EXHIBIT 10.1(f)
SOUTHERN STATES CAPITAL TRUST I
Step-Up Rate Capital Securities, Series A
(Liquidation Amount $1,000 Per Capital Security)
guaranteed to the extent set forth in the Guarantee by
SOUTHERN STATES COOPERATIVE, INCORPORATED
and
Step-Up Rate Series B Cumulative Redeemable Preferred Securities
(Liquidation Amount $1,000 Per Preferred Security)
Issued by
SOUTHERN STATES COOPERATIVE, INCORPORATED
_____________________________________
Purchase Agreement
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October 5, 1999
Gold Xxxx Inc.
000 Xxxxxxxxx Xxxxxx Xxxxxxx, X.X.
Atlanta, Georgia 30346-2397
Gentlemen:
Pursuant to the commitment letter dated October 13, 1998, by and
between Gold Xxxx Inc. ("Gold Xxxx") and Southern States Cooperative,
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Incorporated, and the Terms Sheet attached thereto, as amended by letter dated
March 29, 1999 (the "Commitment Letter"), Southern States Capital Trust I, a
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statutory business trust formed under the laws of the State of Delaware (the
"Trust"), and Southern States Cooperative, Incorporated, an agricultural
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cooperative corporation organized under the laws of Virginia, as depositor of
the Trust and as guarantor (the "Company"), agree, subject to terms and
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conditions stated herein, that the Trust will issue and sell to Gold Xxxx Inc.
(the "Purchaser") an aggregate of $60,000,000 liquidation amount of Step-Up Rate
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Capital Securities, Series A (liquidation amount $1,000 per capital security)
(the "Capital Securities") representing undivided beneficial interests in the
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assets of the Trust, guaranteed on a subordinated basis by the Company as to the
payment of distributions and as to payments on liquidation or redemption, to the
extent set forth in a guarantee agreement (the "Guarantee") between the Company
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and First Union National Bank, as trustee (the "Guarantee Trustee"). The Trust
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is to purchase, with the proceeds of the sale of the Capital Securities and
$1,856,000 liquidation amount of its Common Securities (liquidation amount
$1,000 per common security) (the "Common Securities" and together with the
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Capital Securities, the "Trust Securities"), $61,856,000 aggregate principal
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amount of Step-Up Rate Junior Subordinated Deferrable Interest Debentures due
September 30, 2029 (the "Debentures") of the Company, to be issued pursuant to a
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Junior Subordinated Indenture (the "Indenture") between the Company and First
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Union National Bank, as trustee (the "Debenture Trustee").
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The Company will be the holder of 100% of the Common Securities. The
Trust will be subject to the terms of an Amended and Restated Trust Agreement
(the "Trust Agreement"), among the Company, as depositor, First Union National
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Bank, as Property Trustee ("Property Trustee") and First Union Trust Company,
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National Association, as Delaware Trustee (the "Delaware Trustee"), and two
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individual trustees who are employees or officers of or affiliated with the
Company (the "Administrative Trustees"). The Property Trustee, the Delaware
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Trustee and the Administrative Trustees are collectively referred to herein as
the "Trustees."
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Pursuant to the Commitment Letter, the Company and the Purchaser also
agree, subject to terms and conditions stated herein, that the Company will sell
to the Purchaser 40,000 shares (liquidation preference of $1,000 per share) of
its Step-Up Rate Series B Cumulative Redeemable Preferred Stock, $100 par value
per share (the "Preferred Securities" and together with the Capital Securities,
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the "Securities"). This Purchase Agreement is referred to herein as the
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"Agreement."
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The Securities have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), and are being sold pursuant to this
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Agreement in reliance on the exemption therefrom contained in Section 4(2) of
the Securities Act.
1. Representations, Warranties and Agreements of the Company and the
Trust. The Company and the Trust, jointly and severally, represent and warrant
to, and agree with the Purchaser that as of the date hereof:
(a) The Company has been duly organized and is validly existing and
in good standing under the laws of the Commonwealth of Virginia, is duly
qualified to do business and is in good standing in each jurisdiction in
which its ownership or lease of property or the conduct of its business
requires such qualification, save where the failure to be so qualified
would not reasonably be expected to have a material adverse effect on the
business or property of the Company, and has all power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged and the authorized capital stock of Company consists of
(i) 20,000,000 shares of common stock of which 12,057,177 were issued and
outstanding as of August 31, 1999, and (ii) 1,000,000 shares of preferred
stock, of which 271 shares of 5% Series Cumulative Preferred Stock were
issued and outstanding as of August 31, 1999, and of which 14,354 shares of
6% Series Cumulative Preferred Stock were issued and outstanding as of
August 31, 1999;
(b) This Agreement has been duly authorized, executed and delivered
by the Company and the Trust;
(c) The issuance of the Securities, and the consummation by the
Company and the Trust of the transactions contemplated herein (the
"Transactions") will not conflict with or result in a breach or violation
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of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or the Trust is a party or by which the
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Company or the Trust is bound or to which any of the properties or assets
of the Company or the Trust is subject, and such actions will not result in
any violation of the provisions of the Amended and Restated Articles of
Incorporation or bylaws of the Company, the governing documents for the
Trust or any statute or order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or the
Trust or any of the properties or assets of either the Company or the
Trust;
(d) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act of
the State of Delaware (the "Delaware Business Trust Act") with the trust
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power and authority to own its property and conduct its business as
contemplated by this Agreement, and has conducted and will conduct no
business other than the Transactions and has no liabilities other than its
obligations in connection with the Transactions;
(e) The Guarantee, the Debentures, the Trust Agreement, the expense
agreement referred to in the Trust Agreement, and the Indenture
(collectively, the "Guarantor Agreements") have each been duly authorized,
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as appropriate, by the Company and the Trust and when validly executed and
delivered by the Company and, in the case of the Guarantee, by the
Guarantee Trustee, in the case of the Trust Agreement, by the Trustees, and
in the case of the Indenture, by the Debenture Trustee, and, in the case of
the Debentures, when validly authenticated and delivered by the Debenture
Trustee, will constitute valid and legally binding obligations of the
Company and of the Trust as parties thereto, enforceable in accordance with
their respective terms, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (whether considered in a proceeding in equity or at law);
(f) The Preferred Securities have been duly and validly authorized
and, when issued and delivered against payment of the consideration
specified in this Agreement, will be duly and validly issued and fully paid
and non-assessable cumulative redeemable preferred stock of the Company,
and will have the rights set forth in the Amendment to the Company's
Articles of Incorporation authorizing the Step-Up Rate Series B Cumulative
Redeemable Preferred Stock;
(g) The Capital Securities have been duly and validly authorized by
the Trust, and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued and fully paid and non-
assessable undivided beneficial interests in the assets of the Trust; the
issuance of the Capital Securities is not subject to preemptive or other
similar rights; the terms of the Capital Securities are valid and binding
on the Trust; and the holders of the Capital Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General Corporation Law
of the State of Delaware;
(h) The financial statements (including in each case the related
schedules and notes) of the Company issued in connection with the period
ending June 30, 1999 fairly
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present in all material respects the consolidated financial position of the
Company and its subsidiaries as of the dates specified therein and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared, in accordance with generally
accepted accounting principles ("GAAP"), consistently applied throughout
the periods involved except as set forth in the notes thereto; and
(i) Neither the Trust, the Company nor any subsidiary of the Company
is an "investment company" within the meaning of such term under the
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Investment Company Act of 1940, as amended, and the rules and regulations
of the Securities and Exchange Commission (the "Commission") thereunder.
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2. Purchase of the Securities by the Purchaser. (a) On the basis of
the representations and warranties herein contained, and subject to the terms
and conditions herein set forth, the Trust agrees to sell to the Purchaser and
the Purchaser agrees to purchase from the Trust, $60,000,000 aggregate
liquidation amount of the Capital Securities at a purchase price equal to 100%
of the liquidation amount of such Capital Securities.
(b) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Purchaser and the Purchaser agrees to purchase from the
Company, $40,000,000 aggregate liquidation amount of the Preferred Securities at
a purchase price equal to 100% of the liquidation amount of such Preferred
Securities.
(c) The Trust shall not be obligated to deliver any of the
Securities, except upon payment for all of the Securities to be purchased as
hereinafter provided.
3. Sale and Resale of the Securities by the Purchaser.
(a) The Purchaser hereby represents and warrants to, and agrees with
the Company and the Trust that it (i) is not acquiring the Securities with
a view to the distribution thereof; (ii) is acquiring the Securities for
its own account and with its general corporate assets and not with the
assets of any separate account in which any employee benefit plan, as those
terms are used in ERISA, has any interest; and (iii) will, when permitted
by the terms of this Agreement and the Securities and if selling within two
years (or such shorter period as is prescribed by paragraph (k) of Rule 144
under the Securities Act as then in effect) after the issuance of the
Securities, sell the Securities only: (1) to persons whom it reasonably
believes to be qualified institutional buyers ("Qualified Institutional
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Buyers") as defined in Rule 144A under the Securities Act, as such rule may
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be amended from time to time ("Rule 144A") or, if any such person is buying
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for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented that each such
account is a Qualified Institutional Buyer, to whom notice has been given
that such sale is being made in reliance on Rule 144A or (2) in
transactions exempt from registration under the Securities Act with
purchasers who execute letters of representation in the form included as
Exhibit A to this Agreement.
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(b) The Purchaser shall hold any Securities purchased by it for a
period of at least nine (9) months from the Closing Date. Upon the
expiration of that period, and subject to Section 3 of this Agreement and
the provisions of the Securities, the Purchaser may, at its election, give
notice to the Company of its desire to sell the Securities, in whole or in
part. Delivery of notice shall commence a 120-day waiting period during
which the Purchaser may not sell or offer to sell the Securities or any
portion thereof without the consent of the Company. Within 10 business
days of the Purchaser giving notice of its desire to sell, the Company
shall advise the Purchaser of its intentions with respect to the placement
or sale of other securities similar to the Securities. If, during the
waiting period, the Company determines not to place or sell any such
similar securities, then the Company shall so advise the Purchaser and the
Company shall not unreasonably refuse to waive the remainder of the waiting
period. Upon the later of (1) expiration of the 120-day waiting period and
(2) termination of a placement of similar securities commenced by the
Company prior to the end of the waiting period, the Purchaser will be free
to transfer the Securities as permitted by law and subject to the transfer
restrictions set forth in the Securities.
(c) The Company will provide such financial and other information and
assistance as may reasonably be required by the Purchaser in its efforts to
resell the Securities.
4. Delivery of and Payment for the Securities.
(a) Payment of the purchase price for, and delivery of, the
Securities shall be made at the offices of the Company, Richmond, Virginia
or at such other place as shall be agreed upon by the Company, the Trust
and you, at 9:30 a.m. (E.D.S.T), on October 5, 1999 (such date and time of
payment and delivery being herein called the "Closing Date").
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(b) On the Closing Date, payment for the Capital Securities shall be
made to or for the account of the Company and the Trust and payment for the
Preferred Securities shall be made to Bank of America, N.A., as
Administrative Agent for the account of the Company, in immediately
available funds by wire transfer to such accounts as the Company shall
specify prior to the Closing Date or by such means as the parties hereto
shall agree prior to the Closing Date against delivery to you of the
certificates evidencing the Securities.
5. Commitment Fee.
(a) Simultaneously with the purchase of the Securities by the
Purchaser, the Company shall pay to the Purchaser a commitment fee equal to
two percent (2%) of the aggregate liquidation amount of the Preferred
Securities and to one percent (1%) of the aggregate liquidation amount of
the Capital Securities. At the Purchaser's request, the Company will apply
the commitment fee with respect to the Capital Securities against the
purchase price to be paid to the Trust for the Capital Securities and will
apply the
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commitment fee with respect to the Preferred Securities against the
purchase price to be paid for the Preferred Securities.
(b) The amount of the commitment fee paid to the Purchaser under
paragraph (a) above shall be refunded, without interest, to the Company on
a pro rata basis upon any redemption, in whole or in part, of the
Securities from the Purchaser so that, for example, if 10% of the Capital
Securities are redeemed, 10% of the commitment fee for the Capital
Securities will be refunded as part of the redemption by the Company.
6. Further Agreements of the Company and the Trust. The Company and
the Trust, jointly and severally, further agree:
(a) So long as the Securities are outstanding and during any period
in which the Company is not subject to and in compliance with Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
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Act"), to furnish to you and any other holders of the Securities and
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prospective purchasers of the Securities designated by such holders, upon
request of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4), as amended, or any
successor thereto, under the Securities Act, in order to permit compliance
by such holder with Rule 144A in connection with the resale of the
Securities by such holder.
(b) In addition to the foregoing obligation, so long as the
Securities are outstanding and during any period in which the Company is
not subject to and in compliance with Section 13 or 15(d) of the Exchange
Act, the Company will also deliver to each holder of Securities:
(i) within 45 days after the end of each quarterly fiscal period
in each fiscal year of the Company (other than the last
quarterly fiscal period of each such fiscal year), duplicate
copies of (A) the consolidated balance sheets of the Company
and its subsidiaries as at the end of such quarter, and (B)
the consolidated statements of income, changes in patrons'
equity and cash flows of the Company and its subsidiaries for
such quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with such
quarter setting forth in each case in comparative form the
figures for the corresponding periods in the previous fiscal
year, all in reasonable detail, prepared, in accordance with
GAAP in each case (provided, however, that such financial
statements shall not be required to contain notes to the
financial statements), and in each case, certified by a senior
financial officer as fairly presenting, in all material
respects, the financial position of the companies being
reported on and their results of operations and cash flows,
subject to changes resulting from audit and year-end
adjustments;
(ii) within 90 days after the end of each fiscal year of the
Company, duplicate copies of (A) the consolidated balance
sheets of the
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Company and its subsidiaries as at the end of such year, and
(B) the consolidated statements of income, changes in
patrons' equity and cash flows of the Company and its
subsidiaries for such year setting forth in comparative form
the figures for the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP (except as noted
therein) accompanied by an opinion thereon of independent
certified public accountants of recognized standing stating
that such financial statements present fairly, in all
material respects, the financial position of the companies
being reported upon and that their results of operations and
cash flows and have been prepared in conformity with GAAP,
and that the examination of such accountants in connection
with such financial statements has been made in accordance
with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances; and
(iii) promptly upon their becoming available, one copy of any (A)
financial statement, report, notice or proxy statement sent
by the Company to public securities holders generally, and
(B) regular or periodic report, registration statement
(without exhibits except as expressly requested by such
holder) and prospectus and all amendments thereto filed by
the Company with the Commission.
The Company agrees to acknowledge the obligation in this Section 6(b) in
writing to any proposed holder of Securities or to any holder of Securities
at any time and from time to time by a separate instrument in writing.
This provision is for the benefit of each holder of Securities and each
such holder shall be entitled to require compliance herewith.
(c) To permit the Purchaser and the representatives of each holder of
Securities that is an institutional investor at the expense of such holder
and upon reasonable prior notice to the Company to visit the principal
executive office of the Company to discuss the affairs, finances and
accounts of the Company and its subsidiaries with their officers, and (with
the consent of the Company which consent will not be unreasonably withheld)
independent public accountants, and to visit the other offices and
properties of the Company and each subsidiary, all at such reasonable times
and as often as may be reasonably requested in writing; and if a Default or
Event of Default then exists, at the expense of the Company to visit and
inspect any of the offices or properties of the Company or any subsidiary,
to examine all their respective books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers
and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts
of the Company and its subsidiaries), all at such times and as often as may
be requested.
(d) Upon the request of the Purchaser or any other holder of the
Securities that is an institutional investor, to use their best efforts to
permit the Securities to be designated Private Offerings, Resales and
Trading through Automated Linkages Market
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("PORTAL") securities in accordance with the rules and regulations adopted
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by the National Association of Securities Dealers, Inc. relating to trading
in the PORTAL Market and to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company (the "DTC").
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(e) Not to, and the Company will cause its affiliates not to, solicit
any offer to buy or offer to sell the Securities by means of any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
(f) To take such steps as shall be necessary to ensure that neither
the Trust, the Company nor any subsidiary of the Company shall become an
"investment company" within the meaning of such term under the Investment
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Company Act of 1940 and the rules and regulations of the Commission
thereunder.
(g) To continue, for as long as Gold Xxxx holds any of the Securities
purchased hereunder, but in no event for more than 60 months from the date
of this Agreement, with all good faith reasonable efforts to place on terms
and conditions reasonably satisfactory to Company, through one or more of
the markets referenced below a minimum of $40 million of perpetual
preferred and a minimum of $60 million of capital securities substantially
similar to the Securities. The Company shall pursue its efforts through:
(A) the Rule 144A market, (B) the private placement market, and/or (C) one
or more registered public offerings of trust preferred and/or preferred
stock.
(h) Subject to the provisions of this subsection 6(h), to use
commercially reasonable efforts to seek and obtain an investment grade
rating (or, at the request of Gold Xxxx, a non-investment grade rating) of
the Securities from two or more nationally recognized statistical rating
organizations such as Standard & Poor's Rating Services, a division of
XxXxxx-Xxxx, Xxxxx'x Investor Service, Duff & Xxxxxx Rating Co. and Fitch
Investor Services, and at the request of Gold Xxxx, to take all
commercially reasonable actions and make all filings and reports necessary
or appropriate to maintain a rating. In either case, however, if the
Company believes that obtaining a non-investment grade rating or
maintaining a rating (when the Company has been advised by the rating
agency that such rating will be downgraded to a non-investment grade
rating) would adversely affect the Company or its securities and advises
Gold Xxxx of the reasons for its belief, the Company has the right not to
pursue such a rating; provided, however, that if Gold Xxxx is of a contrary
opinion and advises the Company of the reasons for its belief, and the
Company does not concur with Gold Xxxx, then the Company will undertake to
secure an opinion of a nationally recognized investment banking firm not
otherwise then performing services for either the Company or Gold Xxxx with
respect to whether obtaining a non-investment grade rating or whether
maintaining a rating (when the Company has been advised that such rating
will be downgraded to a non-investment grade rating) would adversely affect
the Company or the Company's securities. In the event such an investment
banking firm concludes that obtaining a non-investment grade rating or
maintaining a rating that would be downgraded to a non-investment grade
rating
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would adversely affect the Company or its securities, then the Company
shall not be required to pursue such a rating at that time. If an
investment banking firm shall be engaged for the purpose of providing an
opinion referred to in this Section 6(h), the firm shall be mutually agreed
upon by the Company and Gold Xxxx. The Company shall pay the expense of
such opinion; provided, however, that Gold Xxxx shall reimburse the Company
for the costs incurred in securing such opinion unless the opinion of such
firm is to the effect that obtaining a non-investment grade rating or that
maintaining a rating (when the Company has been advised that such rating
will be downgraded to a non-investment grade rating) would not adversely
affect the Company or its securities. In no circumstances, however, shall
the Company be required to seek a rating more than once or an investment
banking opinion more than twice under this Section 6(h) in any rolling 12-
month period beginning July 1, 2000. For purposes of this Section 6(h), the
term "adversely affect" shall be construed to mean adverse effects having
more than an immaterial or insubstantial effect.
7. Expenses. The Company and the Trust, jointly and severally,
agree to pay (i) the costs incident to the sale and delivery of the Securities
and any taxes payable in that connection; (ii) all fees and expenses, if any,
incurred in connection with the admission of such Securities for trading in
PORTAL; and (iii) all other costs and expenses incident to the performance of
the obligations of the Company and the Trust, respectively.
8. Conditions to the Purchaser's Obligations. The obligations of the
Purchaser hereunder are subject to the accuracy, on the Closing Date, of the
representations and warranties of the Company and the Trust, contained herein,
to the performance by the Company and the Trust of their obligations hereunder,
and to each of the following additional terms and conditions:
(a) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Guarantor
Agreements, the Securities, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be satisfactory in
all respects to counsel for the Purchaser, and the Company and the Trust
shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(b) Xxxx & Xxxxxxxxx, L.L.P. shall have furnished to the Purchaser
their written opinion, as counsel to the Company and the Trust, addressed
to the Purchaser and dated the Closing Date, in form and substance
reasonably satisfactory to the Purchaser, to the effect set forth in
Exhibit B hereto and to such further effect as counsel to the Purchaser may
reasonably request.
(c) Xxxxxx Xxxxxxxx & Xxxxxxx LLP shall have furnished to the
Purchaser their written opinion, as Delaware counsel to the Company and the
Trust, addressed to the Purchaser and dated the Closing Date, in form and
substance reasonably satisfactory to the Purchaser, to the effect set forth
in Exhibit C hereto and to such further effect as counsel to the Purchaser
may reasonably request.
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9. Redemption.
(a) Mandatory Redemption. Notwithstanding any other provision of the
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Securities or the Guarantor Agreements, the Capital Securities and the
Preferred Securities shall be subject to mandatory redemption, at a
redemption price equal to the liquidation amount of the Securities redeemed
plus all unpaid and accumulated amounts distributable with respect to such
Securities, during the period and to the extent any such Securities are
held by Gold Xxxx, from the net proceeds of any placement by the Company of
any shares of preferred stock or any subordinated debt (any such placement
of securities being referred to herein as a "Mandatory Redemption Event").
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In the event a Mandatory Redemption Event shall occur, the Company shall
have the obligation to redeem, to the full extent of any net proceeds
realized from such a placement or placements, all or any applicable portion
of any Capital Securities or Preferred Securities of the Company held by
Gold Xxxx, but the Company shall have the right to select for mandatory
redemption whichever type of Securities may be held by Gold Xxxx. In the
event the Company shall sell or otherwise place shares of its preferred
stock or its subordinated debt to any third-party or parties, it shall give
prompt written notification thereof to Gold Xxxx, which notice shall
specify a redemption date not more than [three (3)] business days after the
date of such notice at which time the mandatory redemption of all or a
specified portion of the Capital Securities and/or Preferred Securities
held by the Purchaser shall occur. For the avoidance of doubt, the Company
acknowledges that a Mandatory Redemption Event will not necessarily involve
securities having terms similar to the terms of Securities, but includes
all preferred stock and subordinated debt, whether such debt or stock ranks
prior to Securities or not, that any debt that is subordinated in the
payment of principal or interest to any other obligations of Company shall
be subordinated debt and that a sale of part of the Securities by Gold Xxxx
will have no effect on the Company's obligations upon a Mandatory
Redemption Event with respect to the Securities still held by Gold Xxxx.
(b) Optional Redemption. Notwithstanding any other provision of the
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Securities, this Agreement or the Guarantor Agreements and during the
period and to the extent such Securities are held by Gold Xxxx, the Capital
Securities and the Preferred Securities shall be subject to redemption
before maturity at the option of the Company at any time, in whole or in
part, at a redemption price equal to the liquidation amount of the
Securities redeemed plus all unpaid and accumulated amounts distributable
with respect to such Securities.
(c) Supplemental Redemption Notice. During the period that the
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Capital Securities and the Preferred Securities are held by Gold Xxxx, the
Company agrees that, in addition to any other redemption notice required by
the terms of the Securities, this Agreement or the Guarantor Agreements to
be sent by or on behalf of the Company with respect to any redemption of
the Capital Securities or the Preferred Securities, the Company will send
such redemption notice to Gold Xxxx by facsimile or by e-mail at the
address specified in Section 11 below or as otherwise furnished to the
Company by Gold Xxxx in writing.
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10. Extinguishment of Commitment Letter. The closing of the sale and
purchase of Securities under this Agreement shall operate to extinguish and
terminate the Commitment Letter in all respects and the bank letter of credit
referred to therein. Company agrees to take any and all actions as may be
reasonably requested by the Purchaser to confirm to the bank the termination of
the letter of credit.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Purchaser, shall be delivered or sent by certified
mail, courier or overnight carrier, hand or facsimile transmission to Gold
Xxxx Inc., 000 Xxxxxxxxx Xxxxxx Xxxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000-2397
Attention: Chief Financial Officer (Fax: (000) 000-0000); and with a copy
to the General Counsel at the same address (Fax: (000) 000-0000);
(b) if to the Company shall be delivered or sent by certified mail,
courier or overnight carrier, hand or facsimile transmission to the Company
at: 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Chief
Financial Officer (Fax: (000) 000-0000);
(c) if to the Trust shall be delivered or sent by certified mail,
courier or overnight carrier, hand or facsimile transmission to the Trust
at: 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
Administrative Trustees (Fax: (000) 000-0000).
Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Purchaser, the Company, the
Trust and their respective successors and assigns and the holders of the
Securities to the extent provided herein, except that the mandatory and optional
redemption and supplemental redemption notice provisions of Section 9 are
personal to Gold Xxxx and will not apply to any other holder of the Capital
Securities or the Preferred Securities. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 12, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
13. Survival. The respective representations, warranties and
agreements of the Company, the Trust and the Purchaser contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Virginia.
11
15. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
16. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the
Company, the Trust and Gold Xxxx, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
SOUTHERN STATES CAPITAL TRUST I
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Administrative Trustee
SOUTHERN STATES COOPERATIVE, INCORPORATED
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Senior Vice President and Chief Financial
Officer
Accepted:
GOLD XXXX INC.
By: /s/ M. A. Stimpert
-----------------------------
Name: M. A. Stimpert
Title: Senior Vice President
12
EXHIBIT A
TRANSFEREE LETTER OF REPRESENTATION
Southern States Cooperative, Incorporated ________________________
0000 Xxxx Xxxxx Xxxxxx ________________________
Richmond, Virginia 23230 ________________________
Ladies and Gentlemen:
In connection with the proposed transfer to us of [Step-Up Rate
Capital Securities, Series A (the "Capital Securities")] [Step-Up Rate Series B
Cumulative Redeemable Preferred Stock (the "Preferred Stock")] of Southern
States Cooperative, Incorporated (the "Company"), we confirm that:
1. We understand that the [Capital Securities] [Preferred Stock] has
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or other applicable securities laws, and may not be
offered, sold, or otherwise transferred except as permitted in the
following sentence. We agree on our behalf and on behalf of any investor
account for which we are purchasing [Capital Securities] [Preferred Stock]
to offer, sell, or otherwise transfer such [Capital Securities] [Preferred
Stock] prior to the date that is two years after the later of the date of
original issue thereof and the last date on which the Company or any
"affiliate" of the Company was the owner of such [Capital Securities]
[Preferred Stock] (or any predecessor thereto) (the "Resale Restriction
Termination Date") only (a) to the Company, (b) pursuant to a registration
statement which has been declared effective under the Securities Act, (c)
so long as the [Capital Securities] [Preferred Stock] is eligible for
resale pursuant to Rule 144A under the Securities Act, to a person we
reasonably believe is a "qualified institutional buyer" (a "QIB") as
defined in Rule 144A of the Securities Act that purchases for its own
account or for the account of QIB to whom notice is given that the transfer
is being made in reliance on Rule 144A, (d) to an institutional "accredited
investor" (an "Institutional Accredited Investor") within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act
that is acquiring the [Capital Securities] [Preferred Stock] for its own
account or for the account of such an Institutional Accredited Investor not
with a view to, or for offer and sale in connection with, any distribution
in violation of the Securities Act, (e) pursuant to any other available
exemption from the registration requirements under the Securities Act,
subject to the right of the Company prior to any such offer, sale, or
transfer pursuant to clause (d) or (e) above to require the delivery of an
opinion of counsel, certifications, a letter from the transferee
substantially similar to this letter, or other information satisfactory to
them.
A-1
2. We are purchasing the [Capital Securities] [Preferred Stock] for
our own account or for the account of another for whom we are acting and
not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act or any other applicable
securities laws, and we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the [Capital Securities] [Preferred Stock], and we and any
accounts for which we are acting are each able to bear the economic risk of
our or its investment for an indefinite period.
3. You and the Company are entitled to rely upon this letter and you
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH ,
THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
___________________________________________
Name of Transferee (please print)
By: _______________________________________
Title: ____________________________________
Date: _____________________________________
Upon transfer, the [Capital Securities] [Preferred Stock] would be
registered in the name of the new beneficial owner as follows:
Name: __________________________________
Address: _______________________________
_______________________________
Taxpayer ID Number: ____________________
A-2
EXHIBIT B
FORM OF OPINION OF
COUNSEL TO THE COMPANY TO BE DELIVERED
PURSUANT TO SECTION 7(b)
October 5, 1999
Gold Xxxx Inc.
000 Xxxxxxxxx Xxxxxx Xxxxxxx, XX
Xxxxxxx, Xxxxxxx 00000-0000
Southern States Cooperative, Incorporated
Southern States Capital Trust I
Ladies and Gentlemen:
We have acted as counsel to Southern States Cooperative, Incorporated,
a Virginia agricultural cooperative association (the "Company"), and Southern
States Capital Trust I, a statutory business trust created under the laws of
Delaware (the "Trust"), in connection with the sale of $60,000,000 liquidation
amount of Step-Up Rate Capital Securities, Series A (the "Capital Securities")
of the Trust and $40,000,000 liquidation amount of Step-Up Rate Cumulative
Redeemable Preferred Stock (the "Preferred Stock," and together with the Capital
Securities, the "Securities") of the Company to you under the Purchase Agreement
of even date herewith between you and the Company. The Capital Securities will
be issued by the Trust, and the Guarantee and the Junior Subordinated Debentures
will be issued by the Company to the Trust in connection with the issuance of
the Capital Securities.
The Capital Securities will be issued under an Amended and Restated
Trust Agreement (the "Amended and Restated Trust Agreement") entered into by and
among the Company, the Delaware Trustee, the Property Trustee, and the
Administrative Trustees named therein; the Junior Subordinated Debentures will
be issued under a Junior Subordinated Indenture (the "Indenture") to be entered
into between the Company and the Debenture Trustee; and the Guarantee will be
issued under the Guarantee Agreement (the "Guarantee") between the Company and
the Guarantee Trustee. The Company and the Trust also will enter into an
Expense Agreement.
All capitalized terms not otherwise defined herein have the meanings set
forth in the Purchase Agreement.
In rendering this opinion, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of: (i) the Trust Agreement, dated
December 15, 1998 (the "Trust
B-1
Agreement"), (ii) the Certificate of Trust of the Trust, filed on December 16,
1998, (iii) the Corrected Certificate of Trust of the Trust, filed on September
28, 1999, (iv) the form of Amended and Restated Trust Agreement pursuant to
which the Capital Securities are to be issued, (v) the form of Capital
Securities Certificate, (vi) the form of Guarantee entered into by and between
the Company and the Trust, pursuant to which the Company will guarantee certain
obligations of the Trust with respect to the Capital Securities, (vii) the form
of Indenture entered into by and between the Company and the Debenture Trustee,
which will govern the Junior Subordinated Debentures to be issued by the
Company, (viii) the form of Junior Subordinated Debenture and (ix) the Articles
of Amendment to the Restated Articles of Incorporation of the Company creating
the series of Step-Up Rate Series B Cumulative Redeemable Preferred Stock. We
have also examined originals or copies, certified or otherwise identified to our
satisfaction, of such other documents, certificates and records as we have
deemed necessary or appropriate for purposes of rendering this opinion. In
rendering this opinion, we have assumed that the Amended and Restated Trust
Agreement, the Guarantee, the Capital Securities, the Indenture and the
Debentures when executed, will be executed in substantially the form reviewed by
us. We have also assumed that the trustees will conduct the affairs of the Trust
in accordance with the Amended and Restated Trust Agreement.
Based upon the foregoing, we are of the following opinions:
1. The Company has been duly formed and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Virginia, is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which its ownership or lease of property or the conduct
of its business requires such qualification, save where the failure to do so
would not reasonably be expected to have a material adverse effect on the
business or property of the Company and has all corporate power and authority
necessary to own or hold its properties and conduct the business in which it is
engaged.
2. The authorized capital stock of the Company consists of (a) 20,000,000
shares of membership common stock of which 12,057,177 were issued and
outstanding as of August 31, 1999, and (b) 1,000,000 shares of preferred stock,
of which 271 shares of 5% Series Cumulative Preferred Stock were issued and
outstanding as of August 31, 1999, and of which 14,354 shares of 6% Series
Cumulative Preferred Stock were issued and outstanding as of August 31, 1999,
all of which shares of stock were duly authorized, validly issued and fully paid
and non-assessable.
3. (a) The execution and delivery by the Company of each of the
Securities, the Trust Agreement, the Amended and Restated Trust Agreement, the
Indenture and the Guarantee has been duly and validly authorized, and when
issued in accordance with the Purchase Agreement, the Preferred Stock will be
duly authorized, validly issued and fully paid and non-assessable.
(b) The Subordinated Debentures to be issued by the Company to the
Trust will, when issued in accordance with the terms of the Indenture,
constitute valid and binding obligations of the Company.
(c) The Guarantee when provided by the Company and upon issuance of
the Capital Securities will constitute a valid and binding obligation of
the Company.
B-2
4. The Purchase Agreement has been duly authorized, executed and delivered
by the Company and the Trust and constitutes a valid and binding agreement of
the Company and the Trust enforceable against the Company and the Trust in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization,
liquidation, moratorium or other similar laws affecting the rights and remedies
of creditors generally and except as may be subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law), and except as rights to indemnity and contribution thereunder may be
limited by applicable law and public policy, and except that no opinion is
expressed as to the enforceability of the choice of law provision thereof;
5. To the best of our knowledge, the issue and sale of the Securities,
the compliance by the Company with all of the provisions of the Purchase
Agreement, and the consummation of the Transactions contemplated thereby, will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property or assets
of the Company is subject, nor will such actions result in any violation of the
provisions of the articles of incorporation or by-laws of the Company or, to our
knowledge, any statute or any order, rule or regulation of any court or
governmental agency or body of the United States or the State of Virginia having
jurisdiction over the Company or any of its properties or assets; and, except
for such consents, approvals, authorizations, registrations or qualifications as
may be required under applicable state securities laws in connection with the
purchase and distribution of the Securities by the Purchaser, no consent
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of the Purchase Agreement by the Company and the consummation of the
transactions contemplated thereby;
6. Neither the Company, any of its subsidiaries nor the Trust is an
"investment company" as such term is defined in the Investment Company Act of
---------- -------
1940, as amended;
Our opinion is limited to matters governed by the Federal laws of the
United States of America and the laws of the Commonwealth of Virginia.
Where our opinion as to certain matters of fact is stated to be "to the
best of our knowledge," we have not undertaken any independent investigation or
examination of those matters as a basis for our opinion but have instead relied
solely upon such information as to those matters as is contained in our open
files in the name of the Company or has been provided to us in response to
inquiries made by us to officers of the Company or has otherwise come to our
attention in the course of our representation of the Company or the Trust in
connection with the preparation of the Securities, the Trust Agreement, the
Amended and Restated Trust Agreement, the Indenture, the Guarantee and the
Purchase Agreement and the consummation of the Transactions.
B-3
For purposes of the opinion rendered in Paragraph 2 above, the statement
therein as to the number of shares of capital stock issued and outstanding on
the date referred to was based solely on information provided to us by the
Company.
In rendering the foregoing opinion, we have relied to the extent we deem
appropriate on the opinion of Xxxxxx Xxxxxxxx & Xxxxxxx LLP, Delaware counsel to
the Trust.
Very truly yours,
XXXX & XXXXXXXXX, X.X.X.
B-4
EXHIBIT C
FORM OF OPINION OF DELAWARE COUNSEL
TO THE GUARANTOR AND THE TRUST
TO BE DELIVERED PURSUANT TO SECTION 7(c)
October 5, 1999
To Each of the Persons Listed
on Schedule I Attached Hereto
Re: Southern States Capital Trust I
-------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Southern States Capital
Trust I, a Delaware business trust (the "Trust") in connection with the issuance
of its Step-Up Rate Capital Securities, Series A on the date hereof (the
"Capital Securities") pursuant to the Purchase Agreement as defined in the
Amended and Restated Trust Agreement (the "Trust Agreement"), dated the date
hereof, by and among Southern States Cooperative, Incorporated, as Depositor,
First Union Trust Company, National Association, as Delaware Trustee, First
Union National Bank, as Property Trustee, and the Administrative Trustees named
therein. Initially capitalized terms used herein and not otherwise defined are
used herein as defined in the Trust Agreement.
For purposes of giving the opinions hereinafter set forth, we have
examined only the following documents and have conducted no independent factual
investigations of our own:
1. The Certificate of Trust for the Trust, dated as of December 15,
1998, as filed in the Office of the Secretary of State of the State of Delaware
(the "Secretary of State") on December 16, 1998;
2. The Corrected Certificate of Trust for the Trust, dated as of
September 28, 1999, as filed with the Secretary of State on September 28, 1999;
3. The original trust agreement of the Trust, dated as of December
15, 1998, by and between Southern States Cooperative, Incorporated, as
Depositor, and First Union Trust Company, National Association, as Delaware
Trustee (the "Original Agreement");
4. The Trust Agreement;
To each of the person on
Schedule I attached hereto
October 5, 1999
Page 2
5. A Certificate of Good Standing for the Trust, dated October 5,
1999, obtained from the Secretary of State;
6. The Purchase Agreement; and
7. The Expense Agreement.
The documents referred to in (1) and (2) are collectively referred to
as the "Certificate." The documents referred to in (3), (4), (6) and (7) are
collectively referred to as the "Agreements" and individually as an "Agreement."
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in (1) through (7) above. In particular, we have
not reviewed any document (other than the documents listed in (1) through (7)
above) that is referred to or incorporated by reference into the documents
reviewed by us. We have assumed that there exists no provision in any document
that we have not reviewed that is inconsistent with the opinions stated herein.
In addition, we have conducted no independent factual investigation of
our own but rather have relied solely on the foregoing documents, the statements
and information set forth therein and the additional matters related or assumed
therein, all of which we have assumed to be true, complete and accurate.
Whenever a statement herein is qualified by the phrase "known by us" or a
correlative phrase, it is intended to indicate the current and actual knowledge
of the attorneys in the firm who have rendered legal services in connection with
the transactions described herein.
Based upon the foregoing, and subject to the assumptions,
qualifications, limitations and exceptions set forth herein, we are of the
opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust have been made.
2. Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the trust power and authority (a) to own its properties
(including, without limitation, the Debentures) and conduct its business, (b) to
execute and deliver, and to perform its obligations under, the Agreements to
which it is a party, and (c) to issue and perform its obligations under the
Capital Securities and Common Securities, all as described in the Trust
C-2
To each of the person on
Schedule I attached hereto
October 5, 1999
Page 3
Agreement.
3. The Trust Agreement constitutes a valid and binding obligation of
the Depositor and the Trustees, enforceable against the Depositor and the
Trustees, respectively, in accordance with its terms.
4. Under the Delaware Business Trust Act and the Trust Agreement,
the execution and delivery by the Trust of the Agreements to which it is a
party, and the performance by the Trust of its obligations thereunder, have been
duly authorized by all necessary trust action on the part of the Trust.
5. The Capital Securities (a) have been duly authorized by the Trust
Agreement, and (b) once duly and validly issued in accordance with the Trust
Agreement, will represent valid and fully paid and, subject to the
qualifications set forth in number 8 below, non-assessable undivided beneficial
interests in the assets of the Trust.
6. Once duly and validly issued in accordance with the Trust
Agreement, the Capital Securities will entitle the Holders of the Capital
Securities to the benefits of the Trust Agreement.
7. The Common Securities (a) have been duly authorized by the Trust
Agreement, and (b) once duly and validly issued in accordance with the Trust
Agreement, will represent valid and fully paid undivided beneficial interests in
the assets of the Trust.
8. The Holders of Capital Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware, except that the Holders of Capital Securities may be obligated to
(a) provide indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of certificates
representing Capital Securities and the issuance of replacement certificates
representing Capital Securities to the extent provided in the Trust Agreement,
(b) provide security or indemnity in connection with requests of or directions
to the Property Trustee to exercise its rights and powers under the Trust
Agreement, and (c) provide indemnity in connection with violations of the Trust
Agreement or U.S. Federal or state securities laws arising from transfers or
exchanges of certificates representing Capital Securities and the issuance of
replacement certificates representing Capital Securities.
9. Under the Delaware Business Trust Act and the Trust Agreement,
the issuance of the Trust Securities is not subject to preemptive rights.
C-3
To each of the person on
Schedule I attached hereto
October 5, 1999
Page 4
10. No authorization, approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body of the State of
Delaware known by us to have jurisdiction over the Trust is required for the
issuance and sale of the Securities or the consummation by the Trust of the
transactions contemplated by the Agreements to which it is a party.
11. The (a) purchase of the Debentures by the Trust, (b) distribution
of the Debentures by the Trust in the circumstances contemplated by the Trust
Agreement, and (c) execution, delivery and performance by the Trust of the
Agreements to which it is a party and the consummation of the transactions
contemplated thereunder, will not conflict with or result in a breach or
violation of any of the terms or provisions of the Certificate or the Trust
Agreement or any statute, rule or regulation of the State of Delaware or any
governmental agency or body of the State of Delaware known by us to have
jurisdiction over the Trust.
12. Assuming that the Trust is treated as a grantor trust or
partnership for federal income tax purposes, the Holders of Capital Securities
(other than those holders of Capital Securities who reside or are domiciled in
the State of Delaware) will have no liability for income taxes imposed by the
State of Delaware solely as a result of their participation in the Trust, and
the Trust will not be liable for any income tax imposed by the State of
Delaware.
All of the foregoing opinions contained herein are subject to the
following assumptions, qualifications, limitations and exceptions:
a. The foregoing opinions are limited to the laws of the State
of Delaware presently in effect, excluding the securities laws thereof. We have
not considered and express no opinion on the laws of any other jurisdiction,
including, without limitation, federal laws and rules and regulations relating
thereto.
b. The foregoing opinions in paragraphs 3 and 6 above are
subject to (i) applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, fraudulent transfer and similar laws relating to or affecting
creditors rights generally including, without limitation, the Delaware Uniform
Fraudulent Conveyance Act, the provisions of the United States Bankruptcy Code
and the Delaware insolvency statutes, (ii) principles of equity including,
without limitation, concepts of materiality, good faith, fair dealing,
conscionability and reasonableness (regardless of whether such enforceability is
considered in a proceeding in equity or at law), (iii) applicable law relating
to fiduciary duties, (iv) public policy limitations with respect to exculpation,
contribution and indemnity provisions, and (v) the limitation that a court
applying Delaware law will enforce a liquidated damages provision in a contract
only where, at the time of contract, actual damages may be difficult to
determine and the stipulated sum is not so grossly disproportionate to the
probable anticipated loss as to be a penalty.
C-4
To each of the person on
Schedule I attached hereto
October 5, 1999
Page 5
c. We have assumed the due execution and delivery by each party
thereto of each document examined by us. In addition, we have assumed the due
authorization by each party thereto (exclusive of the Trust) of each document
examined by us, and that each of such parties (exclusive of the Trust and the
Administrative Trustees) has the full power, authority, and legal right to
execute, deliver and perform each such document. We also have assumed that each
of the parties (exclusive of the Trust and the Administrative Trustees) to each
of the Agreements is a corporation, bank, national banking association, limited
liability company or trust company duly formed, validly existing and in good
standing under the laws of their respective jurisdictions of organization and
that the Agreements to which each of the entities to each of the Agreements
(other than, in the case of the Trust, as expressly set forth in Paragraph 11)
is a party do not result in the breach of the terms of, and do not contravene
its constituent documents or any law, rule or regulation applicable to it. We
have also assumed that each of the Agreements to which each of the entities is a
party does not (x) result in the breach of the terms of, and does not
contravene, any contractual restriction binding upon such entities, or (y)
(other than, in the case of the Trust as expressly set forth in Paragraphs 10
and 11) require under any law, statute, rule, or regulation any filing with, or
any approval or consent of, any governmental authority. We have further assumed
the legal capacity of any natural persons who are signatories to any of the
Agreements or other documents examined by us.
d. We have assumed that all signatures on documents examined by
us are genuine, that all documents submitted to us as originals are authentic
and that all documents submitted to us as copies conform with the originals.
e. We have assumed that the Original Agreement and the Trust
Agreement collectively, constitute the entire agreement among each of the
respective parties thereto with respect to the subject matter thereof, including
with respect to the creation, operation, dissolution and winding up of the
Trust.
C-5
To each of the person on
Schedule I attached hereto
October 5, 1999
Page 6
f. We have assumed that no event set forth in Article 9 of the
Trust Agreement has occurred.
g. We have assumed that the Trust derives no income from or
connected with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the Delaware
Business Trust Act and the filing of documents with the Secretary of State) or
employees in the State of Delaware.
h. Notwithstanding any provision in the Trust Agreement to the
contrary, we note that upon the occurrence of an event set forth in Article 9
thereof, the Trust cannot make any payments or distributions to the Holders of
Securities until creditors' claims are either paid in full or reasonable
provision for payment thereof has been made.
i. With respect to the enforceability of any provision of the
Trust Agreement wherein the parties provide for the appointment of a liquidator,
we note that upon the application of any beneficial owner, the Delaware Court of
Chancery has the power, upon cause shown, to wind up the affairs of a Delaware
business trust and in connection therewith to appoint a liquidating trustee
other than the one agreed to by the beneficial owners thereof.
j. We have assumed that the only assets owned by the Trust are
the Debentures, cash on deposit in, or owing to, the Payment Account, and all
proceeds and rights in respect of the same.
k. We have assumed that all of the agreements that are not
governed by Delaware law constitute legal, valid, binding and enforceable
obligations of each of the parties thereto under the laws of the State of New
York.
l. We have assumed that the Trust Securities will be issued and
sold in accordance with the Trust Agreement and the Purchase Agreement. We have
further assumed that the purchase price for the Trust Securities has been paid,
that certificates representing the Trust Securities have been issued by the
Trust, and that such certificates representing Trust Securities have been
received by the Holders thereof, respectively, all in accordance with the Trust
Agreement and the Purchase Agreement.
m. We note that pursuant to the Expense Agreement the
Depositor, as Holder of the Common Securities, is liable for all of the debts
and obligations of the Trust (other than with respect to the Capital Securities)
to the extent not satisfied out of the Trust's assets.
This opinion is rendered solely for your benefit in connection with
the matters
C-6
To each of the person on
Schedule I attached hereto
October 5, 1999
Page 7
set forth herein and, without our prior written consent, may not be
furnished or quoted to, or relied upon by, any other person or entity for any
purpose. Xxxx & Xxxxxxxxx, L.L.P. and Xxxxxxxx & Xxxxxxxx may rely on this
opinion in connection with any legal opinion being rendered by the same on the
date hereof with respect to the matters set forth herein.
Very truly yours,
POTTER XXXXXXXX & XXXXXXX LLP
C-7
Schedule I
SOUTHERN STATES COOPERATIVE, INCORPORATED
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
FIRST UNION NATIONAL BANK
GOLD XXXX INC.
C-1
