EXHIBIT 1
SOUTHERN STATES CAPITAL TRUST I
___% Capital Securities
(Liquidation Amount $25 Per Capital Security)
guaranteed to the extent set forth in the Guarantee by
SOUTHERN STATES COOPERATIVE, INCORPORATED
UNDERWRITING AGREEMENT
_________, 1999
First Union Capital Markets, Corp.
▇▇▇▇▇▇ Brothers,
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC,
c/o First Union Capital Markets,
One First Union Center, TW-▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
Ladies and Gentlemen:
Southern States Capital Trust I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), and Southern States
Cooperative, Incorporated, an agricultural cooperative corporation organized
under the laws of Virginia, as depositor of the Trust and as guarantor (the
"Guarantor"), propose, subject to the terms and conditions stated herein, that
the Trust issue and sell to the underwriters named in Schedule I hereto
(together with the Independent Underwriter, as defined below, the
"Underwriters") an aggregate of 3,000,000 of its ___% Capital Securities
(liquidation amount $25 per capital security) (the "Firm Securities") and, at
the election of the Underwriters, up to an aggregate of 450,000 additional
Capital Securities that the Underwriters elect to purchase (the "Optional
Securities", the Firm Securities and any Optional Securities being collectively
referred to as the"Securities") representing undivided beneficial interests in
the assets of the Trust, guaranteed on a subordinated basis by the Guarantor 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
Guarantor and First Union National Bank, as trustee (the "Guarantee Trustee").
The Trust is to purchase, with the proceeds of the sale of the Firm Securities
and 92,784 of its Common Securities (liquidation amount $25 per common security)
(the "Common Securities" and together with the Securities, the "Trust
Securities"), $77,319,600 aggregate principal amount of ____% Junior
Subordinated Debentures due _________, 2029 (the "Debentures") of the Guarantor
(and in the event the Underwriters purchase Optional Securities, a proportionate
additional principal amount of the Debentures), to be issued pursuant to a
Junior Subordinated Indenture (the "Indenture") between the Guarantor and First
Union National Bank, as trustee (the "Debenture Trustee").
The Guarantor 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 Guarantor, as depositor, First Union National
Bank, as Property Trustee ("Property Trustee"), First Union Trust Company,
National Association, as Delaware Trustee (the "Delaware Trustee"), and two
individual trustees who are employees or officers of or affiliated with the
Guarantor (the "Administrative Trustees"). The Property Trustee, the Delaware
Trustee and the Administrative Trustees are collectively referred to herein as
the "Trustees."
▇▇▇▇▇▇ Brothers will act as a qualified independent underwriter (the
"Independent Underwriter") as defined in Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers (the "NASD") in order to satisfy the
requirements of Rule 2710(c)(8) of the Conduct Rules of the NASD.
1. PURCHASE AND OFFERING OF THE SECURITIES. Subject to the terms and
conditions set forth herein, (a) the Trust agrees to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Trust, on __________, 1999 (the "Closing Date", at
the Closing Location and for the Purchase Price to the Underwriters set forth in
Schedule II hereto, the number of Firm Securities set forth opposite the name of
such Underwriter in Schedule I hereto and (b) in the event the Underwriters
shall exercise the election to purchase Optional Securities as provided below,
on __________, 1999 (the "Second Closing Date") the Trust shall issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase, at the purchase price set forth in Schedule II hereto,
that portion of the number of Optional Securities as to which such election
shall have been exercised (to be adjusted so as to eliminate fractional
Securities) determined by multiplying such number of additional Securities by a
fraction, the numerator of which is the maximum number of Firm Securities which
such Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Firm Securities that all of the Underwriters are entitled to purchase
pursuant to clause (a) of this Section 1.
The Trust and the Guarantor hereby grant to the Underwriters the right
to purchase at their election up to 450,000 Optional Securities, at the purchase
price set forth in Schedule II hereto, for the sole purpose of covering
over-allotments in the sale of the Securities. The Underwriters may exercise
such right by giving written notice to the Guarantor no later than the ____ day
prior to the Second Closing Date, specifying the number of Optional Securities
to be purchased.
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As compensation to the Underwriters for their commitments hereunder, and
in view of the fact that the proceeds of the sale of the Securities will be used
by the Trust to purchase the Debentures of the Guarantor, the Guarantor agrees
to pay on the Closing Date (as hereinafter defined) to the Underwriters the
amount specified in Schedule II hereto.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE GUARANTOR AND THE
TRUST. The Guarantor and the Trust, jointly and severally, represent and warrant
to, and agree with, the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-69265)
(the "Initial Registration Statement") in respect of the Securities, the
Debentures and the Guarantee has been filed with the Securities and
Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to the Underwriters has been
declared effective by the Commission in such form; and no stop order
suspending the effectiveness of the Initial Registration Statement or
any post-effective amendment thereto has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission. The
preliminary prospectus included in the Initial Registration Statement is
hereinafter called the "Preliminary Prospectus"; the various parts of
the Initial Registration Statement including (i) the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act of 1933 (the "Act") and
deemed to be part of the Initial Registration Statement at the time it
was declared effective, (ii) all exhibits thereto and (iii) the
documents incorporated by reference in the prospectus contained in the
registration statement at the time the registration statement became
effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Securities, the Debentures
and the Guarantees, in the form in which it has most recently been
filed, or transmitted for filing, with the Commission on or prior to the
date of this Agreement, is hereinafter called the "Prospectus"; any
reference herein to the Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein and any reference to any amendment or supplement to
the Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in the Preliminary Prospectus or Prospectus, as the case
may be.
(b) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
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Commission thereunder 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 applicable filing date as to the Prospectus and
any amendment or supplement thereto, 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;
PROVIDED, HOWEVER, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Trust or the Guarantor by
an Underwriter expressly for use in the Prospectus as amended or
supplemented.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder
(d) The Guarantor and each of its Significant Subsidiaries (as
defined in Section 13) have been duly organized and are validly existing
and in good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good standing
in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses 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 Guarantor and its subsidiaries taken as a whole, and
each has all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are
engaged.
(e) The Guarantor has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Guarantor have been duly and validly authorized and issued and are fully
paid and non-assessable.
(f) This Agreement has been duly authorized, executed and
delivered by the Guarantor and the Trust.
(g) Except where it would not reasonably be expected to have a
material adverse effect on the consolidated financial position,
stockholder's or patrons' equity, results of operations, business or
prospects of the Guarantor and its subsidiaries taken as a whole, (i)
issuance of the Securities, and the consummation by the Guarantor of the
transactions contemplated herein (the "Transactions") 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 Guarantor or any of its Significant Subsidiaries is a party or by
which the Guarantor or any of its Significant Subsidiaries is bound or
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to which any of the properties or assets of the Guarantor or any of its
Significant Subsidiaries is subject, (ii) nor will such actions result
in any violation of the provisions of the Amended and Restated Articles
of Incorporation or by-laws of the Guarantor or any of its Significant
Subsidiaries or any statute or order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Guarantor, any
of its Significant Subsidiaries or any of their properties or assets;
and (iii) except for the registration of the Securities, the Debentures
and the Guarantee under the Act, the qualification of the Indenture
under the Trust Indenture Act, the listing of the Securities on the New
York Stock Exchange (the "NYSE") and 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 Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the
Transactions.
(h) 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 power and authority to own its property and conduct its business
as described in the Prospectus, and has conducted and will conduct no
business other than the transactions contemplated by this Agreement and
described in the Prospectus; and the Securities will conform in all
material respects to the description thereof contained in the
Prospectus.
(i) At the Closing Date and the Second Closing Date, the
Securities will have been duly and validly authorized by the Trust, and,
when issued and delivered to the Underwriters 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
and will conform in all material respects to the description thereof
contained in the Prospectus; the issuance of the Securities is not
subject to preemptive or other similar rights; the Securities will have
the rights set forth in the Trust Agreement, and the terms of the
Securities are valid and binding on the Trust; the holders of the
Securities (the "Securityholders") 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.
(j) The Guarantee, the Debentures, the Trust Agreement and the
Indenture (collectively, the "Guarantor Agreements") have each been duly
authorized by the Guarantor and when validly executed and delivered by
the Guarantor and, in the case of the Guarantee, by the Guarantee
Trustee, in the case of the Trust Agreement, by the Trustees, 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
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Guarantor, 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); and the Guarantor
Agreements conform to the descriptions thereof in the Prospectus; and
the Trust Agreement, the Indenture and the Guarantee have each been duly
qualified under the Trust Indenture Act.
(k) Neither the Guarantor nor any of its Significant Subsidiaries
has sustained, since the date of the latest financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus; and, since such date, there has not been any change in
the capital stock, allocated patrons' equity or long-term debt of the
Guarantor or any of its Significant Subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the consolidated financial position,
stockholders' or patrons' equity or results of operations of the
Guarantor and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus.
(l) The consolidated financial statements of the Guarantor and
its consolidated subsidiaries and of the agricultural inputs business
which the Guarantor acquired from Gold ▇▇▇▇ Inc. (the "Gold ▇▇▇▇ Inputs
Business") (including the related notes and supporting schedules)
incorporated in the Prospectus present fairly the financial condition
and results of operations of the entities purported to be shown thereby,
at the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(m) PricewaterhouseCoopers LLP and KPMG Peat Marwick LLP, who
have certified certain financial statements of the Guarantor and of the
Gold ▇▇▇▇ Inputs Business, respectively, whose reports are incorporated
in the Prospectus and who have delivered the initial letters referred to
in Section 6(e) hereof, are independent public accountants as required
by the Act during the periods covered by the financial statements on
which they reported contained in the Prospectus.
(n) There are no legal or governmental proceedings pending to
which the Guarantor or any of its Significant Subsidiaries is a party or
of which any property or asset of the Guarantor or any of its
Significant Subsidiaries is the subject which, if determined adversely
to the Guarantor or such Significant Subsidiary, might have a material
adverse effect on the consolidated financial position, stockholders' or
patrons' equity, results of operations, business or prospects of the
Guarantor and its subsidiaries taken as a whole; and to the best of the
Guarantor's knowledge, no such proceedings are threatened or
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contemplated by governmental authorities or threatened by others that is
required to be disclosed in the Prospectus which is not so disclosed.
(o) No relationship, direct or indirect, exists between or among
the Guarantor on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Guarantor on the other hand,
which is required to be disclosed in the Prospectus which is not so
disclosed.
(p) Since the date as of which information is given in the
Prospectus, and except as may otherwise be disclosed in the Prospectus,
the Guarantor and the Trust have not (i) issued or granted any
securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred
in the ordinary course of business, or (iii) entered into any
transaction not in the ordinary course of business.
(q) Neither the Guarantor nor any of the Guarantor's Significant
Subsidiaries (i) is in violation of its articles of incorporation or
by-laws, (ii) is in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
it is a party or by which it is bound or to which any of its properties
or assets is subject except where it would not reasonably be expected to
have a material adverse effect on the consolidated financial position,
stockholder's or patrons' equity, results of operations, business or
prospects of the Guarantor and its subsidiaries taken as a whole, or
(iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its
properties or assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its properties or
assets or to the conduct of its business.
(r) Neither the Trust, the Guarantor nor any Significant
Subsidiary of the Guarantor is, and after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus neither of them will be, an "investment
company" within the meaning of such term under the Investment Company
Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.
3. DELIVERY OF AND PAYMENT FOR THE SECURITIES.
(a) The Securities to be purchased by each Underwriter shall be
delivered by or on behalf of the Trust through the facilities of The
Depository Trust Guarantor ("DTC") against payment by or on behalf of
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such Underwriter of the purchase price therefor by certified or official
bank check or checks, payable to the order of the Trust in immediately
available funds. The Trust will cause the certificates representing the
Securities to be made available for checking and packaging at least one
day prior to the Closing Date (as defined below) at the office of DTC or
its designated custodian. The Securities to be purchased by each
Underwriter hereunder will be represented by one or more definitive
global Securities in book-entry form which will be deposited by or on
behalf of the Trust with DTC or its designated custodian. The time and
date of such delivery payment shall be 9:30 a.m., New York City time, on
the Closing Date or the Second Closing Date, as the case may be, or such
other time and date as the Underwriters and the Guarantor may agree upon
in writing.
On the Closing Date or the Second Closing Date, as the case may
be, the Guarantor will pay, or cause to be paid, the commission payable
to the Underwriters under Section 1 hereof in immediately available
funds.
(b) The documents to be delivered on the Closing Date or the
Second Closing Date, as the case may be, by or on behalf of the parties
hereto pursuant to Section 6 hereof will be delivered at such time and
date at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ .
4. FURTHER AGREEMENTS OF THE GUARANTOR AND THE TRUST. The
Guarantor and the Trust, jointly and severally, further agree:
(a) To furnish to the Underwriters, without charge, as many
copies of the Prospectus and any supplements and amendments thereto as
the Underwriters may reasonably request.
(b) To advise the Underwriters promptly of any proposal to amend
or supplement the Registration Statement or the Prospectus and to afford
the Underwriters a reasonable opportunity to comment on any such
proposed amendment or supplement; and the Guarantor will also advise the
Underwriters promptly of the filing of any such amendment or supplement
and of the institution by the Commission of any stop order proceedings
in respect of the Registration Statement or of any part thereof and will
use its best efforts to prevent the issuance of any such stop order and
to obtain as soon as possible its lifting, if issued.
(c) If, at any time when Prospectus is required to be delivered
under the Act in connection with sales by an Underwriter or dealer, any
event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend the
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Prospectus to comply with the Act, to notify the Underwriters of such
event and to promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance.
(d) As soon as practicable, but not later than 18 months, after
the effective date of the Registration Statement, to make generally
available to its securityholders an earnings statement, which will
satisfy the provisions of Section 11(a) of the Act.
(e) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as the
Underwriters may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the
Securities.
(f) Not to offer, sell, contract to sell or otherwise dispose of
any additional securities of the Guarantor, the Trust or any other trust
the common securities of which are held by the Guarantor, that are
substantially similar to the Securities or any securities convertible
into or exchangeable for or that represent the right to receive any such
similar securities, without the consent (which consent shall not be
unreasonably withheld) of the Underwriters during the period beginning
from the date of this Agreement and continuing for 180 days following
the Closing Date.
(g) To use their best efforts to cause the Securities to be
listed on the NYSE.
(h) To take such steps as shall be necessary to ensure that
neither the Trust, the Guarantor nor any subsidiary of the Guarantor
shall become an "investment company" within the meaning of such term
under the Investment Company Act of 1940 and the rules and regulations
of the Commission thereunder.
5. EXPENSES. The Guarantor and the Trust, jointly and severally,
agree to pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Guarantor's counsel and accountants in connection with the
registration of the Securities, the Guarantee and the Debentures under the Act
and all other expenses in connection with the preparation, printing and filing
of the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters; (ii) the cost of printing or producing this
Agreement, the Securities and the Debentures, any Blue Sky Memorandum, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
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(iii) all expenses in connection with the qualification of the Securities, the
Guarantee and the Subordinated Debentures for offering and sale under state
securities laws as provided in Section 4(e) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey(s); (iv) any fees
charged by securities rating services for rating the Securities and the
Debentures; (v) any filing fees incident to, and the fees and disbursements of
counsel for the Underwriters in connection with, any required reviews by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities and the issuance of the Guarantee and the Debentures; (vi) the cost
of preparing the Securities and the Debentures; (vii) the fees and expenses of
any Trustee, the Debenture Trustee and the Guarantee Trustee, and any agent of
any trustee and the fees and disbursements of counsel for any trustee in
connection with the Guarantor Agreements and the Securities; (viii) the cost of
qualifying the Securities with The Depository Trust Company; (ix) any fees and
expenses in connection with listing the Securities on the NYSE and the cost of
registering the Securities under Section 12 of the Exchange Act; and (x) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, and Sections 7
and 9 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers they
may make.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters hereunder are subject to the accuracy, when made and on the
Closing Date or the Second Closing Date, as the case may be, of the
representations and warranties of the Guarantor and the Trust contained herein,
to the performance by the Guarantor and the Trust of their obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Underwriters shall not have discovered and disclosed to
the Guarantor and the Trust on or prior to the Closing Date or the
Second Closing Date, as the case may be, that the Prospectus or any
amendment or supplement thereto contains any untrue statement of a fact
which, in the opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(b) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Guarantor
Agreements, the Securities, the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby
shall be satisfactory in all respects to counsel for the Underwriters,
and the Guarantor and the Trust shall have furnished to such counsel all
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documents and information that they may reasonably request to enable
them to pass upon such matters.
(c) ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.P. shall have furnished to the
Underwriters their written opinion, as counsel to the Guarantor and the
Trust, addressed to the Underwriters and dated the Closing Date, in form
and substance reasonably satisfactory to the Underwriters, to the effect
set forth in Exhibit A hereto and to such further effect as counsel to
the Underwriters may reasonably request.
(d) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP shall have furnished to the
Underwriters their written opinion, as Delaware counsel to the Guarantor
and the Trust, addressed to the Underwriters and dated the Closing Date,
in form and substance reasonably satisfactory to the Underwriters, to
the effect set forth in Exhibit B hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(e) The Underwriters shall have received on the Closing Date
letters, dated the Closing Date in form and substance satisfactory to
the Underwriters, from PricewaterhouseCoopers LLP and KPMG Peat Marwick
LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information, including the financial information
contained in the Prospectus as identified by the Underwriters.
(f) The Guarantor and the Trust shall have furnished to the
Underwriters a Certificate, dated the Closing Date or the Second Closing
Date, as the case may be, of the President and the Chief Financial
Officer of the Guarantor stating that:
(i) The representations, warranties and agreements of the
Guarantor and the Trust in Section 2 hereof are true and correct
as of the Closing Date and each of the Guarantor and the Trust
has complied with all of its agreements contained herein;
(ii) (A) Neither the Guarantor nor any of its Significant
Subsidiaries has sustained since the date of the latest quarterly
financial statements included in the Prospectus any material loss
or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or
(B) since such date there has not been any change in the capital
stock, allocated patrons' equity or long-term debt of the
Guarantor or any of its Significant Subsidiaries or any material
adverse change, or any development involving a prospective
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material adverse change, in or affecting the general affairs,
management, financial position, stockholders' or patrons' equity
or results of operations of the Guarantor and its subsidiaries
taken as a whole, otherwise than as set forth or contemplated in
the Prospectus; and
(iii) They have carefully examined the Prospectus and, in
their opinion (A) the Prospectus, as of its date, did not include
any untrue statement of a material fact and did not omit to state
any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and (B) since the date of the Prospectus no event has
occurred which should have been set forth in a supplement or
amendment to the Prospectus.
(g) (i) Neither the Guarantor nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus or (ii) since such date there
shall not have been any change in the capital stock, allocated patrons'
equity or long-term debt of the Guarantor or any of its subsidiaries or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' or patrons' equity or results of operations of the
Guarantor and its subsidiaries taken as a whole, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in the
Prospectus.
(h) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act and (ii) no such rating organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of the Securities.
(i) The Underwriters shall have received from ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to such matters as the Underwriters may
reasonably require, and the Guarantor shall have furnished to such
counsel such documents and information as they may reasonably request
for the purpose of enabling them to pass upon such matters.
-12-
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Guarantor and the Trust, jointly and severally, shall
indemnify and hold harmless each Underwriter, its officers, employees
and directors and each person, if any, who controls either of the
Underwriters within the meaning of Section 15 of the Act, from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of
Securities), to which such Underwriter, officer, employee, director or
controlling person may become subject, under the Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of,
or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained (A) in the Preliminary Prospectus, the
Prospectus or in any amendment or supplement thereto, or (B) in any Blue
Sky application or other document prepared or executed by the Guarantor
and the Trust (or based upon any written information furnished by the
Guarantor and the Trust) specifically for the purpose of qualifying any
or all of the Securities under the securities laws of any state or other
jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application"), (ii) the omission or
alleged omission to state in the Preliminary Prospectus, the Prospectus
or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary
to make the statements therein not misleading or (iii) any act or
failure to act, or any alleged act or failure to act, by such
Underwriter in connection with, or relating in any manner to, the
Securities or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii) above
(PROVIDED that the Guarantor and the Trust shall not be liable in the
case of any matter covered by this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from any
such act or failure to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or wilful misconduct), and
shall reimburse such Underwriter and each officer, employee, director
and controlling person promptly upon demand for any legal or other
expenses reasonably incurred by such Underwriter, officer, employee,
director or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; PROVIDED, HOWEVER,
that the Guarantor and the Trust shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue
-13-
statement or omission or alleged omission made in the Preliminary
Prospectus, the Prospectus or in any such amendment or supplement, or in
any Blue Sky Application in reliance upon and in conformity with the
written information furnished to the Guarantor and the Trust by or on
behalf of such Underwriter specifically for inclusion therein and
described in Section 7(e) and PROVIDED FURTHER that as to the
Preliminary Prospectus or the Prospectus this indemnity agreement shall
not inure to the benefit of an Underwriter, its officers, employees,
directors or controlling persons on account of any loss, claim damage,
liability or action arising from the sale of Securities to any person by
such Underwriter if such Underwriter failed to send or give a copy of
the Prospectus as the same may be amended or supplemented and provided
to such Underwriter by the Trust or the Guarantor, to that person, and
the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in the Preliminary
Prospectus was corrected in the Prospectus, or a supplement or amendment
thereto, as the case may be. The foregoing indemnity agreement is in
addition to any liability which the Guarantor and the Trust may
otherwise have to the Underwriters or to any officer, employee, director
or controlling person of the Underwriters.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Guarantor, the Trust and the officers, employees
and directors of the Guarantor, and each person, if any, who controls
the Guarantor, within the meaning of Section 15 of the Act, from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Guarantor, the Trust, any such
officer, employee, director or controlling person may become subject,
under the Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A)
in the Preliminary Prospectus, the Prospectus or in any amendment or
supplement thereto, or (B) in any Blue Sky Application or (ii) the
omission or alleged omission to state in the Preliminary Prospectus, the
Prospectus or in any amendment or supplement thereto or in any Blue Sky
Application any material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to
the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with the written information furnished to the Guarantor by or on behalf
of such Underwriter specifically for inclusion therein and described in
Section 7(e), and shall reimburse the Guarantor, the Trust, and any such
officer, employee or director or controlling person for any legal or
other expenses reasonably incurred by the Guarantor, the Trust, or any
such officer, employee, director, or controlling person in connection
with investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability which
the Underwriters may otherwise have to the Guarantor, the Trust, or any
such officer, employee, director or controlling person.
-14-
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced by
such failure and, PROVIDED FURTHER, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If any
such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under
this Section 7 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; PROVIDED, HOWEVER, that the
indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and its respective officers, employees and
controlling persons who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the indemnified
party against the indemnifying party under this Section 7 if, in the
reasonable judgment of the indemnified party, it is advisable for the
indemnified party and those officers, employees, directors and
controlling persons to be jointly represented by separate counsel, and
in that event the fees and expenses of such separate counsel shall be
paid by the indemnifying party. It is understood that the indemnifying
party shall not be liable for the fees and expenses of more than one
separate firm (in addition to local counsel in each jurisdiction) for
all indemnified parties in connection with any proceeding or related
proceedings. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim,
action, suit or proceeding, or (ii) be liable for any settlement of any
such action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with its written consent
or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss of liability by reason of such
settlement or judgment.
-15-
(d) If the indemnification provided for in this Section 7 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 7(a) or 7(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Guarantor
and the Trust on the one hand and each of the Underwriters on the other
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
Guarantor and the Trust on the one hand and each of the Underwriters on
the other with respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations. The relative
benefits received by the Guarantor and the Trust on the one hand and
each of the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Securities purchased under this Agreement
(before deducting expenses) received by the Guarantor and the Trust on
the one hand, and the total fees received by such Underwriter with
respect to the Securities purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the
Securities under this Agreement, in each case as set forth under
"Underwriting" in the Prospectus. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Guarantor and the Trust on the
one hand or such Underwriter, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Guarantor, the Trust and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 7(d) were to be determined by pro
rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in
this Section 7(d) shall be deemed to include, for purposes of this
Section 7(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(d),
each Underwriter shall not be required to contribute any amount in
excess of the amount by which the total price at which the Securities
sold and distributed by it was offered to the purchasers exceeds the
-16-
amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 1l(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The Underwriters confirm that the statements with respect to
the offering of the Securities set forth in the bottom paragraph on the
cover page of, and under the caption "Underwriting" in the Preliminary
Prospectus and the Prospectus are correct and constitute the only
information furnished in writing to the Guarantor and the Trust by or on
behalf of the Underwriters specifically for inclusion in the Prospectus.
8 TERMINATION. The obligations of either Underwriter hereunder
may be terminated by it by notice given to and received by the Guarantor and the
Trust prior to delivery of and payment for the Securities if, prior to that
time, (i) trading in securities generally on the New York Stock Exchange or the
American Stock Exchange or in the over-the-counter market, or trading in any
securities of the Guarantor or the Trust on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall have
been established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal or
New York State authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of such Underwriter, impracticable
or inadvisable to proceed with the offering or delivery of the Securities on the
terms and in the manner contemplated in the Prospectus.
9 REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 8 hereof or because of any
refusal, inability or failure on the part of the Guarantor and the Trust to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by the Underwriters, the Guarantor and the Trust shall
reimburse the Underwriters for the reasonable fees and expenses of their counsel
and for such other out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of the Securities, and
upon demand the Guarantor and the Trust shall pay the full amount thereof to the
Underwriters.
-17-
10 NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to First Union Capital Markets, One
First Union Center, TW-▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Attention: _______________ (Fax:____________);
(b) if to the Guarantor shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Guarantor set
forth in the Prospectus, Attention: Chief Financial Officer (Fax:
(▇▇▇) ▇▇▇-▇▇▇▇));
(c) if to the Trust shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Trust set forth in the
Prospectus, Attention: ____________________(Fax:
----------------).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
11 PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Guarantor, the
Trust and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(x) the representations, warranties, indemnities and agreements of the Guarantor
and the Trust contained in this Agreement shall also be deemed to before the
benefit of the officers, employees and directors of the Underwriters and the
person or persons, if any, who control the Underwriters within the meaning of
Section 15 of the Act and (y) the indemnity agreement of the Underwriters
contained in Section 7(b) of this Agreement shall be deemed to be for the
benefit of officers, employees and directors of the Guarantor and any person
controlling the Guarantor within the meaning of Section 15 of the Act. Nothing
in this Agreement is intended or shall be construed to give any person, other
than the persons referred to in this Section 11, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.
12 SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Guarantor, the Trust and the Underwriters
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.
13 DEFINITION OF THE TERMS "BUSINESS DAY" AND "SIGNIFICANT
SUBSIDIARY". For purposes of this Agreement, (a) "business day" means any day on
which the New York Stock Exchange, Inc. is open for trading and (b) "Significant
Subsidiary" has the meaning set forth in Rule 1-02 of Regulation S-X.
-18-
14 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
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.
-19-
If the foregoing correctly sets forth the agreement between the
Guarantor, the Trust and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
SOUTHERN STATES CAPITAL TRUST I
By: _______________________________________
Name:
Title: Administrative Trustee
SOUTHERN STATES COOPERATIVE INC.
By:________________________________________
Name:
Title:
Accepted:
FIRST UNION CAPITAL MARKETS CORP.
By: _____________________________
Name:
Title:
▇▇▇▇▇▇ BROTHERS
By: _____________________________
Name:
Title:
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
By: _____________________________
Name:
Title:
-20-
EXHIBIT A
FORM OF OPINION OF
COUNSEL TO THE GUARANTOR TO BE DELIVERED
PURSUANT TO SECTION 6(c)
(i) The Guarantor and each of its subsidiaries have been duly formed and
are validly existing as corporations, limited partnerships or limited liability
companies, as the case may be, in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do business and
are in good standing as foreign corporations, limited partnerships or limited
liability companies, as the case may be, in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses (as set forth in certificates of officers of the Guarantor upon which
such counsel is relying without independent investigation) requires such
qualification and have all corporate, partnership or limited liability company,
as the case may be, power and authority necessary to own or hold their
respective properties and conduct the businesses in which they are engaged as
described in the Prospectus;
(ii) The Guarantor has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Guarantor have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus; and all of
the issued shares of capital stock, partnership interests or limited liability
company membership interests, as the case may be, of each subsidiary of the
Guarantor have been duly and validly authorized and issued and (except for
partnership interests of general partners and except to the extent the limited
liability company agreements governing the respective limited liability
companies provide otherwise) are fully paid, non-assessable and are owned
directly or indirectly by the Guarantor, to such counsel's knowledge free and
clear of all liens, encumbrances, or claims;
(iii) To the best of such counsel's knowledge, based solely on inquiry
of the Guarantor's General Counsel, and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to which the
Guarantor or any of its subsidiaries is a party or of which any property or
assets of the Guarantor or any of its subsidiaries is the subject which could be
expected to have a Material Adverse Effect; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(iv) The execution and delivery of the Guarantor Agreements have been
duly authorized by all necessary corporate action of the Guarantor, and the
Guarantor Agreements and the Trust Securities conform to the description thereof
in the Prospectus;
A-1
(v) The Underwriting Agreement has been duly authorized, executed and
delivered by the Guarantor and the Trust and constitutes a valid and binding
agreement of the Guarantor and the Trust enforceable against the Guarantor 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;
(vi) The issue and sale of the Securities, the compliance by the
Guarantor with all of the provisions of the Underwriting Agreement, and the
consummation of the transactions contemplated thereby, will not conflict with or
result in a material 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 known to such counsel to which the
Guarantor or any of its subsidiaries is a party or by which the Guarantor or any
of its subsidiaries is bound or to which any of the property or assets of the
Guarantor or any of its subsidiaries is subject which breach is reasonably
likely to have a Material Adverse Effect, nor will such actions result in any
violation of the provisions of the articles of incorporation, by-laws of the
Guarantor or any of its subsidiaries or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or body of
the United States or the State of Virginia having jurisdiction over the
Guarantor or any of its subsidiaries or any of their properties or assets;
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
Underwriters, 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 Underwriting Agreement by the
Guarantor and the consummation of the transactions contemplated thereby;
(vii) Neither the Guarantor, 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;
(viii) The statements set forth in the Prospectus under the captions
"Description of the Capital Securities", "The Guarantee", "Description of the
Junior Subordinated Debentures" and "Effect of Obligations under the Junior
Subordinated Debentures, the Guarantee and the Expense Agreement" insofar as
such statements constitute a summary of legal matters, documents or proceedings
referred to therein are correct in all material respects;
A-2
(ix) The Registration Statement and the Prospectus as amended or
supplemented prior to Closing Date (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion),
comply as to form in all material respects with the requirements of the Act and
the rules and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (viii) above, they have no reason to
believe that, as of its effective date and as of the Closing Date, the
Registration Statement or any amendment thereto made by the Trust or the
Guarantor prior to the Closing Date (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that, as of its date and as of the Closing Date, the
Prospectus as amended or supplemented prior to the Closing Date (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) 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
they do not know of any amendment to the Registration Statement required to be
filed or any contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or described as
required to be described in the Registration Statement or the Prospectus as
amended or, supplemented which are not so filed.
In rendering such opinion, such counsel may (i) state that their opinion
is limited to matters governed by the Federal laws of the United States of
America and the laws of the State of Virginia; and (ii) in giving the opinions
referred to in Section (i) above (solely with regard to organization and
qualification of the Guarantor's subsidiaries) and Section (ii) above (solely
with regard to capital stock of subsidiaries of the Guarantor being duly and
validly authorized and issued and fully paid and non-assessable), state that
they are relying on an opinion or opinions of other counsel as to such matters,
provided that the Underwriters shall have received such opinion or opinions, in
form and substance satisfactory to Underwriters' counsel, of other counsel.
A-3
EXHIBIT B
FORM OF OPINION OF DELAWARE COUNSEL
TO THE GUARANTOR AND THE TRUST
TO BE DELIVERED PURSUANT TO SECTION 6(d)
(i) 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 as a business trust have been made;
(ii) 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
to 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 Trust
Securities, all as described in the Trust Agreement;
(iii) The Trust Agreement constitutes a valid and binding obligation of
the Guarantor and the Trustees, enforceable against the Guarantor and the
Trustees, respectively, in accordance with its terms;
(iv) 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;
(v) The 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 (viii) below, non-assessable undivided beneficial interests in the assets of
the Trust;
(vi) Once duly and validly issued in accordance with the Trust
Agreement, the Securities will entitle the holders thereof to the benefits of
the Trust Agreement;
(vii) 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;
B-1
(viii) The holders of 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 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 Securities and the
issuance of replacement certificates representing 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 Securities and
the issuance of replacement certificates representing Securities;
(ix) Under the Delaware Business Trust Act and the Trust Agreement, the
issuance of the Securities is not subject to preemptive rights;
(x) 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 counsel 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 Trust Agreement;
(xi) 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 of Trust 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 counsel to
have jurisdiction over the Trust;
(xii) Assuming that the Trust is treated as a grantor trust or
partnership for Federal income tax purposes, the holders of the Securities
(other than those holders of the 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.
In rendering such opinion, such counsel may (a) state that their
opinion is limited to matters governed by the laws of the State of Delaware,
excluding the securities laws thereof; and (b) in giving the opinions referred
to in paragraphs (iii) and (vi) above, qualify the same by stating that they are
subject to (1) applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, fraudulent transfer and similar law 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, (2) 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), (3) applicable laws relating to
fiduciary duties, (4) public policy limitations with respect to exculpation,
contribution and indemnity provisions, and (5) the limitation that a court
applying Delaware law will enforce a liquidated damages provision in a contract
B-2
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. Such counsel may also state that
such opinion is subject to reasonable and customary exceptions and is based on
factual assumptions stated therein.
B-3
SCHEDULE I
NUMBER OF
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ----------
First Union Capital Markets Corp. ................................
▇▇▇▇▇▇ Brothers...................................................
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC.............................
Total.........................................................
==========
SCHEDULE II
TITLE OF SECURITIES:
[___%] Capital Securities, Series __
PRICE TO PUBLIC:
100% of the liquidation amount of the Securities
PURCHASE PRICE TO UNDERWRITERS:
100% of the liquidation amount of the Securities
UNDERWRITERS' COMPENSATION:
As compensation to the Underwriters for their commitments hereunder, and
in view of the fact that the proceeds of the sale of the Securities will
be used by the Trust to purchase the Debentures of the Company, the
Company hereby agrees to pay at the Closing Date to the several
Underwriters, an amount equal to $________ per capital security for the
Firm Securities to be delivered on the Closing Date and any Optional
Securities to be delivered on the Second Closing Date.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) Funds
CLOSING LOCATION:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
