Exhibit 1(a)
MACSAVER FINANCIAL SERVICES, INC.
Draft of June 19, 1997
Debt Securities
unconditionally guaranteed as to the payment of principal, premium,
if any, and interest by
Heilig-Meyers Company
Underwriting Agreement
_________, 19__
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Ladies and Gentlemen:
From time to time MacSaver Financial Services, Inc., a Delaware
corporation (the "Company"), and Heilig-Meyers Company, a Virginia corporation
(the "Guarantor"), propose to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, the Company proposes to issue and sell to
the firms named in Schedule I to the applicable Pricing Agreement (such firms
DC_LAN01\52911.8
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its debt securities (the "Debt
Securities") specified in Schedule II to such Pricing Agreement (with respect to
such Pricing Agreement, the "Designated Debt Securities"). Such Debt Securities,
including the Designated Debt Securities, will be unconditionally guaranteed as
to the payment of principal, premium, if any, and interest (the "Guarantees") by
the Guarantor. The Debt Securities and the Guarantees are hereinafter
collectively called the "Securities", and the Designated Debt Securities and the
Guarantees relating thereto ("Designated Guarantees") are hereinafter
collectively called the ("Designated Securities").
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representatives. This Underwriting Agreement
shall not be construed as an obligation of the Company or the Guarantor to sell
any of the Securities or as an obligation of any of the Underwriters to purchase
the Securities. The obligation of each of the Company and the Guarantor to issue
and sell any of the Securities, on the one hand, and the obligation of any of
the Underwriters to purchase any of the Securities, on the other hand, shall be
evidenced by the Pricing Agreement with respect to the Designated Securities
specified therein. Each Pricing Agreement shall specify the aggregate principal
amount of the Designated Debt Securities comprising a part of such Designated
Securities, the initial public offering price of such Designated Securities, the
purchase price to the Underwriters of such Designated Securities, the names of
the Underwriters of such Designated Securities, the names of the Representatives
of such Underwriters and the principal amount of such Designated Debt Securities
to be purchased by each Underwriter and shall set forth the date, time and
manner of delivery of such Designated Securities and payment therefor. The
Pricing Agreement shall also specify (to the extent not set forth in the
Indenture and the registration statement and prospectus with respect thereto)
the terms of such Designated Securities. A Pricing Agreement shall be in the
form of an executed writing (which may be in counterparts), and may be evidenced
by an exchange of telegraphic communications or any other rapid transmission
device designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
-2-
DC_LAN01\52911.8
2. Each of the Company and the Guarantor, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-_____ (the "Initial Registration Statement") in respect of the
Securities 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 Representatives and, excluding exhibits to
such registration statement, but including all documents incorporated
by reference in the prospectus contained therein, to the
Representatives for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed or transmitted for filing with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act, each in the form heretofore delivered
to the Representatives); and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment
thereto or the 462(b) Registration Statement, if any, has been issued
and no proceeding for that purpose has been initiated or threatened by
the Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) under the Act, is hereinafter called a "Preliminary Prospectus";
the various parts of the Initial Registration Statement and the Rule
462(b) Registration Statement, if any, including all exhibits thereto
and the documents incorporated by reference in the prospectus contained
in the Initial Registration Statement at the time such part of the
Initial Registration Statement became effective or such part of the
Rule 462(b) Registration Statement, if any, became or hereafter becomes
effective but excluding Form T-1, each as amended at the time such part
of the registration statement became effective, are hereinafter
collectively called the "Registration Statement"; the prospectus
relating to the Securities, 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, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under
the Act, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment or supplement to any
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 such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the
Company or the Guarantor filed pursuant to Sections 13(a) or 15(d) of
the Exchange Act after the effective date of the Registration Statement
that
-3-
DC_LAN01\52911.8
is incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in relation to
the applicable Designated Securities in the form in which it is filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing);
(b) 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, and none of such documents
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; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform 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 and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; 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 Company and the Guarantor by an
Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating
to such Securities;
(c) 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
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 Company and the
Guarantor by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
-4-
DC_LAN01\52911.8
(d) Neither the Company, the Guarantor nor any of their
subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference 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 the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any change in the capital stock or long-term debt of the Company,
the Guarantor or any of their subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company,
the Guarantor or any of their subsidiaries, otherwise than as set forth
or contemplated in the Prospectus;
(e) The Company been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware and the Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Virginia, and each has power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus, and each has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction; and each
subsidiary of the Company or the Guarantor has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has been duly qualified
as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction;
(f) All of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; 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 and conform to the description of the
Securities contained in the Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company or the Guarantor have
been duly and validly authorized and issued, are fully paid and
non-assessable and (except for directors' qualifying shares) are owned
directly or indirectly by the Company or the Guarantor, as the case may
be, free and clear of all liens, encumbrances, equities or claims;
-5-
DC_LAN01\52911.8
(g) The Securities have been duly authorized, and, when
Designated Debt Securities are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Securities and the Indenture, against payment of the consideration
therefor in accordance herewith, such Designated Securities will have
been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company (in the
case of Designated Debt Securities) and the Guarantor (in the case of
Designated Guarantees) entitled to the benefits provided by the
Indenture, which will be substantially in the form filed as an exhibit
to the Registration Statement; the Indenture has been duly authorized
and duly qualified under the Trust Indenture Act and, at the Time of
Delivery for such Designated Securities (as defined in Section 4
hereof), the Indenture will constitute a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles; and the Indenture conforms, and the
Designated Securities will conform, to the descriptions thereof
contained in the Prospectus as amended or supplemented with respect to
such Designated Securities;
(h) The issue and sale of the Securities and the compliance by
the Company and the Guarantor with all of the provisions of the
Securities, the Indenture, this Agreement and any Pricing Agreement,
and the consummation of the transactions herein and therein
contemplated 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 Guarantor or any of
their subsidiaries is a party or by which the Company or the Guarantor
or any of their subsidiaries is bound or to which any of the property
or assets of the Company or the Guarantor is subject, nor will such
action result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company, the Guarantor or any of their
subsidiaries or any of their properties, which breach, violation or
default would have a material adverse effect on the financial position,
stockholders' equity, or results of operations of the Guarantor and its
subsidiaries taken as a whole, or upon the issue and sale of the
Securities and the compliance by the Company and the Guarantor with all
of the provisions of the Securities, the Indenture, this Agreement and
any Pricing Agreement, and the consummation of the transactions herein
and therein contemplated, nor will such action result in any violation
of the provisions of the Articles of Incorporation or the By-laws of
the Company or the Guarantor; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company or the Guarantor of the
transactions contemplated by this Agreement or any Pricing Agreement or
the Indenture, except such as have been, or will have been prior to the
Time of Delivery, obtained under the Act and the Trust Indenture Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
-6-
DC_LAN01\52911.8
laws in connection with the purchase and distribution of the Securities
by the Underwriters;
(i) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Debt Securities" or
"Description of Notes", insofar as they purport to constitute a summary
of the terms of the Securities, and under the caption "United States
Taxation", insofar as they are or refer to statements of United States
law or legal conclusions relating thereto, are accurate, complete and
fair in all material respects;
(j) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company, the
Guarantor or any of their subsidiaries is a party or of which any
property of the Company, the Guarantor or any of their subsidiaries is
the subject which the Company or the Guarantor has reasonable cause to
believe would either individually or in the aggregate have a material
adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the Company,
the Guarantor or their subsidiaries taken as a whole; and, to the best
of the Company's and the Guarantor's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(k) Neither the Company nor the Guarantor is or, after giving
effect to the offering and sale of the Securities, will be an
"investment company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(l) None of the Company, the Guarantor or any of their
affiliates does business with the government of Cuba or with any person
or affiliate located in Cuba within the meaning of the U.S. Treasury
Department's Cuban Assets Control Regulations, the Cuban Liberty and
Democratic Solidarity ("LIBERTAD") Act of 1996 or Section 517.075,
Florida Statutes; and
(m) Deloitte & Touche LLP, who have certified certain
financial statements of the Guarantor and its subsidiaries (including
the Company), are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder.
-7-
DC_LAN01\52911.8
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant
to the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company and the Guarantor
to the Representatives for the account of such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price therefor by wire
transfer or certified or official bank check or checks, payable to the order of
the Company in the funds specified in such Pricing Agreement, all in the manner
and at the place and time and date specified in such Pricing Agreement or at
such other place and time and date as the Representatives and the Company may
agree upon in writing, such time and date being herein called the "Time of
Delivery" for such Securities.
5. Each of the Company and the Guarantor, jointly and severally, agrees
with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended or supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Securities and prior to the Time
of Delivery for such Securities which shall be disapproved by the
Representatives for such Securities promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment
or supplement after such Time of Delivery and furnish the
Representatives with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by
the Company or the Guarantor with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of such Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any prospectus
-8-
DC_LAN01\52911.8
relating to the Securities, of the suspension of the qualification of
such Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any such stop order or of any such
order preventing or suspending the use of any prospectus relating to
the Securities or suspending any such qualification, to promptly use
its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives 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 such Securities, provided that in connection therewith
neither the Company nor the Guarantor shall be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with copies of the Prospectus as
amended or supplemented in New York City in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Securities and if at such time any event shall have
occurred 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 in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend
or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the Act, the Exchange Act or the Trust Indenture Act, to notify
the Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Guarantor and its
subsidiaries (which need not be audited) complying
-9-
DC_LAN01\52911.8
with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Guarantor, Rule
158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the later of (i) the termination of trading restrictions for
such Designated Securities, as notified to the Company by the
Representatives and (ii) the Time of Delivery for such Designated
Securities, not to offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company or the Guarantor, or any
guarantees by the Company or the Guarantor of debt securities of
others, which mature more than one year after such Time of Delivery and
which are substantially similar to such Designated Debt Securities or
Designated Guarantees, without the prior written consent of the
Representatives; and
(f) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
6. Each of the Company and the Guarantor, jointly and severally,
covenants and agrees with the several Underwriters that the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of
their counsel and accountants in connection with the registration of the
Securities 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 and dealers; (ii)
the cost of printing or producing any Agreement among Underwriters, this
Agreement, any Pricing Agreement, any Indenture, any Blue Sky and Legal
Investment Memoranda, closing documents (including any compilations thereof) and
any other documents in connection with the offering, purchase, sale and delivery
of the Securities; (iii) all expenses in connection with the qualification of
the Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and Legal Investment Surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) any filing fees incident to, and
the fees and disbursements of counsel for the Underwriters in connection with,
any required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Securities; (vi) the cost of preparing the
Securities; (vii) the fees and expenses of any Trustee and any agent of any
Trustee and the fees and disbursements of counsel for any Trustee in connection
with any Indenture and the Securities; and (viii) all other costs and expenses
incident to the performance of its obligations
-10-
DC_LAN01\52911.8
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, and Sections 8
and 11 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.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company and the
Guarantor in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that the Company and the
Guarantor shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
the applicable Designated Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective the Rule 462(b) Registration Statement shall have
become effective by 10:00 p.m., Washington, D.C. time on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions, (a draft of each such opinion
is attached as Annex III(a) hereto) dated the Time of Delivery for such
Designated Securities, with respect to the incorporation of the
Company, the validity of the Designated Securities being delivered at
such Time of Delivery, the Registration Statement, the Prospectus, and
such other related matters as the Representatives may reasonably
request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
-11-
DC_LAN01\52911.8
(c) McGuire, Woods, Battle & Boothe, L.L.P., counsel for the
Company and the Guarantor, or other counsel for the Company and the
Guarantor satisfactory to the Representatives shall have furnished to
the Representatives their written opinion (a draft of each such opinion
is attached as Annex III(b) hereto), dated the Time of Delivery for
such Designated Securities, in form and substance satisfactory to the
Representatives, to the effect that:
(i) Each of the Company and the Guarantor has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus as amended or supplemented;
(ii) The Guarantor has an authorized capitalization as
set forth in the Prospectus as amended or supplemented and all
of the issued shares of capital stock of the Company and the
Guarantor have been duly and validly authorized and issued and
are fully paid and non-assessable;
(iii) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company, the
Guarantor or any of their subsidiaries is a party or of which
any property of the Company, the Guarantor or any of their
subsidiaries is the subject which could be reasonably expected
to individually or in the aggregate have a material adverse
effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the
Company, the Guarantor or their subsidiaries taken as a whole;
and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with
respect to the Designated Securities have been duly
authorized, executed and delivered by the Company and the
Guarantor;
(v) The Designated Securities have been duly
authorized, executed, authenticated, issued and delivered and
constitute valid and legally binding obligations of the
Company (in the case of the Designated Debt Securities) and
the Guarantor (in the case of the Designated Guarantees)
entitled to the benefits provided by the Indenture;
-12-
DC_LAN01\52911.8
(vi) The Indenture has been duly authorized, executed
and delivered by the Company and the Guarantor and (assuming
the Indenture has been duly authorized, executed and delivered
by the Trustee) constitutes a valid and legally binding
obligation of the Company and the Guarantor, enforceable
against the Company and the Guarantor in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles; and the Indenture has been duly qualified
under the Trust Indenture Act;
(vii) The issue and sale of the Designated Securities and
the compliance by the Company and the Guarantor with all of
the provisions of the Designated Securities, the Indenture,
this Agreement and the Pricing Agreement with respect to the
Designated Securities and the consummation of the transactions
herein and therein contemplated 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 known to such counsel to which the Company, the
Guarantor or any of their subsidiaries is a party or by which
the Company, the Guarantor or any of their subsidiaries is
bound or to which any of the property or assets of the
Company, the Guarantor or any of their subsidiaries is
subject, nor will such actions result in any violation of any
statute or any order, rule or regulation known to such counsel
of any court or governmental agency or body having
jurisdiction over the Company, the Guarantor or any of their
subsidiaries or any of their properties, which breach,
violation or default would have a material adverse effect on
the financial position, stockholders' equity, or results of
operations of the Guarantor and its subsidiaries taken as a
whole, or upon the issue and sale of the Designated Securities
and the compliance by the Company and the Guarantor with all
of the provisions of the Designated Securities, the Indenture,
the Underwriting Agreement and any Pricing Agreement, and the
consummation of the transactions therein contemplated, nor
will such action result in any violation of the provisions of
the Articles of Incorporation or the By-laws of the Company or
the Guarantor;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the issue and sale
of the Designated Securities or the consummation by the
Company or the Guarantor of the transactions contemplated by
this Agreement or such Pricing Agreement or the Indenture,
except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations,
orders, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Securities by the
Underwriters;
-13-
DC_LAN01\52911.8
(ix) The statements set forth in the Prospectus as
amended or supplemented under the captions "Description of
Debt Securities" or "Description of Notes", insofar as they
purport to constitute a summary of the terms of the
Securities, and under the caption "United States Taxation",
insofar as they are or refer to statements of United States
law or legal conclusions relating thereto, are accurate,
complete and fair in all material respects;
(x) Neither the Company nor the Guarantor is an
"investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the
Investment Company Act;
(xi) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
financial statements, related schedules and financial data
included therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder; and they have no reason to believe
that any of such documents, when they became effective or were
so filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act,
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, in the case of
other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material
fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed,
not misleading; and
(xii) The Registration Statement and the Prospectus as
amended or supplemented and any further amendments and
supplements thereto made by the Company or the Guarantor prior
to the Time of Delivery for the Designated Securities (other
than the financial statements, related schedules and financial
data included 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 Trust Indenture 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 to the extent indicated in
the opinion in subsection (ix) of this Section 7(c), they have
no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made
by the
-14-
DC_LAN01\52911.8
Company or the Guarantor prior to the Time of Delivery (other
than the financial statements, related schedules and financial
data included 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, the Prospectus as amended
or supplemented or any further amendment or supplement thereto
made by the Company or the Guarantor prior to the Time of
Delivery (other than the financial statements, related
schedules and financial data included 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
or that, as of the Time of Delivery, either the Registration
Statement or the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company or
the Guarantor prior to the Time of Delivery (other than the
financial statements, related schedules and financial data
included therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or
omits 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;
(d) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to such Designated Securities and at the Time of Delivery
for such Designated Securities, the independent accountants of the
Company and the Guarantor who have certified the financial statements
of the Guarantor and its subsidiaries (including the Company) included
or incorporated by reference in the Registration Statement shall have
furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed
with the Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of
Delivery, respectively, and with respect to such letter dated such Time
of Delivery, as to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to the
Representatives (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex II(a) hereto and a
draft of the form of letter to be delivered on the effective date of
any post-effective amendment to the Registration Statement and as of
each Time of Delivery is attached as Annex II(b) hereto);
-15-
DC_LAN01\52911.8
(e) (i) None of the Company, the Guarantor or any of their
subsidiaries shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Securities 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 as amended prior to the date of the
Pricing Agreement relating to the Designated Securities, and (ii) since
the respective dates as of which information is given in the Prospectus
as amended prior to the date of the Pricing Agreement relating to the
Designated Securities there shall not have been any change in the
capital stock or long-term debt of the Company, the Guarantor or any of
their subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company, the Guarantor or any of its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus as amended prior to the
date of the Pricing Agreement relating to the Designated Securities,
the effect of which, in any such case described in Clause (i) or (ii),
is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Securities on the terms and
in the manner contemplated in the Prospectus as first amended or
supplemented relating to the Designated Securities;
(f) On or after the date of the Pricing Agreement relating to
the Designated Securities (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or (if the Guarantor has
debt securities or preferred stock that is rated) the Guarantor' debt
securities or preferred stock 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 organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
or the Guarantor's debt securities or preferred stock;
(g) On or after the date of the Pricing Agreement relating to
the Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Company's or the Guarantor's
securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either Federal or New York
or Virginia State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such
event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the
-16-
DC_LAN01\52911.8
Designated Securities on the terms and in the manner contemplated in
the Prospectus as amended or supplemented relating to the Designated
Securities;
(h) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(i) The Company and the Guarantor shall have furnished or
caused to be furnished to the Representatives at the Time of Delivery
for the Designated Securities a certificate or certificates of officers
of the Company and the Guarantor satisfactory to the Representatives as
to the accuracy of the representations and warranties of the Company
and the Guarantor herein at and as of such Time of Delivery, as to the
performance by the Company and the Guarantor of all of their respective
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of
this Section and as to such other matters as the Representatives may
reasonably request.
8. (a) Each of the Company and the Guarantor, jointly and severally,
will indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that neither the Company nor the Guarantor shall be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities.
-17-
DC_LAN01\52911.8
(b) Each Underwriter will indemnify and hold harmless the Company and
the Guarantor against any losses, claims, damages or liabilities to which the
Company or the Guarantor may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company or Guarantor by
such Underwriter through the Representatives expressly for use therein; and will
reimburse the Company and the Guarantor for any legal or other expenses
reasonably incurred by the Company or the Guarantor in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
-18-
DC_LAN01\52911.8
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantor on the one hand and
the Underwriters of the Designated Securities on the other from the offering of
the Designated Securities to which such loss, claim, damage or liability (or
action in respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and the
Guarantor on the one hand and the Underwriters of the Designated Securities on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Guarantor on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company and the
Guarantor bear to the total underwriting discounts and commissions received by
such Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Guarantor on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantor and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include 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
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the applicable Designated
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Securities
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Securities and not
joint.
-19-
DC_LAN01\52911.8
(e) The obligations of the Company and the Guarantor under this Section
8 shall be in addition to any liability which the Company or the Guarantor may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company or the Guarantor and to each person, if any, who controls the Company or
the Guarantor within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall have the right
to postpone the Time of Delivery for such Designated Securities for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
-20-
DC_LAN01\52911.8
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter, the Company or the Guarantor, except for the expenses to be borne
by the Company, the Guarantor and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Guarantor and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, the
Company or the Guarantor, or any officer or director or controlling person of
the Company or the Guarantor, and shall survive delivery of and payment for the
Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor the Guarantor shall then be under any liability
to any Underwriter with respect to the Designated Securities covered by such
Pricing Agreement except as provided in Sections 6 and 8 hereof; but, if for any
other reason Designated Securities are not delivered by or on behalf of the
Company and the Guarantor as provided herein, the Company and the Guarantor,
jointly and severally, will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but neither the Company nor the
Guarantor shall then be under any further liability to any Underwriter with
respect to such Designated Securities except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
-21-
DC_LAN01\52911.8
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company or the Guarantor shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company or
the Guarantor, as applicable, set forth in the Registration Statement:
Attention: Secretary; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company and the Guarantor by the Representatives
upon request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company, the Guarantor
and, to the extent provided in Sections 8 and 10 hereof, the officers and
directors of the Company, the Guarantor and each person who controls the
Company, the Guarantor or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
-22-
DC_LAN01\52911.8
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
Very truly yours,
MacSaver Financial Services, Inc.
By:
Name:
Title:
Heilig-Meyers Company
By:
Name:
Title:
-23-
DC_LAN01\52911.8
ANNEX I
Pricing Agreement
[Names of Representatives]
As Representatives of the several
Underwriters named in Schedule I hereto
[Address of Representatives]
, 199_
Ladies and Gentlemen:
MacSaver Financial Services, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein and in
the Underwriting Agreement, dated _____ __, 1996 (the "Underwriting Agreement"),
to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Notes specified in Schedule II hereto (the "Notes"). The
Notes will be unconditionally guaranteed as to the payment of principal,
premium, if any, and interest (the "Guarantees") by Heilig-Meyers Company, a
Virginia corporation (the "Guarantor"). The Notes and the Guarantees are
hereinafter collectively called the "Securities". Each of the provisions of the
Underwriting Agreement is incorporated herein by reference in its entirety, and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as of
the date of this Pricing Agreement, except that each representation and warranty
which refers to the Prospectus in Section 2 of the Underwriting Agreement shall
be deemed to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in relation
to the Prospectus as amended or supplemented relating to the Notes and the
Guarantees (together, the Designated Securities which are the subject of this
Pricing Agreement). Each reference to the Representatives herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Securities pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
-1-
DC_LAN01\52911.8
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company and the
Guarantor agree to issue and the Company agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the time and place and at the purchase price to
the Underwriters set forth in Schedule II hereto, the principal amount of
Designated Securities set forth opposite the name of such Underwriter in
Schedule I hereto.
-2-
DC_LAN01\52911.8
If the foregoing is in accordance with your understanding, please sign
and return to us ten counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement among each of the Underwriters,
the Company and the Guarantor. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company and the Guarantor for examination upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.
Very truly yours,
MacSaver Financial Services, Inc.
By:
Name:
Title:
Heilig-Meyers Company
By:
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
A.G. Edwards & Sons, Inc.
NationsBanc Capital Markets, Inc.
Salomon Brothers Inc
Wheat, First Securities, Inc.
By: Goldman, Sachs & Co.
By:
(Authorized Officer and Attorney-in-fact)
On behalf of each of the Underwriters
-3-
DC_LAN01\52911.8
SCHEDULE I
Principal
Amount of
Designated
Securities
to be
Underwriter Purchased
[Names of Representatives] $
[Names of other Underwriters]
Total $
-4-
DC_LAN01\52911.8
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due ,
Aggregate principal amount:
[$]
Price to Public:
% of the principal amount of the Designated Securities, plus accrued
interest[, if any,] from to [and accrued
amortization[, if any,] from to
]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued
interest from
to [and accrued amortization[, if any,] from to
]
Form of Designated Securities:
[Definitive form to be made available for checking and packaging at
least twenty-four hours prior to the Time of Delivery at the office of
[The Depository Trust Company or its designated custodian] [the
Representatives]]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
Specified funds for payment of purchase price:
Federal (same-day) funds
Time of Delivery:
a.m. (New York City time), , 19
Indenture:
Indenture dated , 19 , among the Company,
the Guarantor and , as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates, commencing ....................., 19..]
-5-
DC_LAN01\52911.8
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of [$ ] or an integral multiple thereof,
[on or after , at the following redemption prices (expressed
in percentages of principal amount). If [redeemed on or
before , %, and if] redeemed during the 12-month period
beginning ,
Redemption
Year Price
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at the election
of the Company, at a redemption price equal to the principal amount
thereof, plus accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption
upon occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking
fund to retire [$ ] principal amount of Designated Securities
on in each of the years through
at 100% of their principal amount plus accrued interest[,
together with [cumulative] [noncumulative] redemptions at the option of
the Company to retire an additional [$ ] principal amount of Designated
Securities in the years through at 100% of their principal amount plus
accrued interest.]
[If Designated Securities are extendable debt securities, insert--
Extendable provisions:
Designated Securities are repayable on , [insert date and years], at
the option of the holder, at their principal amount with accrued
interest. The initial annual interest rate will be %, and thereafter
the annual interest rate will be adjusted on
, and to a rate not less than % of the effective annual
interest rate on U.S. Treasury obligations with -year maturities as of
the [insert date 15 days prior to maturity date] prior to such [insert
maturity date].]
[If Designated Securities are floating rate debt securities, insert--
-6-
DC_LAN01\52911.8
Floating rate provisions:
Initial annual interest rate will be % through [and
thereafter will be adjusted [monthly] [on
each , , and ] [to an annual rate of
% above the average rate for -year
[month][securities][certificates of deposit] issued by
and [insert names of banks].] [and the annual interest rate
[thereafter] [from
through ] will be the interest yield equivalent of the weekly
average per annum market discount rate for -month Treasury bills plus %
of Interest Differential (the excess, if any, of (i) the then current
weekly average per annum secondary market yield for -month certificates
of deposit over (ii) the then current interest yield equivalent of the
weekly average per annum market discount rate for
-month Treasury bills); [from and thereafter the rate will be
the then current interest yield equivalent plus % of Interest
Differential].]
Defeasance provisions:
Closing location for delivery of Designated Securities:
Additional Closing Conditions:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms:]
-7-
DC_LAN01\52911.8
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Guarantor and its subsidiaries (including the Company)
within the meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial information
examined) by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, and the related published rules
and regulations thereunder; and, if applicable, they have made a review
in accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Guarantor and the Company for the
periods specified in such letter, as indicated in their reports
thereon, copies of which have been separately furnished to the
representative or representatives of the Underwriters (the
"Representatives") such term to include an Underwriter or Underwriters
who act without any firm being designated as its or their
representatives;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Guarantor's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which have been separately
furnished to the Representatives; and on the basis of specified
procedures including inquiries of officials of the Guarantor and the
Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to form
in all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Guarantor and the Company for the five most recent fiscal years
included in the Prospectus and included or incorporated by reference in
Item 6 of the Guarantor's Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after
-1-
DC_LAN01\52911.8
restatement where applicable) in the audited consolidated financial
statements for five such fiscal years which were included or
incorporated by reference in the Guarantor's Annual Reports on Form
10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of Items 301, 302,
402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Guarantor, the Company and their
subsidiaries, inspection of the minute books of the Guarantor, the
Company and their subsidiaries since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Guarantor, the Company and
their subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in the
Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Guarantor's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data
-2-
DC_LAN01\52911.8
and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis
substantially consistent with the basis for the audited
financial statements included or incorporated by reference in
the Guarantor's Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Guarantor,
the Company and their subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records
of the Guarantor, the Company and their subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference), or in
Part II of, or in exhibits and schedules to, the Registration
-3-
DC_LAN01\52911.8
Statement specified by the Representatives or in documents incorporated
by reference in the Prospectus specified by the Representatives, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Guarantor, the Company
and their subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Securities for purposes of the letter delivered at the Time of Delivery for such
Designated Securities.
-4-