereto) on Form S-3, relating to certain
securities (the "Shelf Securities") to be issued from time to time by the
Company. The Company also has filed with, or proposes to file with, the
Commission pursuant to Rule 424 under the Securities Act a prospectus supplement
specifically relating to the Securities. The registration statement as amended
to the date of this Agreement is hereinafter referred to as the "Registration
Statement" and the related prospectus covering the Shelf Securities in the form
first used to confirm sales of the Securities is hereinafter referred to as the
"Basic Prospectus". The Basic Prospectus as supplemented by the prospectus
supplement specifically relating to the Securities in the form first used to
confirm sales of the Securities is hereinafter referred to as the "Prospectus".
Any reference in this Agreement to the Registration Statement, the Basic
Prospectus, any preliminary form of Prospectus (a "preliminary prospectus")
previously filed with the Commission pursuant to Rule 424 or the Prospectus
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities Act which were
filed under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Exchange Act") on
or before the date of this Agreement or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be; and any reference
to "amend," "amendment" or "supplement" with respect the Registration Statement,
the Basic Prospectus, any preliminary prospectus or the Prospectus shall be
deemed to refer to and inclde any documents filed under the Exchange Act after
the date of this Agreement, or the date of the Basic Prospectus, any preliminary
prospectus or the Prospectus, as the case may be, which are deemed to be
incorporated by reference therein.
The Company hereby agrees with the Underwriter as follows:
1. The Company agrees to issue and sell the Securities to the Underwriter as
hereinafter provided and the Underwriter, on the basis of the representations
and warranties herein contained, but subject to the conditions hereinafter
stated, agrees to purchase from the Company the Securities at a purchase price
set forth on Schedule I hereto.
2. The Company understands that the Underwriter intends (i) to make a public
offering of the Securities and (ii) initially to offer the Securities upon the
terms set forth in the Prospectus.
3. Payment for the Securities shall be made to the Company or to its order in
immediately available funds on the date and at the time and place set forth in
Schedule I hereto (or at such other time and place on the same or such other
date, not later than the third Business Day thereafter, as the Underwriter and
the Company may agree in writing). Such payment will be made upon delivery to
the Underwriter of the Securities registered in such names and in such
denominations as the Underwriter shall request not less than two full Business
Days prior to the date of delivery, with any transfer taxes payable in
connection with transfer to the Underwriter duly paid by the Company. As used
herein, the term "Business Day" means any day other than a day on which banks
are permitted or required to be closed in New York City. The time and date of
such payment and delivery with respect to the Securities are referred to herein
as the Closing Date. The certificates for the Securities will be made available
for inspection and packaging by you by 1:00 P.M. on the Business Day prior to
the Closing Date at such place in New York City as you and the Company shall
agree.
4. The Company represents and warrants to the Underwriter that:
(a) the Registration Statement has been declared effective by the
Commission under the Securities Act; no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for that purpose
has been instituted or, to the knowledge of the Company, threatened by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) comply, or will comply, as the case may be, in all material respects
with the Securities Act, and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as of the
date of the Prospectus and any amendment or supplement thereto, contain any
untrue statement of a material fact or 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, and the
Prospectus, as amended or supplemented at the Closing Date, 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 foregoing
representations and warranties shall not apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information relating to the Underwriter furnished to the Company in writing
by the Underwriter expressly for use therein;
(b) the documents incorporated by reference in the Prospectus, when they
were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and incorporated
by reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements of the
Exchange Act, as applicable, and will not contain an 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;
(c) the financial statements and the related notes thereto, included or
incorporated by reference in the Registration Statement and the Prospectus,
present fairly the financial position of the Company as of the dates indicated
and the results of its operations and the changes in its cash flows for the
periods specified; [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;] the foregoing financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis, and the supporting schedules included or incorporated by reference in the
Registration Statement or the Prospectus present fairly the information required
to be stated therein; 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; and the pro forma
financial information, if any, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the Prospectus has
been prepared in accordance with the applicable requirements of the Securities
Act and the Exchange Act, as applicable;
(d) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects, management,
properties, financial position, stockholders" equity or results of operations of
the Company, otherwise than as set forth or contemplated in the Prospectus; and
except as set forth or contemplated in the Prospectus the Company has not
entered into any transaction or agreement (whether or not in the ordinary course
of business) material to the Company;
(e) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of its incorporation,
with power and authority (corporate and other) to own or lease its properties
and conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole; except for investments in securities as described
in the Registration Statement or Prospectus, the Company has no equity or other
interest in, or rights to acquire, an equity or other interest in any
corporation, partnership, trust or other entity; the subsidiary entities of the
Company identified on Schedule II hereto (the "Subsidiaries") have been duly
organized and are validly existing as corporations or limited partnerships, as
the case may be, in good standing under the laws of their states of
organization, and have been duly qualified as foreign corporations or limited
partnerships, as the case may be, for the transaction of business and are in
good standing under the laws of each other jurisdiction in which they own or
lease properties, or conduct any business, so as to require such qualification,
other than where the failure to be so qualified or in good standing would not
have a material adverse effect on the Company and the Subsidiaries taken as a
whole; except for investments in securities as described in the Registration
Statement or Prospectus, the Subsidiaries have no equity or other interest in,
or rights to acquire, an equity or other interest in any corporation,
partnership, trust or other entity;
(f) this Agreement has been duly authorized, executed and delivered by the
Company and constitutes the valid and legally binding obligation of the Company
enforceable in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by applicable law;
(g) 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;
(h) the Securities have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform to the
description of the Series D Cumulative Redeemable Preferred Stock contained in
the Prospectus; and the terms of the Articles of Amendment with respect to the
Securities (the "Articles of Amendment"), will be valid and binding on the
Company; and 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 Securities;
(i) neither the Company nor any of the Subsidiaries is, nor with the
giving of notice or lapse of time or both would be, in violation of or in
default under, their respective Articles of Incorporation, By-Laws or formation
documents or any indenture, mortgage, deed of trust, loan agreement or other
agreement or other instrument or obligation to which the Company or any
Subsidiary is a party or by which they or any of their properties are bound,
except for violations and defaults which individually and in the aggregate are
not material to the Company or to the holders of the Securities; the issue and
sale of the Securities, by the Company and the compliance by the Company with
all of the provisions of the Articles of Amendment and provisions of this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to which the
Company or any Subsidiary is a party or by which the Company or any Subsidiary
is bound or to which any of the property or assets of the Company or any
Subsidiary is subject, nor will any such action result in any violation of the
provisions of the Articles of Incorporation or the By-Laws of the Company or any
applicable law or 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 Securities or the consummation by the
Company of the transactions contemplated by this Agreement, except the filing of
the Articles of Amendment with the Secretary of State of Georgia and such
consents, approvals, authorizations, registrations or qualifications as have
been obtained under the Securities Act, and as may be require under state
securities or Blue Sky Laws in connection with the purchase and distribution of
the Securities by the Underwriter;
(j) other than as set forth or contemplated in the Prospectus, there are
no legal or governmental proceedings pending or, to the knowledge of the
Company, threatened to which the Company or any Subsidiary is or may be a party
or to which any property of the Company or any Subsidiary is or may be the
subject which, if determined adversely to the Company, could individually or in
the aggregate reasonably be expected to have a material adverse effect on the
general affairs, business, prospects, management, properties, financial
position, stockholders" equity or results of operations of the Company and, to
the best of the Company"s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others; and there are
no contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required;
(k) 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;
(l) the Company has filed all Federal, State and foreign income tax
returns which have been required to be filed and have paid all taxes indicated
by said returns and all assessments received by it to the extent that such taxes
have become due and are not being contested in good faith;
(m) the Company and the Subsidiaries hold all material licenses,
certificates and permits from governmental authorities which are necessary to
the conduct of their business; and the Company has not infringed any patents,
patent rights, trade names, trademarks or copyrights, which infringement is
material to the business of the Company;
(n) Xxxxxx Xxxxxxxx LLP, which has 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 Securities Act;
(o) the Company has never been, is not now, and immediately after the sale
of the Securities 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;
and
(r) the Company"s Common Stock, its Series A Cumulative Convertible
Preferred Stock and Series C Cumulative Convertible Preferred Stock are listed
on the New York Stock Exchange.
5. The Company covenants and agrees with the Underwriter as follows:
(a) to file the Prospectus in a form approved by you pursuant to Rule 424
under the Securities Act not later than the Commission"s close of business on
the second Business Day following the date of determination of the offering
price of the Securities;
(b) to deliver to the Underwriter and counsel for the Underwriter, at the
expense of the Company, a signed copy of the Registration Statement (as
originally filed) and each amendment thereto, in each case including exhibits
and documents incorporated by reference therein and, during the period mentioned
in paragraph (e) below, to the Underwriter as many copies of the Prospectus
(including all amendments and supplements thereto) and documents incorporated by
reference therein as you may reasonably request, when filed with Commission;
(c) from the date hereof and prior to the Closing Date, to furnish to you
a copy of any proposed amendment or supplement to the Registration Statement or
the Prospectus, for your review, and not to file any such proposed amendment or
supplement to which you reasonably object;
(d) to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Securities, and during such same period, to advise you promptly, and to
confirm such advice in writing, (i) when any amendment to the Registration
Statement shall have become effective, (ii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation or threatening of any proceeding for that purpose,
and (iv) of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Securities for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its best efforts to prevent the issuance of any such stop
order or notification and, if issued, to obtain as soon as possible the
withdrawal thereof;
(e) to prepare and file Articles of Amendment setting forth the terms of
the Securities on a basis consistent with the terms set forth on Schedule I
hereto (and otherwise in a form reasonably acceptable to the Underwriter and its
counsel) and file the same with the Secretary of State of Xxxxxx on or before
the Closing Date;
(f) if, during such period after the first date of the public offering of
the Securities as in the opinion of counsel for the Underwriter a prospectus
relating to the Securities is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur 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 it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare and furnish,
at the expense of the Company, to the Underwriter and to the dealers (whose
names and addresses you will furnish to the Company) to which Securities may
have been sold by you on behalf of the Underwriter and to any other dealers upon
request, such amendments or supplements to the Prospectus as may be necessary 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 will comply with law;
(g) to endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request and to continue such qualification in effect so long as reasonably
required for distribution of the Securities and to pay all fees and expenses
(including fees and disbursements of counsel to the Underwriter) reasonably
incurred in connection with such qualification and in connection with the
determination of the eligibility of the Securities for investment under the laws
of such jurisdictions as you may designate; provided that the Company shall not
be required to file a general consent to service of process in any
jurisdiction;
(h) to make generally available to its security holders and to you as soon
as practicable but not later than 15 months after the effective date of the
Registration Statement (as defined in Rule 158(c)) an earnings statement
covering a period of at least twelve months beginning with the first fiscal
quarter of the Company occurring after the effective date of the Registration
Statement, which shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 of the Commission promulgated thereunder;
(i) so long as the Securities are outstanding, to furnish to you copies of
all reports or other communications (financial or other) furnished to holders of
Securities, and copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange;
(j) during the period beginning on the date hereof and continuing to and
including the Business Day following the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any securities of the Company which are
substantially similar to the Securities without your prior written consent; and
(k) to pay all costs and expenses incident to the performance of its
obligations hereunder, including without limiting the generality of the
foregoing, all costs and expenses (i) incident to the preparation, issuance,
execution and delivery of the Securities, (ii) incident to the preparation,
printing and filing under the Securities Act of the Registration Statement, the
Prospectus and any preliminary prospectus (including in each case all exhibits,
amendments and supplements thereto), (iii) incurred in connection with the
registration or qualification and determination of eligibility for investment of
the Securities under the laws of such jurisdictions as the Underwriter may
designate (including fees of counsel for the Underwriter and their
disbursements), (iv) in connection with the listing of the Securities on any
stock exchange, (v) related to any filing with National Association of
Securities Dealers, Inc., (vi) in connection with the printing (including word
processing and duplication costs) and delivery of this Agreement, the
Preliminary and Supplemental Blue Sky Memoranda and any Legal Investment Survey
and the furnishing to Underwriter of copies of the Registration Statement and
the Prospectus, including mailing and shipping, as herein provided and (vii)
payable to rating agencies in connection with the rating of the Securities.
6. The obligations of the Underwriter hereunder shall be subject to the
following conditions:
(a) the representations and warranties of the Company contained herein are
true and correct on and as of the Closing Date as if made on and as of the
Closing Date and the Company shall have complied with all agreements and all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date;
(b) the Prospectus shall have been filed with the Commission pursuant to
Rule 424 within the applicable time period prescribed for such filing by the
rules and regulations under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to your satisfaction;
(c) subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have occurred any downgrading, nor shall
any notice have been given of (i) any intended or potential downgrading or (ii)
any review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization", as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act;
(d) since the respective dates as of which information is given in the
Prospectus there shall not have been any material adverse change or any
development involving a material adverse change, in or affecting the general
affairs, business, prospects, management, properties, financial position,
stockholders" equity or results of operations of the Company and the
Subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, the effect of which in the judgment of the Underwriter makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in the
Prospectus;
(e) the Underwriter shall have received on and as of the Closing Date a
certificate of an executive officer of the Company satisfactory to you to the
effect set forth in subsections (a) through (c) of this Section and to the
further effect that there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, business, prospects, management, properties, financial
position, stockholders" equity or results of operations of the Company and the
Subsidiaries taken as a whole from that set forth or contemplated in the
Registration Statement;
(f) Hull, Xxxxxx, Xxxxxx & Xxxxxxx, P.C., counsel for the Company, shall
have furnished to you its written opinion, dated the Closing Date, in form and
substance satisfactory to you, 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 its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus as then
amended or supplemented;
(ii) the Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure to
be so qualified or in good standing would not have a material adverse effect on
the Company;
(iii) the Subsidiaries have been duly organized and are validly
existing as corporations or limited partnerships, as the case may be, in good
standing under the laws of their jurisdictions of organization, with power and
authority to own their properties and conduct their business as described in the
Prospectus as amended or supplemented;
(iv) the Subsidiaries have been duly qualified as foreign corporations
or limited partnerships, as the case may be, for the transaction of business and
are in good standing under the laws of each other jurisdiction in which they own
or lease properties, or conduct any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company;
(v) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the best of such
counsel"s knowledge, threatened to which the Company or the Subsidiaries is or
may be a party or to which any property of the Company or the Subsidiaries is or
may be the subject which, if determined adversely to the Company or the
Subsidiaries, could individually or in the aggregate reasonably be expected to
have a material adverse effect on the general affairs, business, prospects,
management, properties, financial position, stockholders" equity or results of
operations of the Company; to the best of such counsel"s knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others; and such counsel does not know of any contracts or other
documents of a character required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration Statement or the
Prospectus which are not filed or described as required;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company, except as
rights to indemnity and contribution hereunder may be limited by applicable
law;
(vii) the Securities have been duly and validly authorized, and
when issued and delivered to and paid for by the Underwriter in accordance with
the terms of this Agreement, will be duly and validly issued and fully paid and
nonassessable and will conform to the description thereof contained in the
Prospectus; and the terms of the Articles of Amendment with respect to the
Securities are valid and binding on the Company; and 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 Securities;
(viii) neither the Company nor the Subsidiaries are, nor with the
giving of notice or lapse of time or both would be, in violation of or in
default under, their respective Articles of Incorporation or By-Laws or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of the Subsidiaries
is a party or by which they or any of their respective properties are bound,
except for violations and defaults which individually and in the aggregate are
not material to the Company or to the holders of the Securities; the issue and
sale of the Securities and the compliance by the Company with the provisions of
the Articles of Amendment with respect to the Securities and provisions of this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument known to such
counsel to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary is bound or to which any of the property or assets of
the Company or any Subsidiary is subject, nor will any such action result in any
violation of the provisions of the Articles of Incorporation or the By-Laws of
the Company or any applicable law or 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;
(ix) the Company has authorized and outstanding stock as set forth
under the caption "Capitalization" in the Prospectus;
(x) each consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body necessary in
connection with the issuance and sale of the Securities or the consummation of
the other transactions contemplated by this Agreement, (except such consents,
approvals, authorizations, registrations or qualifications as have been obtained
and as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the Underwriter) has
been obtained or made and is in full force and effect;
(xi) the statements in the Prospectus under the captions "Description
of Series D Preferred Stock," "Description of Securities," "Description of Debt
Securities," "Description of Common Stock," "Description of Preferred Stock,"
"Description of Common Stock Warrants," and "Description of Depositary Shares"
in the Prospectus and each document incorporated by reference from Item 3 of
Part 1 of the Company"s Annual Report on Form 10-K for the year ended December
31, 1995 and in the Registration Statement in Item 15, insofar as such
statements constitute a summary of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with respect to
such legal matters, documents or proceedings;
(xii) such counsel (A) is of the opinion that each document
incorporated by reference in the Registration Statement and the Prospectus
(except for the financial statements included therein as to which such counsel
need express no opinion) complied as to form in all material respects with the
Exchange Act when filed with Commission, (B) believes that (except for the
financial statements included therein as to which such counsel need express no
belief) each part of the Registration Statement (including the documents
incorporated by reference therein) filed with the Commission pursuant to the
Securities Act relating to the Securities, when such part became effective, did
not 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, (C) is of the opinion that the Registration Statement and the
Prospectus and any amendments and supplements thereto (except for the financial
statement included therein as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Securities Act and (D) believes that (except for the financial statements
included therein as to which such counsel need express no belief) the
Registration Statement and the Prospectus, on the date of this Agreement, did
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, and that the Prospectus as amended or supplemented, if
applicable, does not contain any untrue statement of a material fact or omit 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; and
(xiii) 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 opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the States 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 Underwriter"s counsel) of other counsel
reasonably acceptable to the Underwriter"s 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 Underwriter and they are justified in relying thereon. With respect to the
matters to be covered in subparagraph (xiii) above counsel may state its opinion
and belief is based upon their participation in the preparation of the
Registration Statement and the Prospectus and any amendment or supplement
thereto (other than the documents incorporated by reference therein) and review
and discussion of the contents thereof (including the documents incorporated by
reference therein) but is without independent check or verification except as
specified.
(g) Hull, Xxxxxx, Xxxxxx & Xxxxxxx, 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 1990, 1991,
1992, 1993, 1994 and 1995 ;
(iii) the discussion contained under the caption "Taxation " in
the Prospectus forming a part of the Registration Statement, accurately reflects
existing law and fairly addresses the material federal income tax issues
described therein.
In rendering such opinions, Hull, Xxxxxx, Xxxxxx & Xxxxxxx, 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,
Xxxxxx, Xxxxxx & Xxxxxxx, 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.
(h) on the Closing Date, Xxxxxx Xxxxxxxx LLP shall have furnished to you
letters, dated such date, in form and substance satisfactory to you, containing
statements and information of the type customarily included in accountants
"comfort letters" to Underwriter with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus;
(i) on the Closing Date, Xxxxxx Xxxxxxxx LLP shall have furnished to you a
letter confirming the matters set forth in clauses (i) and (ii) of subparagraph
(g) of this Section 6;
(j) you shall have received on and as of the Closing Date an opinion of
Piper & Marbury L.L.P., counsel to the Underwriter, with respect to the validity
of the Securities, the Registration Statement, the Prospectus and other related
matters as the Underwriter may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters; and
(k) on or prior to the Closing Date, the Company shall have furnished to
the Underwriter such further certificates and documents confirming the
representations and warranties contained herein and related matters as the
Underwriter shall reasonably request.
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 Underwriter and to Piper & Marbury L.L.P., counsel
for the Underwriter.
7. The Company agrees to indemnify and hold harmless the Underwriter and each
person, if any, who controls the Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including without
limitation the legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) caused by any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, 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 untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use therein; provided, that the foregoing indemnity
with respect to any preliminary prospectus shall not inure to the benefit of the
Underwriter (or to the benefit of any person controlling the Underwriter) from
whom the person asserting any such losses, claims, damages or liabilities
purchased Securities if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary prospectus is eliminated or
remedied in the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) and, if required by law, a copy
of the Prospectus (as so amended or supplemented) shall not have been furnished
to such person at or prior to the written confirmation of the sale of such
Securities to such person.
The Underwriter agrees, to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person who
controls the Company within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to the Underwriter, but only with reference to information
relating to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding,
any Indemnified Person 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
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person 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 Person shall not, in connection with any
proceeding or related proceeding 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 Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriter
and such control persons of Underwriter shall be designated in writing by the
Underwriter and any such separate firm for the Company, its directors, its
officers who sign the Registration Statement and such cntrol persons of the
Company or authorized representatives shall be designated in writing by the
Company. The Indemnifying Person 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
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person 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 Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first and second paragraphs of this
Section 7 is unavailable to an Indemnified Person in respect of any losses,
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person 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 Underwriter on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause (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 (i) above but also the relative
fault of the Company on the one hand and the Underwriter on the other 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 Underwriter on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering of such Securities (before
deducting expenses) received by the Company and the total underwriting discounts
and the commissions received by the Underwriter bear to the aggregate public
offering price of the Securities. The relative fault of the Company on the one
hand and the Underwriter on the other 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 Underwriter and the parties"
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person 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 incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall the Underwriter be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that the 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 indemnity and contribution agreements contained in this Section 7 are in
addition to any liability which the Indemnifying Persons may otherwise have to
the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 7 and the
representations, warranties and covenants of the Company set forth 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 the Underwriter or any person controlling the Underwriter or by or on behalf
of the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be terminated
in the absolute discretion of the Underwriter, by notice given to the Company,
if after the execution and delivery of this Agreement and prior to the Closing
Date (i) there shall have occurred, 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, properties, management or business
prospects of the Company, whether or not arising in the ordinary course of
business, (ii) 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 Options Exchange, the Chicago Mercantile Exchange or the Chicago
Board of Trade, (iii) trading of any securities of or guaranteed by the Company
shall have been suspended on any exchange or in any over-the-counter market,
(iv) a general moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State authorities; (v) there
has occurred any downgrading in the rating of the Company"s debt securities by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Exchange Act) nor has any notice been given of
any intended or potential downgrading or any review or possible change that does
not indicate an improvement in the rating accorded any securities of or
guaranteed by the Company by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; or (vi) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in the judgment of the Underwriter, is material and adverse and which, in the
judgment of the Underwriter, makes it impracticable to market the Securities on
the terms and in the manner contemplated in the Prospectus.
9. If, on the Closing Date, the Underwriter shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of 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 the Underwriter from
liability in respect of any default of the Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriter 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 or any
condition of the Underwriter"s obligations cannot be fulfilled, the Company
agrees to reimburse the Underwriter for all out-of-pocket expenses (including
the fees and expenses of their counsel) reasonably incurred by the Underwriter
in connection with this Agreement or the offering of Securities.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriter, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Securities
from the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriter shall be given at 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Notices to the Company shall be given to it
at Merry Land & Investment Company, Inc., 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx
00000, Attention: X. Xxxxxxx Houston.
13. Miscellaneous. This Agreement may be signed in counterparts, each of which
shall be an original and 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 New York, without giving effect to the conflicts
of laws provisions thereof.
Very truly yours,
MERRY LAND & INVESTMENT COMPANY, INC.
By:_______________________________________
Name: X. Xxxxxxx Houston
Title: Acting Chief Executive Officer
Accepted: December 5, 1996
X.X. XXXXXX SECURITIES INC.
By:______________________________
Name:
Title:
SCHEDULE I
Underwriter: X.X. Xxxxxx Securities Inc.
Underwriting Agreement
dated: December 5, 1996
Registration Statement No.: 33-65067
Title of Securities: 8.29% Series D Cumulative
Redeemable Preferred Stock
Amount: 1,000,000 shares
Price to Public: $50.00
Underwriting Discount: 2.5%
Dividends: Cumulative from date of issue at 8.29% per annum
Dividend Dates: March 31, June 30, September 30, December 31
Redemption Provisions: Not redeemable prior to December 10, 2026, after
which redeemable at the option of the Company at
$50.00 plus accrued and unpaid dividends, solely
from the proceeds of the sale of capital stock
Liquidation Preference: $50.00 per share plus accrued and unpaid
dividends
Voting Rights: None, except if dividends in arrears for six
quarterly periods (whether or not consecutive)
Ranking: Senior to common; on parity with Company"s
existing preferred stock
Other Provisions: Not convertible or exchangeable
Closing Date and
Time of Delivery: December 10, 1996, 10:00 a.m.
Closing Location: Piper & Marbury L.L.P.
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Address for Notices
to Underwriter: c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SCHEDULE II
Subsidiaries
ML Apartments Limited
Merry Land Apartment Communities, Inc.
ML Texas Apartments L.P.
ML North Carolina Apartments, L.P.
ML Tennessee Apartments, L.P.
ML Alabama Apartments, Inc.
