EXHIBIT B-10(k)(1)
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
October 5, 1999
Gold ▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Gentlemen:
Pursuant to the commitment letter dated October 13, 1998, by and
between Gold ▇▇▇▇ Inc. ("Gold ▇▇▇▇") and Southern States Cooperative,
Incorporated, and the Terms Sheet attached thereto, as amended by letter
dated March 29, 1999 (the "Commitment Letter"), 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 "Company"), agree, subject
to terms and conditions stated herein, that the Trust will issue and sell
to Gold ▇▇▇▇ Inc. (the "Purchaser") an aggregate of $60,000,000 liquidation
amount of Step-Up Rate Capital Securities, Series A (liquidation amount
$1,000 per capital security) (the "Capital Securities") representing
undivided beneficial interests in the 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 and First Union
National Bank, as trustee (the "Guarantee Trustee"). The Trust 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
Capital Securities, the "Trust Securities"), $61,856,000 aggregate
principal 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 Junior Subordinated Indenture (the "Indenture")
between the Company and First Union National Bank, as trustee (the
"Debenture Trustee").
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 Bank, as Property Trustee ("Property Trustee") and 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 Company (the "Administrative Trustees").
The Property Trustee, the Delaware Trustee and the Administrative Trustees
are collectively referred to herein as the "Trustees."
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, the "Securities"). This Purchase Agreement is
referred to herein as the "Agreement."
The Securities have not been registered under the Securities Act
of 1933, as amended (the "Securities Act"), and are being sold pursuant to
this 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 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 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 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, 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 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 Investment Company Act of 1940, as amended, and the rules
and regulations of the Securities and Exchange Commission (the
"Commission") thereunder.
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 Buyers") as defined in Rule 144A under the Securities
Act, as such rule may be amended from time to time ("Rule 144A") or,
if any such person is buying 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.
(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").
(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 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 Act"), to furnish to you and any other holders of the
Securities and 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 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 ("PORTAL")
securities in accordance with the rules and regulations adopted 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").
(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 Company Act of 1940 and the rules and regulations of
the Commission thereunder.
(g) To continue, for as long as Gold ▇▇▇▇ 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 ▇▇▇▇, 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 ▇▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇'▇ Investor Service, Duff &
▇▇▇▇▇▇ Rating Co. and Fitch Investor Services, and at the request of
Gold ▇▇▇▇, 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 ▇▇▇▇ of the reasons for its belief,
the Company has the right not to pursue such a rating; provided,
however, that if Gold ▇▇▇▇ is of a contrary opinion and advises the
Company of the reasons for its belief, and the Company does not concur
with Gold ▇▇▇▇, 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 ▇▇▇▇ 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 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 ▇▇▇▇. The Company shall pay the expense of such
opinion; provided, however, that Gold ▇▇▇▇ 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) ▇▇▇▇ & Valentine, 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) Potter ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ 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.
9. Redemption.
(a) Mandatory Redemption. Notwithstanding any other provision
of the 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 ▇▇▇▇, 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"). 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 ▇▇▇▇, but the Company shall have the right to select for
mandatory redemption whichever type of Securities may be held by Gold
▇▇▇▇. 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
▇▇▇▇, 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 ▇▇▇▇ will have no effect on the Company's
obligations upon a Mandatory Redemption Event with respect to the
Securities still held by Gold ▇▇▇▇.
(b) Optional Redemption. Notwithstanding any other provision of
the Securities, this Agreement or the Guarantor Agreements and during
the period and to the extent such Securities are held by Gold ▇▇▇▇,
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
Capital Securities and the Preferred Securities are held by Gold ▇▇▇▇,
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 ▇▇▇▇
by facsimile or by e-mail at the address specified in Section 11 below
or as otherwise furnished to the Company by Gold ▇▇▇▇ in writing.
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 ▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ Attention: Chief Financial Officer (Fax: (▇▇▇) ▇▇▇-▇▇▇▇);
and with a copy to the General Counsel at the same address (Fax: (770)
▇▇▇-▇▇▇▇);
(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: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Chief Financial Officer (Fax: (▇▇▇) ▇▇▇-▇▇▇▇);
(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: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Administrative Trustees (Fax: (▇▇▇) ▇▇▇-▇▇▇▇).
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 ▇▇▇▇ 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.
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 ▇▇▇▇, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
SOUTHERN STATES CAPITAL TRUST I
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Administrative Trustee
SOUTHERN STATES COOPERATIVE, INCORPORATED
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and Chief
Financial Offices
Accepted:
GOLD ▇▇▇▇ INC.
By: /s/ M. A. ▇▇▇▇▇▇▇▇
Name: M. A. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
EXHIBIT A
TRANSFEREE LETTER OF REPRESENTATION
Southern States Cooperative, Incorporated ________________________
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ________________________
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ________________________
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.
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: ____________________
EXHIBIT B
FORM OF OPINION OF
COUNSEL TO THE COMPANY TO BE DELIVERED
PURSUANT TO SECTION 7(b)
October 5, 1999
Gold ▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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 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.
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.
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 Potter ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Delaware
counsel to the Trust.
Very truly yours,
▇▇▇▇ & VALENTINE, L.L.P.
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;
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 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.
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. 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.
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 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. ▇▇▇▇ & Valentine, L.L.P. and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
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 ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Schedule I
SOUTHERN STATES COOPERATIVE, INCORPORATED
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
FIRST UNION NATIONAL BANK
GOLD ▇▇▇▇ INC.
13799
