<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 20, 2000
REGISTRATION NO. 333-93463,
333-93463-01, 333-93463-02
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C>
THE COASTAL CORPORATION DELAWARE 74-1734212
COASTAL FINANCE II DELAWARE APPLIED FOR
COASTAL FINANCE III DELAWARE 76-0578326
(Exact name of each registrant (State of incorporation or organization (I.R.S. Employer Identification Numbers)
as specified in its charter) of each registrant)
</TABLE>
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COASTAL TOWER AUSTIN M. O'TOOLE, ESQ.
NINE GREENWAY PLAZA SENIOR VICE PRESIDENT AND SECRETARY
HOUSTON, TEXAS 77046-0995 COASTAL TOWER
(713) 877-1400 NINE GREENWAY PLAZA
(Address, including zip code and HOUSTON, TEXAS 77046-0995
telephone number, including area code, (713) 877-1400
of each registrants principal (Name, address, including zip code,
executive office) and telephone number, including
area code, of agent for service)
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COPIES TO:
GERALD S. TANENBAUM, ESQ.
CAHILL GORDON & REINDEL
EIGHTY PINE STREET
NEW YORK, NY 10005
(212) 701-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED (1) (2) OFFERING PRICE PER AGGREGATE OFFERING PRICE REGISTRATION FEE
SECURITY (3) (2) (3) (4)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
THE COASTAL CORPORATION
Common stock, par value
$.33-1/3 per share (1)
Preferred stock, par value
$.33-1/3 per share
Common stock warrants
Debt securities
Stock purchase contracts (5)
Stock purchase units (5)
Guarantee of trust preferred
securities of Coastal
Finance II (6) (7) $1,000,000,000 100% $1,000,000,000 $264,000(8)
Guarantee of trust preferred
securities of Coastal
Finance III (6) (7)
- -------------------------------------
COASTAL FINANCE II
Trust Preferred Securities
- -------------------------------------
COASTAL FINANCE III
Trust Preferred Securities
================================================================================================================================
</TABLE>
(1) An indeterminate number of shares of common stock are being registered,
including (a) shares of common stock into which certain series of debt
securities and preferred stock may be converted and for which no separate
consideration will be received and for which common stock warrants may be
exercised and (b) shares of common stock issuable upon settlement of the
stock purchase contracts being issued hereunder.
(2) In U.S. dollars or the equivalent thereof in foreign currency or currency
units.
(3) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.
(4) Exclusive of accrued interest or dividends, if any.
(5) Contracts to purchase shares of common stock of The Coastal Corporation may
be offered as parts of units that also include the trust preferred
securities being registered hereunder or debt obligations of third parties,
including U.S. treasury securities, purchased with the proceeds of the sale
of such units and pledged to secure the obligations of holders to purchase
such shares of common stock.
(6) No separate consideration will be received for guarantee by The Coastal
Corporation.
(7) This registration statement is deemed to include the obligations of The
Coastal Corporation under guarantee by The Coastal Corporation and certain
back-up undertakings as described herein.
(8) An aggregate of $80,000,000 of debt securities, preferred stock, common
stock, common stock warrants, subordinated deferrable interest debentures,
stock purchase contracts, and stock purchase units of The Coastal
Corporation, Coastal Finance II preferred securities and Coastal Finance
III preferred securities are being carried forward from Registration
Statement Nos. 333-81095, 333-81095-01 and 333-81095-02. In connection
with Registration Statement No. 333-81095, registration fees of $278,000
were previously paid.
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PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT CONTAINS A COMBINED PROSPECTUS THAT ALSO RELATES TO
$80,000,000 OF OTHER SECURITIES REGISTERED ON FORM S-3, FILE NO. 333-81095,
WHICH WAS DECLARED EFFECTIVE ON JULY 2, 1999 (THE "PREVIOUSLY REGISTERED
SECURITIES"), WHICH HAVE NOT BEEN OFFERED OR SOLD AS OF THE DATE OF THE FILING
OF THIS REGISTRATION STATEMENT. THIS REGISTRATION STATEMENT CONSTITUTES
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT 333-81095, PURSUANT TO
WHICH THE TOTAL AMOUNT OF UNSOLD PREVIOUSLY REGISTERED SECURITIES REGISTERED ON
REGISTRATION STATEMENT FILE NOS. 333-81095, 333-81095-01 and 333-81095-02,
WITHOUT LIMITATION AS TO CLASS OF SECURITIES, MAY BE OFFERED AND SOLD AS DEBT
SECURITIES, PREFERRED STOCK, COMMON STOCK, COMMON STOCK WARRANTS, SUBORDINATED
DEFERRABLE INTEREST DEBENTURES, STOCK PURCHASE CONTRACTS, STOCK PURCHASE UNITS,
COASTAL FINANCE II PREFERRED SECURITIES AND COASTAL FINANCE III PREFERRED
SECURITIES. IN THE EVENT THE PREVIOUSLY REGISTERED SECURITIES ARE OFFERED AND
SOLD PRIOR TO THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, THE AMOUNT OF
PREVIOUSLY REGISTERED SECURITIES SO SOLD WILL NOT BE INCLUDED IN THE PROSPECTUS
HEREUNDER.
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<PAGE> 3
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO
BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED.
PROSPECTUS
- ---------------------
SUBJECT TO COMPLETION, DECEMBER 22, 1999
$1,080,000,000
THE COASTAL CORPORATION
COASTAL FINANCE II
COASTAL FINANCE III
COASTAL TOWER
NINE GREENWAY PLAZA
HOUSTON, TEXAS 77046-0995
(713) 877-1400
- --------------------------------------------------------------------------------
The following are types of securities that we may offer and sell under this
prospectus:
<TABLE>
<S> <C>
- - Debt securities - Common stock warrants
- - Preferred stock - Subordinated deferrable interest
- - Common stock debentures
- Stock purchase contracts
- Stock purchase units
</TABLE>
In addition, we, in conjunction with our trusts, may offer and sell:
- Trust preferred securities and related guarantees
We may offer these securities separately or as units which may include
other securities. We will describe in a prospectus supplement, which must
accompany this prospectus, the securities we are offering and selling, as well
as the specific terms of the securities. Those terms may include:
<TABLE>
<S> <C>
- - Maturity - Redemption terms
- - Interest rate - Listing on a securities exchange
- - Sinking fund terms - Amount payable at maturity
- - Currency of payments - Ranking
</TABLE>
- --------------------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
We may offer the securities in amounts, at prices and on terms determined
at the time of offering. We may sell the securities directly to you, through
agents we select, or through underwriters and dealers we select. If we use
agents, underwriters or dealers to sell the securities, we will name them and
describe their compensation in a prospectus supplement.
, 1999
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<S> <C>
Where You Can Find More Information......................... 1
Incorporation of Certain Documents by Reference............. 2
The Coastal Corporation..................................... 3
The Trusts.................................................. 3
Use of Proceeds............................................. 4
Accounting Treatment Relating to Trust Securities........... 4
Ratio of Earnings to Fixed Charges or Earnings to Combined
Fixed Charges and Preferred Stock Dividends............... 4
Description of Equity Securities............................ 5
Description of Common Stock Warrants........................ 12
Description of Trust Preferred Securities................... 14
Description of Trust Preferred Securities Guarantees........ 15
Description of Debt Securities.............................. 18
Description of Subordinated Deferrable Interest
Debentures................................................ 30
Description of Stock Purchase Contracts And Stock Purchase
Units..................................................... 36
Plan of Distribution........................................ 36
Legal Matters............................................... 38
Experts..................................................... 38
</TABLE>
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WHERE YOU CAN FIND MORE INFORMATION
The Coastal Corporation files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended. You may read and copy
this information at the following locations of the Commission:
<TABLE>
<S> <C> <C>
Judiciary Plaza, Room Seven World Trade Center Citicorp Center
10024 Suite 1300 500 West Madison Street
450 Fifth Street, N.W. New York, New York 10048 Suite 1400
Washington, D.C. 20549 Chicago, Illinois 60661
</TABLE>
You can also obtain copies of this information by mail from the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Room 10024, Washington
D.C. 20549, at prescribed rates. You may obtain information on the operation of
the Public Reference Room by calling the Commission at (800) SEC-0330.
The Commission also maintains an internet world wide web site that contains
reports, proxy statements and other information about issuers, like Coastal, who
file electronically with the Commission. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
us at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005.
We and our trusts have filed jointly with the Commission a registration
statement on Form S-3 that registers the securities we or they are offering. The
registration statement, including the attached exhibits and schedules, contains
additional relevant information about Coastal, the trusts and the securities
offered. The rules and regulations of the Commission allow us to omit certain
information included in the registration statement from this prospectus.
<PAGE> 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" information into
this prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the Commission. The
information incorporated by reference is considered to be part of this
prospectus, except for any information that is superseded by information that is
included directly in this document.
This prospectus includes by reference the documents listed below that we
have previously filed with the Commission and that are not included in or
delivered with this document. They contain important information about us and
our financial condition.
<TABLE>
<CAPTION>
FILING PERIOD
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<S> <C>
Annual Report on Form 10-K......... Year ended December 31, 1998
Quarterly Report on Form 10-Q...... Quarter ended March 31, 1999
Quarter ended June 30, 1999
Quarter ended September 30, 1999
</TABLE>
We incorporate by reference additional documents that we may file with the
Commission between the date of this prospectus and the date of the closing of
this offering. These documents include periodic reports, such as Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
You can obtain any of the documents incorporated by reference in this
document from us without charge, excluding any exhibits to those documents
unless the exhibit is specifically incorporated by reference as an exhibit to
this prospectus. You can obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from us at the
following address:
Austin M. O'Toole, Esq.
Secretary
The Coastal Corporation
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
We have not authorized anyone to give any information or make any
representation about us that is different from, or in addition to, that
contained in this prospectus or in any of the materials that we have
incorporated by reference into this document. Therefore, if anyone does give you
information of this sort, you should not rely on it. If you are in a
jurisdiction where offers to exchange or sell, or solicitations of offers to
exchange or purchase, the securities offered by this document or the
solicitation of proxies is unlawful, or if you are a person to whom it is
unlawful to direct these types of activities, then the offer presented in this
document does not extend to you. The information contained in this document
speaks only as of the date of this document, unless the information specifically
indicates that another date applies.
2
<PAGE> 6
THE COASTAL CORPORATION
We, acting through our subsidiaries, are a diversified energy holding
company with subsidiary operations in:
- natural gas gathering, marketing, processing, storage and transmission;
- petroleum refining, marketing and distribution and chemicals;
- gas and oil exploration and production;
- coal mining; and
- power.
Coastal was incorporated under the laws of Delaware in 1972 to become the
successor parent, through a corporate restructuring, of a corporate enterprise
founded in 1955. Our principal office is located at Coastal Tower, Nine Greenway
Plaza, Houston, Texas 77046-0995; our telephone number is 713-877-1400. In this
prospectus, unless otherwise indicated, "we" and "Coastal" refer to The Coastal
Corporation and its consolidated subsidiaries.
You can obtain additional information about us in the reports and other
documents incorporated by reference in this prospectus. See "Where You Can Find
More Information" and "Incorporation of Certain Documents by Reference."
THE TRUSTS
We created two Delaware business trusts pursuant to two declarations of
trust executed by us as sponsor for each trust, appointed trustees for each
trust and filed a certificate of trust for each trust with the Delaware
Secretary of State. The trusts are named Coastal Finance II and Coastal Finance
III, which we refer to herein as, collectively, the "trusts" and, individually,
each a "trust." The amended and restated declaration of trust for each trust,
(as so amended and restated, the "declaration") which is filed as an exhibit to
the registration statement of which this prospectus forms a part, states the
terms and conditions for each trust to issue and sell its trust preferred
securities and trust common securities, which we refer to herein, together with
the trust preferred securities, as the trust securities.
Each trust will exist solely to:
- issue and sell its trust securities;
- use the proceeds from the sale of its trust securities to purchase and
hold a series of our subordinated debt securities;
- maintain its status as a grantor trust for federal income tax purposes;
and
- engage in other activities that are necessary or incidental to these
purposes.
We will purchase all of the trust common securities of each trust. The
trust common securities will represent an aggregate liquidation amount equal to
at least 3% of each trust's total capitalization. The trust common securities
will have terms substantially identical to, and will rank equal in priority of
payment with, the trust preferred securities. However, if we default on the
subordinated debt securities, then cash distributions and liquidation,
redemption and other amounts payable on the trust common securities will be
subordinate to the trust preferred securities in priority of payment.
We will guarantee the trust preferred securities as described later in this
prospectus.
The trustees will conduct each trust's business and affairs. Only we, as
owner of the trust common securities, will have the right to appoint, remove or
replace the trustees. In addition, we can increase or decrease the number of
trustees. A majority of the trustees, which we refer to herein as the regular
trustees of each trust, will be persons who are our employees or officers or
affiliated with us. One trustee of
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<PAGE> 7
each trust will be a financial institution which will be unaffiliated with us
and which will act as property trustee and as indenture trustee for purposes of
the Trust Indenture Act of 1939, as amended.
The property trustee will hold title to the subordinated debt securities
for the benefit of the holders of the trust securities, and will have the power
to exercise all rights, powers and privileges as the holder of the subordinated
debt securities under the indenture pursuant to which the subordinated debt
securities are issued. In addition, the property trustee will maintain exclusive
control of a segregated non-interest bearing bank account to hold all payments
made in respect of the subordinated debt securities for the benefit of the
holders of the trust securities. The property trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the trust securities out of funds from the property account. The
guarantee trustee will hold the guarantee by us of the trust securities for the
benefit of the holders of the trust preferred securities.
In addition, unless the property trustee maintains a principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law, another trustee of each trust, the Delaware trustee, will either
be a natural person who is a resident of the State of Delaware or an entity
which has its principal place of business or resides in the State of Delaware.
We have appointed The Bank of New York (Delaware), 400 White Clay Center, Route
273, Newark, Delaware 19711, as Delaware trustee. We will pay all fees and
expenses related to each trust and each offering of the related trust preferred
securities and will pay all ongoing costs and expenses of each trust, except
such trust's obligations under the related trust securities.
The rights of the holders of the trust preferred securities, including
economic rights, rights to information and voting rights, are set forth in each
trust's declaration and the Delaware Business Trust Act. The principal place of
business of the trusts is c/o The Coastal Corporation, Coastal Tower, Nine
Greenway Plaza, Houston, Texas 77046-0995, and their telephone number is
713-877-1400.
USE OF PROCEEDS
Except as may otherwise be described in the prospectus supplement relating
to an offering of securities, the net proceeds from the sale of the securities
will be used to repay our short-term borrowings and for repayment of borrowings
under various credit agreements, including short-term borrowings and credit
agreements of our subsidiaries, and for other general corporate purposes. Prior
to such uses, the net proceeds from the sale of securities will be invested in
certificates of deposit or other highly liquid investments with short-term
maturities. Any specific allocation of the net proceeds of an offering of
securities to a specific purpose will be determined at the time of such offering
and will be described in the related prospectus supplement.
ACCOUNTING TREATMENT RELATING TO TRUST SECURITIES
The financial statements of each trust that has issued trust securities
will be consolidated with our financial statements, with the trust preferred
securities of each trust shown on our consolidated financial statements as our
obligated mandatory redemption preferred securities of a consolidated trust. Our
financial statements will include a footnote that discloses, among other things,
that the sole asset of each trust included therein consists of our subordinated
deferrable interest debentures and will specify the designation, principal
amount, interest rate and maturity date of such subordinated deferrable interest
debentures.
RATIO OF EARNINGS TO FIXED CHARGES OR EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
A description of our ratio of earnings to fixed charges or earnings to
combined fixed charges and preferred stock dividends, as applicable on a
consolidated basis, will appear in an applicable prospectus supplement.
4
<PAGE> 8
DESCRIPTION OF EQUITY SECURITIES
GENERAL
Our restated certificate of incorporation provides that the aggregate
number of shares of all classes of stock that we have authority to issue is
552,700,000 shares, consisting of 500,000,000 shares of common stock, 50,000,000
shares of preferred stock and 2,700,000 shares of class A common stock, par
value 33 1/3c per share.
As of September 30, 1999, our issued and outstanding common stock, class A
common stock and preferred stock was as follows:
<TABLE>
<CAPTION>
SHARES
---------
<S> <C>
Common Stock................................................ 213,246,839
Class A Common Stock........................................ 347,236
Preferred Stock:
$1.19 Cumulative Convertible Preferred Stock, Series A
("series A preferred stock")........................... 53,565
$1.83 Cumulative Convertible Preferred Stock, Series B
("series B preferred stock")........................... 59,922
$5.00 Cumulative Convertible Preferred Stock, Series C
("series C preferred stock")........................... 26,684
</TABLE>
All issued and outstanding shares are fully paid and non-assessable.
PREFERRED STOCK
GENERAL
Shares of preferred stock may be issued from time to time, in one or more
series, as authorized by our board of directors, with any terms, preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends or other distributions, qualifications and terms or conditions of
redemption as are determined by our board of directors and permitted by Delaware
law. At such time as our board of directors determines the terms of the
preferred stock, such terms will be set forth in a certificate of designation to
be filed with the Secretary of State of Delaware. Upon filing, the certificate
of designation will constitute an amendment to the certificate of incorporation
pursuant to the Delaware General Corporation Law.
The following description of our preferred stock is not complete. You
should look at our certificate of incorporation and by-laws for a complete
description.
TERMS
The terms of each series of preferred stock will be described in any
prospectus supplement related to such series of preferred stock and may include
the following:
(1) the title and stated value of such preferred stock;
(2) the number of shares of such preferred stock offered and the
offering price and liquidation preference per share of such preferred
stock;
(3) the dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such preferred stock;
(4) the date from which dividends on such preferred stock shall
accumulate, if applicable;
(5) the provision for a sinking fund, if any, for such preferred
stock;
(6) the provision for redemption, if applicable, of such preferred
stock;
5
<PAGE> 9
(7) any listing of such preferred stock on any securities exchange;
(8) a discussion of federal tax considerations applicable to such
preferred stock;
(9) any voting rights of holders of such preferred stock;
(10) any other specific terms, preferences, rights, limitations or
restrictions of such preferred stock;
(11) the relative ranking and preference of such preferred stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
our affairs;
(12) any limitations on issuance of any series of preferred stock
ranking senior to or on a parity with such series of preferred stock as to
dividend rights and rights upon liquidation, dissolution or winding up of
our affairs; and
(13) the terms and conditions, if applicable, upon which such
preferred stock will be convertible into or participate in dividends, if
any, paid on the common stock, including the conversion price (or manner of
calculation thereof).
DIVIDENDS
The holders of the preferred stock of each series shall be entitled to
receive, when, as and if declared by our board of directors, out of our funds
legally available therefor, cash dividends at the annual rate and on such dates
as shall be set forth in the prospectus supplement relating to such series. Each
such dividend shall be paid to the holders of record of shares of such series on
such record date as shall be fixed by our board of directors.
If dividends are not paid in full or declared in full and a sum set apart
for the payment thereof upon the preferred stock of a series and any other
preferred stock ranking on a parity as to dividends with the preferred stock of
such series, all dividends declared upon shares of preferred stock of such
series and any other preferred stock ranking on a parity as to dividends shall
be declared pro rata. Such pro rata payments will be made so that in all cases,
the amount of dividends declared per share on the preferred stock of such series
and any other preferred stock ranking on a parity as to dividends shall be in
the same proportion as the amount of dividends that would be paid on all shares
of preferred stock of such series and such other parity preferred stock if all
such dividends (including dividends accrued or in arrears) were paid in full.
Except as provided in the preceding sentence, unless full cumulative
dividends on the preferred stock of a series have been paid or declared in full
and a sum set aside for the payment thereof:
- no dividends shall be declared or paid or set aside for payment or other
distribution made upon our common stock, class A common stock or any
other class or series of our capital stock ranking junior to or on a
parity with the preferred stock of the applicable series as to dividends
or liquidation rights; and
- no common stock, class A common stock or any other class or series of our
capital stock ranking junior to or on a parity with the preferred stock
of such series as to dividends or liquidation rights shall be redeemed,
purchased or otherwise acquired for any consideration (or any payment
made to or available for a sinking fund for the redemption of any shares
of such stock) by us or any of our subsidiaries (except by conversion
into or exchange for our stock ranking junior to the preferred stock of
the applicable series as to dividends and liquidation rights).
Unless otherwise stated in the applicable prospectus supplement, no
interest, or sum of money in lieu of interest, will be payable in respect of any
dividend payment or payments on preferred stock of any series which may be in
arrears.
6
<PAGE> 10
Dividends payable on the preferred stock of a series for any period less
than a full quarterly dividend period shall be computed on the basis of a
360-day year of twelve 30-day months and the actual number of days elapsed in
the period for which payable.
VOTING RIGHTS
The holders of the preferred stock shall not, except as required by law or
as set forth in the applicable prospectus supplement, have any right or power to
vote on any question or in any proceeding or to be represented at, or to receive
notice of, any meeting of stockholders. On any matters on which the holders of
the preferred stock shall be entitled to vote, they shall be entitled to one
vote for each share held.
Unless otherwise stated in the applicable prospectus supplement, if six or
more full quarterly dividends (whether consecutive or not) on any series of
preferred stock shall be in arrears, then during the period, which we refer to
herein as the "voting period," the holders of a majority of the outstanding
shares of preferred stock of all series represented in person or by proxy at any
meeting of our stockholders held for the election of directors during such
voting period, shall be entitled, as a class, to the exclusion of the holders of
all other classes of our stock, to elect two of our directors, each share of
preferred stock entitling the holder thereof to one vote.
Any director who shall have been elected by holders of preferred stock, or
by any director so elected as herein contemplated, may be removed at any time
during a voting period, either for or without cause, by, and only by, the
affirmative votes of the holders of record of a majority of the outstanding
shares of preferred stock of all series given at a special meeting of such
stockholders called for the purpose. Any vacancy thereby created may be filled
during such voting period by the holders of preferred stock of all series,
present in person or represented by proxy at such meeting. Any director elected
by holders of preferred stock, or by any director so elected as herein
contemplated, who dies, resigns or otherwise ceases to be a director shall,
except as otherwise provided in the preceding sentence, be replaced by the
remaining director theretofore elected by the holders of preferred stock. At the
end of the voting period, the holders of preferred stock of all series shall be
automatically divested of all voting power vested in them under this provision
but subject always to the subsequent vesting of voting power in the holders of
preferred stock in the event of any similar cumulated arrearage in payment of
quarterly dividends occurring thereafter. The term of all directors elected
pursuant to this provision shall in all events expire at the end of the voting
period.
The approval of the holders of at least two-thirds of the then-outstanding
shares of preferred stock of a series will be required to:
- amend the applicable certificate of designation to adversely change the
preferences, special rights or powers of the preferred stock of such
series; or
- to authorize, create or increase the authorized amount of any class or
series of our capital stock ranking prior to the preferred stock of such
series either as to dividend or liquidation rights;
provided, however, that the creation or issuance of any class or series of our
capital stock not ranking prior to the preferred stock of a series as to
dividend or liquidation rights shall not require the consent of the holders of
the preferred stock of such series.
RANKING
The preferred stock to which any prospectus supplement may relate will rank
pari passu with the outstanding shares of our series A preferred stock, series B
preferred stock and series C preferred stock with respect to dividend rights and
liquidation preference. The preferred stock will rank prior to our common stock
and class A common stock. Without the requisite vote of holders of the preferred
stock, as described above under "Voting Rights," no class or series of capital
stock can be created ranking senior to the preferred stock as to dividend rights
or liquidation preference.
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LIQUIDATION RIGHTS
In the event of our liquidation, dissolution or winding up, the holders of
shares of our preferred stock of each series are entitled to receive out of our
assets available for distribution to stockholders, before any distribution of
assets is made to holders of common stock, class A common stock or any other
class or series of our capital stock (including any preferred stock) which is
junior as to liquidation rights to our preferred stock of such series,
liquidating distributions in the amount set forth in the applicable prospectus
supplement, plus dividends accrued and accumulated but unpaid to the date of
such distribution. If, upon our liquidation, dissolution or winding up, the
amounts payable with respect to our preferred stock of such series and any of
our other preferred stock ranking as to any such distribution on a parity with
our preferred stock of such series are not paid in full, the holders of our
preferred stock of such series and of such of our other preferred stock will
share ratably in any such distribution of assets in proportion to the full
respective preferential amounts to which they are entitled. After payment of the
full amount of the liquidating distribution to which they are entitled, the
holders of shares of our preferred stock will not be entitled to any further
participation in any distribution of assets by us. Neither our consolidation or
merger with another corporation nor a sale or transfer of all or part of our
assets for cash or securities shall be considered a liquidation, dissolution or
winding up of us.
REDEMPTION PROVISIONS
The preferred stock of each series will have such optional or mandatory
redemption terms, if any, as shall be set forth in the applicable prospectus
supplement.
CONVERSION AND EXCHANGE RIGHTS
The terms and conditions, if any, upon which any series of our preferred
stock is convertible into common stock or exchangeable into debt securities will
be set forth in the applicable prospectus supplement relating to such series of
preferred stock. Such terms will include:
(1) in the case such series of preferred stock is convertible into
common stock:
(a) the number of shares of common stock into which shares of such
series of preferred stock are convertible;
(b) the conversion price (or manner of calculation thereof);
(c) the conversion period;
(d) provisions as to whether conversion will be at the option of
the holders of such series of preferred stock or at our option;
(e) the events requiring an adjustment of the conversion price; and
(f) provisions affecting conversion in the event of the redemption
of such series of preferred stock; and
(2) in the case such series of preferred stock is exchangeable into
debt securities;
(a) the principal amount of debt securities into which shares of
such series of preferred stock are exchangeable;
(b) the exchange period; and
(c) provisions as to whether the exchange will be at the option of
the holders of such series of preferred stock or at our option.
MISCELLANEOUS
Our preferred stock will have no preemptive rights. All of our preferred
stock, upon payment in full therefor, will be fully paid and nonassessable.
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COMMON STOCK AND CLASS A COMMON STOCK
DIVIDENDS
Subject to the preferential rights of the holders of preferred stock, all
issued and outstanding shares of common stock are entitled to participate
equally in dividends when, as and if declared by our board of directors out of
funds legally available for such purposes. Our directors may declare and pay
dividends upon the shares of our capital stock either out of surplus or, if
there is no surplus, out of net profits for the fiscal year in which the
dividend is declared and/or the preceding fiscal year, subject to the
restrictions contained in certain agreements.
Our board of directors may fix, in advance, a date as the record date for
purposes of determining stockholders entitled to receive dividends. Such date
may not be more than 60 days prior to the payment of such dividends. However, if
no record date is fixed by the board of directors, the record date will be at
the close of business on the day on which our board of directors adopts the
resolution relating to the dividend.
MEETINGS OF STOCKHOLDERS
A meeting of our stockholders for the election of directors and for the
transaction of any of our other business as may lawfully come before the meeting
is held annually at a date, time and place designated by our board of directors.
In addition, a special meeting of our stockholders may be called by the
board of directors, the chairman of the board or the president at any time. The
certificate of incorporation provides that any action required or permitted to
be taken at a meeting of stockholders may be taken only at a meeting of
stockholders.
VOTING RIGHTS
A majority of the voting power of all our outstanding shares entitled to
vote at a meeting of stockholders constitutes a quorum. Except as otherwise
provided by law or by our certificate of incorporation or by-laws, a resolution
can be adopted at a meeting provided a quorum is present.
The holders of common stock are entitled to one vote per share on all
matters upon which stockholders generally have the right to vote, while holders
of class A common stock are entitled to 100 votes per share on all matters on
which such holders have the right to vote. All shares presently outstanding are
fully paid and non-assessable.
The shares of common stock do not have cumulative voting rights. At every
meeting of the stockholders called for the election of directors, the holders of
common stock, voting as a class with the holders of series A preferred stock,
series B preferred stock, series C preferred stock and any other series of
preferred stock generally entitled to vote therefor, shall be entitled to elect
one-quarter of the number of directors to be elected at such meeting, and if
one-quarter of such number of directors is not a whole number, then the holders
of common stock, voting as a class with the holders of voting preferred stock,
shall be entitled to elect the next higher whole number of directors to be
elected at such meeting, and the holders of class A common stock shall have no
voting rights with respect to the election of such directors. The holders of
class A common stock, common stock and voting preferred stock, voting as a
single class, shall be entitled to elect the remaining directors to be elected
at such meeting. If, during the interval between annual meetings of stockholders
for the election of directors, the number of directors who have been elected by
either the holders of common stock voting as a class with the holders of voting
preferred stock or by the holders of class A common stock, common stock and
voting preferred stock voting as a class shall, by reason of resignation, death,
retirement, disqualification or removal, be reduced, the vacancy or vacancies in
the directors so created may be filled by a majority vote of the remaining
directors then in office, even if less than a quorum, or by a sole remaining
director. Any director elected by the remaining directors then in office to fill
any vacancy in the directorships designated by the holders of common stock and
voting preferred stock may be removed from office by vote of the holders of a
majority of the shares of common stock voting as a class with the holders of
voting preferred stock, and any director elected by
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the remaining directors in office to fill any vacancy in the directorships
designated by the holders of class A common stock, common stock and voting
preferred stock may be removed from office by the holders of a majority of the
voting power of the class A common stock, common stock and voting preferred
voting as a class.
Notice of a stockholders' meeting, stating the place, date, time and the
purpose thereof, must be delivered either personally or by mail to each
stockholder at his address as it appears on our books unless otherwise provided
by law or our certificate of incorporation at least 10 days but not more than 50
days prior to the date set for the meeting. Stockholders may exercise their
voting rights through proxies as provided in our by-laws.
PROVISIONS RELATING TO CONTROL OF COASTAL
The class A common stock carries certain rights, and our certificate of
incorporation contains certain provisions, which affect the control of us, and
are described below.
(1) Class A Common Stock
Each share of class A common stock, which carries the right to cast
100 votes, may be converted into one share of common stock. The board of
directors may declare and pay dividends in respect of the class A common
stock provided that a greater dividend is, at the same time, declared and
paid in respect of the common stock.
(2) Board of Directors
(a) Our certificate of incorporation provides for a board of
directors consisting of a minimum of three and a maximum of eighteen
directors to be divided into three classes, with each of the three
classes required to be as nearly equal as possible, serving staggered
three-year terms. The effect of this provision is that, at each of our
annual meetings, approximately one-third of the board of directors is
elected to succeed those whose terms expire. The total number of
directors and the number of directors constituting each class may be
varied, from time to time, by the board of directors within the
authorized limits.
(b) Notwithstanding that the maximum number of directors is
established at eighteen, the rights of any holders of preferred stock or
any other class or series of stock, other than common stock, to elect a
specified number of directors are governed by the terms of our
certificate of incorporation applicable thereto, and such directors
shall not be classified as described above unless so provided.
(c) Our directors are also empowered to fill casual vacancies
occurring on our board. Any director so appointed by our board would
hold office for the unexpired portion of the term of the director whose
place he or she had taken. Where our board appoints a director to fill a
newly created directorship resulting from an increase in the number of
directors, that director would hold office until the next election of
the class for which he or she was chosen. If the size of our board was
increased, the additional director or directors would be apportioned
among the three classes to make all classes as nearly equal as possible.
(d) No person, except a person nominated by or on behalf of our
board, is eligible for election as a director at any annual or special
meeting of stockholders unless a written request that such person's name
be placed in nomination is received from a stockholder of record by our
Secretary not less than 30 days prior to the date fixed for the meeting,
together with the written consent of such person to serve as a director.
(3) Meetings of Stockholders
Stockholder action may be taken only at a stockholders' meeting. Our
stockholders do not have the power to call a special meeting and it may
therefore be more difficult for stockholders to take action opposed by our
board of directors. This may have the effect of deterring persons from
seeking
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to acquire substantial stock positions in or control of us, including an
attempt to acquire control of us made in response to any attempt by us to
acquire securities of, or control of, another corporation.
(4) Business Combinations
The approval of the holders of 85% of the voting power of our
outstanding shares of stock is required, in certain circumstances, for the
adoption or authorization of a business combination with any controlling
company. A controlling company is an entity which either owns, or is
controlled by any entity which owns, 20% of the voting power of the
outstanding shares of our stock. Delaware law provides that, unless the
certificate of incorporation specifies otherwise, the votes of the holders
of a majority of the outstanding voting stock are sufficient to approve a
business combination.
A proposed business combination will not have to meet the 85% vote
requirement where certain fair price and other procedural requirements are
satisfied. These requirements are designed to ensure that the cash or
market value of any other consideration to be received by our stockholders
in such business combination is fair, to preserve the rights of our public
stockholders by ensuring that appropriate representation on our board of
directors will be maintained, to keep public stockholders fully informed as
to the advisability of the proposed business combination and to ensure that
there is no major change in our business or capital structure and no
reduction in the rate of dividends payable on our stock without the
approval of the board of directors.
PRE-EMPTIVE RIGHTS
Neither stockholders nor any other person has any pre-emptive subscription
rights.
LIQUIDATION, DISSOLUTION AND REORGANIZATION
All shares of common stock and class A common stock rank equally upon our
liquidation or dissolution, after payment of all debts and expenses and
satisfaction of the interests of the holders of any shares of our preferred
stock then outstanding.
Our certificate of incorporation provides that if a majority in number
representing three-fourths in value of our creditors or class of creditors,
and/or of our stockholders or class of stockholders, as the case may be, agree
to any compromise or arrangement and to any reorganization of us at a meeting
properly called by a Delaware court, such action, if sanctioned by the court,
will be binding on all of our creditors or class of creditors, and/or on all of
our stockholders or class of stockholders, as the case may be, and also on us.
TRANSFERABILITY OF SHARES OF COMMON STOCK AND CLASS A COMMON STOCK
There are no restrictions in our certificate of incorporation or by-laws on
the transferability of shares of common stock. Shares of class A common stock
are not transferable and upon any attempted transfer or upon death of the holder
thereof are automatically converted into shares of common stock.
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DESCRIPTION OF COMMON STOCK WARRANTS
GENERAL
We may issue common stock warrants independently or together with any
securities offered by any prospectus supplement and such common stock warrants
may be attached to or separate from such securities. Each series of common stock
warrants will be issued under a separate warrant agreement to be entered into
between us and a bank or trust company, as warrant agent, all as set forth in
the applicable prospectus supplement. The warrant agent will act solely as our
agent in connection with the certificates representing the common stock warrants
and will not assume any obligation or relationship of agency or trust for or
with any holders of common stock warrant certificates or beneficial owners of
common stock warrants.
The following summaries of certain provisions of the warrant agreement and
common stock warrant certificate are not complete. You should look at the
warrant agreement relating to, and the common stock warrant certificate
representing, a series of common stock warrants.
TERMS
An applicable prospectus supplement will set forth and describe other
specific terms regarding each series of common stock warrants offered hereby,
including:
(1) the offering price;
(2) the number of shares of common stock purchasable upon exercise of
each such common stock warrant and the price at which such number of shares
of common stock may be purchased upon such exercise;
(3) the date on which the right to exercise such common stock warrants
shall commence and the date on which such right shall expire; and
(4) any other terms of such common stock warrants.
The applicable prospectus supplement may also state that any of the terms
set forth herein are inapplicable to such series. Common stock warrants for the
purchase of common stock will be offered and exercisable for U.S. dollars only
and will be in registered form only.
EXERCISE OF COMMON STOCK WARRANTS
Each common stock warrant will entitle the holder thereof to purchase such
shares of common stock at such exercise price as shall in each case be set forth
in, or calculable from, the prospectus supplement relating to the offered common
stock warrants. After the close of business on the expiration date of each
common stock warrant or such later date to which such expiration date may be
extended by us, unexercised common stock warrants will become void.
Common stock warrants may be exercised by delivering to the warrant agent
payment as provided in the applicable prospectus supplement of the amount
required to purchase the common stock purchasable upon such exercise, together
with certain information set forth on the reverse side of the common stock
warrant certificate. Upon receipt of such payment and the common stock warrant
certificate properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the applicable prospectus
supplement, we will, as soon as practicable, issue and deliver the common stock
purchasable upon such exercise. If fewer than all of the common stock warrants
represented by such common stock warrant certificate are exercised, a new common
stock warrant certificate will be issued for the remaining amount of common
stock warrants.
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AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENT
The warrant agreement for a series of common stock warrants may be amended
or supplemented without the consent of the holders of the common stock warrants
issued thereunder to effect changes that are not inconsistent with the
provisions of the common stock warrants and that do not adversely affect the
interests of the holders of the common stock warrants.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable prospectus supplement, the
exercise price of, and the number of shares of common stock covered by, a common
stock warrant are subject to adjustment in certain events, including:
(1) the issuance of common stock as a dividend or distribution on the
common stock;
(2) subdivisions and combinations of the common stock;
(3) the issuance to all holders of common stock of certain rights or
warrants entitling them to subscribe for or purchase common stock, at less
than the current market value, as defined in the warrant agreement for such
series of common stock warrants; and
(4) the distribution to all holders of common stock of evidences of
our indebtedness or assets, other than certain cash dividends and
distributions described below.
No adjustment in the exercise price of, and the number of shares of common
stock covered by, a common stock warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require a change of at
least one percent in the exercise price and exercise rate then in effect;
provided, however, that any such adjustment not so made will be carried forward
and taken into account in any subsequent adjustment; provided, further, that any
such adjustment not so made shall be made no later than three years after the
occurrence of the event requiring such adjustment to be made or carried forward.
Except as stated above, the exercise price of, and the number of shares of
common stock covered by, a common stock warrant will not be adjusted for the
issuance of common stock or any securities convertible into or exchangeable for
common stock, or securities carrying the right to purchase any of the foregoing.
In the case of:
(1) a reclassification or change of the common stock;
(2) a consolidation or merger involving us; or
(3) a sale or conveyance to another corporation of our property and
assets as an entirety or substantially as an entirety,
in each case as a result of which holders of our common stock shall be entitled
to receive stock, securities, other property or assets (including cash) with
respect to or in exchange for such common stock, the holders of the common stock
warrants then outstanding will be entitled thereafter to convert such common
stock warrants into the kind and amount of shares of stock and other securities
or property which they would have received upon such reclassification, change,
consolidation, merger, sale or conveyance had such common stock warrants been
exercised immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance.
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DESCRIPTION OF TRUST PREFERRED SECURITIES
Each trust may issue only one series of trust preferred securities having
terms described in the prospectus supplement relating thereto. The declaration
of each trust authorizes the regular trustees of such trust to cause such trust
to issue one series of trust preferred securities. Each declaration will be
qualified as an indenture under the Trust Indenture Act. The trust preferred
securities will have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights or
such restrictions as shall be set forth in each declaration or made part of each
declaration by the Trust Indenture Act and the Delaware Business Trust Act.
The prospectus supplement relating to the trust preferred securities of a
trust will include the specific terms of the series of trust preferred
securities being issued, including:
(1) the distinctive designation of such trust preferred securities;
(2) the number of trust preferred securities issued by such trust;
(3) the annual distribution rate, or method of determining such rate,
for trust preferred securities issued by such trust and the date or dates
upon which such distributions shall be payable; provided, however, that
distributions on such trust preferred securities shall be payable on a
quarterly basis to holders of trust preferred securities as of a record
date in each quarter during which such trust preferred securities are
outstanding;
(4) whether distributions on trust preferred securities issued by such
trust shall be cumulative, and, in the case of trust preferred securities
having such cumulative distribution rights, the date(s) or method of
determining the date(s) from which distributions on trust preferred
securities issued by such trust shall be cumulative;
(5) the amount(s) which shall be paid out of the assets of such trust
to purchase or redeem trust preferred securities issued by such trust and
the price(s) at which, the period(s) within which, and the terms and
conditions upon which, trust preferred securities issued by such trust
shall be purchased or redeemed, in whole or in part, pursuant to such
obligation;
(6) the voting rights, if any, of trust preferred securities issued by
such trust in addition to those required by law, including any requirement
for the approval by the holders of trust preferred securities, or of trust
preferred securities issued by one or more trusts, or of both, as a
condition to specified action or amendments to the declaration of such
trust; and
(7) any other relevant rights, preferences, privileges, limitations or
restrictions of trust preferred securities issued by such trust not
inconsistent with the declaration of such trust or with applicable law.
All trust preferred securities offered hereby will be guaranteed by Coastal
as described under "Description of Trust Preferred Securities Guarantees" below.
Any applicable United States federal income tax considerations applicable to any
offering of trust preferred securities will be described in the prospectus
supplement relating thereto.
In connection with the issuance of trust preferred securities, each trust
will issue one series of trust common securities. The declaration of each trust
authorizes the regular trustees of such trust to issue on behalf of such trust
one series of trust common securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as shall be set
forth therein. The terms of the trust common securities issued by a trust will
be substantially identical to the terms of the trust preferred securities issued
by such trust and the trust common securities will rank pari passu, and payments
will be made thereon pro rata, with the trust preferred securities except that,
upon an event of default under the declaration, the rights of the holders of the
trust common securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the trust preferred securities. All of the trust preferred securities
of a trust will be directly or indirectly owned by Coastal.
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DESCRIPTION OF TRUST PREFERRED SECURITIES GUARANTEES
GENERAL
The following is a summary of information concerning the guarantees of the
trust preferred securities, which we refer to as the trust preferred securities
guarantees. The trust preferred securities guarantees will be executed and
delivered by Coastal for the benefit of the holders from time to time of trust
preferred securities. Each trust preferred securities guarantee will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended. The
Bank of New York will act as indenture trustee under each trust preferred
securities guarantee and will be referred to herein as the guarantee trustee.
The terms of each trust preferred securities guarantee will be those set forth
in such trust preferred securities guarantee and the prospectus supplement
relating thereto and those made part of such trust preferred securities
guarantee by the Trust Indenture Act of 1939, as amended. Each trust preferred
securities guarantee will be held by the guarantee trustee for the benefit of
the holders of the trust preferred securities of the applicable trust.
The following summary does not purport to be complete and is subject in all
respects to the provisions of, and is qualified in its entirety by reference to,
the form of trust preferred securities guarantee, which is filed as an exhibit
to the registration statement of which this prospectus forms a part, the Trust
Indenture Act of 1939, as amended, and the prospectus supplement relating
thereto.
TERMS
We will irrevocably and unconditionally agree to pay in full the guarantee
payments described below, except to the extent paid by the trust, to the holders
of the trust preferred securities issued by a trust, as and when due, regardless
of any defense, right to set-off or counterclaim which such trust may have or
assert. The following payments are referred to herein as guarantee payments and,
with respect to trust preferred securities issued by a trust, to the extent not
paid by such trust, will be subject to the trust preferred securities guarantee
(without duplication):
(1) any accrued and unpaid distributions which are required to be paid
on such trust preferred securities, to the extent such trust shall have
funds available therefor;
(2) the redemption price, including all accrued and unpaid
distributions to the redemption date, to the extent such trust has funds
available therefor, with respect to any trust preferred securities called
for redemption by such trust; and
(3) upon a voluntary or involuntary termination, dissolution or
winding-up of such trust, other than in connection with the distribution of
subordinated deferrable interest debentures to the holders of trust
preferred securities in exchange for their trust preferred securities, the
lesser of:
(a) the aggregate of the liquidation amount and all accrued and
unpaid distributions on such trust preferred securities to the date of
payment, and
(b) the amount of assets of such trust remaining available for
distribution to holders of such trust preferred securities in
liquidation of such trust.
Our obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by us to the holders of trust preferred
securities or by causing the applicable trust to pay such amounts to such
holders.
Each trust preferred securities guarantee will be a full and unconditional
guarantee with respect to the trust preferred securities issued by the
applicable trust from the time of issuance of such trust preferred securities,
but will not apply to any payments or distributions when the trust does not have
sufficient funds available to make such payments or distributions. If we do not
make interest payments on the subordinated deferrable interest debentures
purchased by a trust, such trust will not pay distributions on the trust
preferred securities issued by such trust and will not have funds available
therefor. See "Description of Subordinated Deferrable Interest
Debentures -- Certain Covenants."
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We have also agreed separately to guarantee the obligations of the trusts
with respect to the trust common securities to the same extent as the trust
preferred securities guarantee, except that upon the occurrence and during the
continuation of an event of default under the declaration, holders of trust
preferred securities shall have priority over holders of trust common securities
with respect to distributions and payments on liquidation, redemption or
otherwise.
CERTAIN COVENANTS OF COASTAL
We will covenant that, so long as any trust preferred securities issued by
the applicable trust remain outstanding, if any event constituting an event of
default shall exist under such trust preferred securities guarantee or the
declaration of such trust, then we will not:
(a) declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of our capital stock;
(b) make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any of our debt securities which rank pari
passu with or junior to the subordinated deferrable interest debentures;
and
(c) make any guarantee payments, other than pursuant to the trust
preferred securities guarantees, with respect to the foregoing.
However, the foregoing restriction will not apply to any dividend,
redemption, liquidation, interest, principal or guarantee payment we make where
the payment is made by way of securities, including capital stock, that rank
junior to the securities on which such dividend, redemption, interest, principal
or guarantee payment is being made.
MODIFICATION OF THE TRUST PREFERRED SECURITIES GUARANTEES; BINDING NATURE OF
GUARANTEES
Except with respect to any changes which do not adversely affect the rights
of holders of trust preferred securities, in which case no vote will be
required, each trust preferred securities guarantee may be amended only with the
prior approval of the holders of not less than a majority in aggregate
liquidation amount of the outstanding trust preferred securities issued by the
applicable trust. The manner of obtaining any such approval of holders of such
trust preferred securities will be as set forth in an accompanying prospectus
supplement. All guarantees and agreements contained in a trust preferred
securities guarantee shall bind our successors, assigns, receivers, trustees and
representatives and shall inure to the benefit of the holders of the trust
preferred securities then outstanding of the applicable trust.
TERMINATION
Each trust preferred securities guarantee will terminate as to the trust
preferred securities issued by the applicable trust upon full payment of the
redemption price of all trust preferred securities of such trust, upon
distribution of the subordinated deferrable interest debentures held by such
trust to the holders of the trust preferred securities of such trust in
liquidation of such holders' interest in such trust preferred securities or upon
full payment of the amounts payable in accordance with the declaration of such
trust upon liquidation of such trust. Each trust preferred securities guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of trust preferred securities issued by the applicable trust
must restore payment of any sums paid under such trust preferred securities or
such trust preferred securities guarantee.
EVENTS OF DEFAULT
An event of default under a trust preferred securities guarantee will occur
upon our failure to perform any of our payment or other obligations thereunder.
The holders of a majority in liquidation amount of the trust preferred
securities relating to such trust preferred securities guarantee have the right
to direct the time, method and place of conducting any
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proceeding for any remedy available to the guarantee trustee in respect of such
trust preferred securities guarantee or to direct the exercise of any trust or
power conferred upon the guarantee trustee under such trust preferred securities
guarantee. If the guarantee trustee fails to enforce such trust preferred
securities guarantee, any holder of trust preferred securities relating to such
trust preferred securities guarantee may institute a legal proceeding directly
against us to enforce the guarantee trustee's rights under such trust preferred
securities guarantee, without first instituting a legal proceeding against the
relevant trust, the guarantee trustee or any other person or entity. In
addition, any record holder of trust preferred securities relating to such trust
preferred securities guarantee shall have the right, which is absolute and
unconditional, to proceed directly against us to obtain guarantee payments
thereunder, without first waiting to determine if the guarantee trustee has
enforced such trust preferred securities guarantee or instituting a legal
proceeding against the trust which issued such trust preferred securities, the
guarantee trustee or any other person or entity.
STATUS OF THE TRUST PREFERRED SECURITIES GUARANTEES
The trust preferred securities guarantees will constitute our unsecured
obligations and will rank:
(1) subordinate and junior in right of payment to all of our other
liabilities,
(2) pari passu with the most senior preferred or preference stock now
or hereafter issued by us and with any guarantee now or hereafter entered
into by us in respect of any preferred or preference stock of any of our
subsidiaries or affiliates, and
(3) senior to our common stock.
The terms of the trust preferred securities provide that each holder of
trust preferred securities issued by such trust by acceptance thereof agrees to
the subordination provisions and other terms of the trust preferred securities
guarantee relating thereto.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee, prior to the occurrence of a default with respect to
a trust preferred securities guarantee, undertakes to perform only such duties
as are specifically set forth in such trust preferred securities guarantee and,
after default, shall exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to such
provisions, the guarantee trustee is under no obligation to exercise any of the
powers vested in it by the trust preferred securities guarantee at the request
of any holder of trust preferred securities, unless offered reasonable indemnity
against the costs, expenses and liabilities which might be incurred thereby.
We and certain of our affiliates maintain deposit accounts and banking
relationships with the guarantee trustee. The guarantee trustee may serve as
trustee under other indentures pursuant to which our unsecured debt securities
may be issued.
GOVERNING LAW
The trust preferred securities guarantees will be governed by and construed
in accordance with the internal laws of the State of New York.
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DESCRIPTION OF DEBT SECURITIES
GENERAL
We may issue debt securities from time to time in one or more series, under
one or more indentures, each dated as of a date on or prior to the issuance of
the debt securities to which it relates. Senior debt securities and subordinated
debt securities may be issued pursuant to separate indentures, a senior
indenture and a subordinated indenture, respectively, in each case between us
and Harris Trust and Savings Bank, as trustee. The form of such indentures have
been filed as an exhibit to the registration statement of which this prospectus
is a part, subject to such amendments or supplements as may be adopted from time
to time. The senior indenture and the subordinated indenture, as amended or
supplemented from time to time, are sometimes referred to individually as an
"indenture" and collectively as the "indentures." Each indenture will be subject
to and governed by the Trust Indenture Act of 1939, as amended. The aggregate
principal amount of debt securities which may be issued under each indenture
will be unlimited and each indenture will set forth the specific terms of any
series of debt securities or provide that such terms shall be set forth in, or
determined pursuant to, an authorizing resolution, as defined in the applicable
prospectus supplement, and/or a supplemental indenture, if any, relating to such
series.
The statements made below relating to the debt securities and the
indentures are summaries of the anticipated provisions thereof, do not purport
to be complete and are subject to, and are qualified in their entirety by
reference to, all of the provisions of the applicable indenture and any
applicable U.S. federal income tax consideration as well as any applicable
modifications of or additions to the general terms described below in the
applicable prospectus supplement.
TERMS
The debt securities will be our unsecured obligations.
The senior debt securities will rank pari passu in right of payment with
all our other unsecured and unsubordinated indebtedness.
The subordinated debt securities will be subordinated in right of payment
to the prior payment in full of all our senior indebtedness, which is defined in
the section called "Ranking of debt securities" below.
The specific terms of each series of debt securities will be set forth in
the applicable prospectus supplement relating thereto, including the following,
as applicable:
(1) the title of such debt securities and whether such debt securities
are senior debt securities or subordinated debt securities;
(2) the aggregate principal amount of such debt securities and any
limit on such aggregate principal amount;
(3) the price (expressed as a percentage of the principal amount
thereof) at which such debt securities will be issued and, if other than
the principal amount thereof, the portion of the principal amount thereof
payable upon declaration of acceleration of the maturity thereof, or, if
applicable, the portion of the principal amount of such debt securities
that is convertible into common stock or the method by which any such
portion shall be determined;
(4) if convertible into common stock, the terms on which such debt
securities are convertible, including the initial conversion price, the
conversion period, any events requiring an adjustment of the applicable
conversion price and any requirements relating to the reservation of such
shares of common stock for purposes of conversion;
(5) the date(s), or the method for determining such date or dates, on
which the principal of such debt securities will be payable and, if
applicable, the terms on which such maturity may be extended;
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(6) the rate(s) (which may be fixed or floating), or the method by
which such rate or rates shall be determined, at which such debt securities
will bear interest, if any;
(7) the date(s), or the method for determining such date or dates,
from which any such interest will accrue, the dates on which any such
interest will be payable, the record dates for such interest payment dates,
or the method by which such dates shall be determined, the persons to whom
such interest shall be payable, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;
(8) the place(s) where the principal of and interest, if any, on such
debt securities will be payable, where such debt securities may be
surrendered for registration of transfer or exchange and where notices or
demands to or upon us in respect of such debt securities and the applicable
indenture may be served;
(9) the period(s), if any, within which, the price or prices at which
and the other terms and conditions upon which such debt securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed,
as a whole or in part, at our option;
(10) our obligation, if any, to redeem, repay or purchase such debt
securities pursuant to any sinking fund (as defined in the applicable
indenture) or analogous provision or at the option of a holder thereof, and
the period or periods within which, the price or prices at which and the
other terms and conditions upon which such debt securities will be
redeemed, repaid or purchased, as a whole or in part, pursuant to such
obligations;
(11) if other than U.S. dollars, the currency or currencies in which
the principal of and interest, if any, on such debt securities are
denominated and payable, which may be a foreign currency or units of two or
more foreign currencies or a composite currency or currencies, and the
terms and conditions relating thereto;
(12) whether the amount of payments of principal of or interest, if
any, on such debt securities may be determined with reference to an index,
formula or other method (which index, formula or method may, but need not
be, based on the yield on or trading price of other securities, including
United States Treasury securities, or on a currency, currencies, currency
unit or units, or composite currency or currencies) and the manner in which
such amounts shall be determined;
(13) whether the principal of or interest, if any, on the debt
securities of the series are to be payable, at our election or a holder
thereof, in a currency or currencies, currency unit or units or composite
currency or currencies other than that in which such debt securities are
denominated or stated to be payable and the period or periods within which,
and the terms and conditions upon which, such election may be made;
(14) provisions, if any, granting special rights to the holders of
debt securities of the series upon the occurrence of such events as may be
specified;
(15) any deletions from, modifications of or additions to the events
of default or our covenants with respect to debt securities of the series,
whether or not such events of default or covenants are consistent with the
events of default or covenants described herein;
(16) whether debt securities of the series are to be issuable
initially in temporary global form and whether any debt securities of the
series are to be issuable in permanent global form and, if so, whether
beneficial owners of interests in any such security in permanent global
form may exchange such interests for debt securities of such series and of
like tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
provided in the applicable indenture, and, if debt securities of the series
are to be issuable as a global security, the identity of the depository for
such series;
(17) the applicability, if any, of the defeasance and covenant
defeasance provisions of the applicable indenture to the debt securities of
the series; and
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(18) any other terms of the series (which terms shall not be
inconsistent with the provisions of the indenture under which the debt
securities are issued).
If the applicable prospectus supplement provides, the debt securities may
be issued at a discount below their principal amount and provide for less than
the entire principal amount thereof to be payable upon declaration of
acceleration of the maturity thereof. In such cases, all material U.S. federal
income tax considerations will be described in the applicable prospectus
supplement.
Except as may be set forth in the applicable prospectus supplement, the
debt securities will not contain any provisions that would limit our ability to
incur indebtedness or that would afford holders of debt securities protection in
the event of a highly leveraged transaction involving us or in the event of a
change of control. The applicable prospectus supplement will contain information
with respect to any deletions from, modifications of or additions to the events
of default or covenants described below, including any addition of a covenant or
other provision providing event risk or similar protection.
DENOMINATION, INTEREST, REGISTRATION AND TRANSFER
We will issue the debt securities of each series only in registered form,
without coupons, in denominations of $1,000, or in such other currencies or
denominations as may be set forth in the applicable indenture or specified in,
or pursuant to, an authorizing resolution and/or supplemental indenture, if any,
relating to such series of debt securities.
The principal of and interest, if any, on any series of debt securities
will be payable at the corporate trust office of the trustee, the address of
which will be stated in the applicable prospectus supplement. However, at our
option, interest payment may be made by check mailed to the address of the
person entitled thereto as it appears in the applicable register for such debt
securities.
Subject to certain limitations imposed upon debt securities issued in
book-entry form, the debt securities of any series:
- will be exchangeable for any authorized denomination of other debt
securities of the same series and of a like aggregate principal amount
and tenor upon surrender of such debt securities at the trustee's
corporate trust office or at the office of any registrar designated by us
for such purpose; and
- may be surrendered for registration of transfer or exchange thereof at
the corporate trust office of the trustee or at the office of any
registrar designated by us for such purpose.
No service charge will be made for any registration of transfer or
exchange, but we may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection with certain transfers and
exchanges. We may act as registrar and may change any registrar without notice.
CERTAIN COVENANTS
The applicable prospectus supplement will describe any material covenants
in respect of a series of debt securities that are not described in this
prospectus. Unless otherwise indicated in the applicable prospectus supplement,
senior debt securities will include the covenants described below.
Generally Used Definitions
The following are terms used in the covenants described below which have
specific meanings in the indenture relating to the particular series of debt
securities.
"attributable debt" will mean, with respect to any sale and leaseback
transaction as of any particular time, the present value, discounted at the rate
of interest implicit in the terms of the lease, of the obligations of the lessee
under such lease for net rental payments during the remaining term of the lease,
including any period for which such lease has been extended or may, at our
option, be extended.
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"consolidated net tangible assets" will mean our and our subsidiaries'
total assets appearing on a consolidated balance sheet, less, without
duplication:
(1) current liabilities;
(2) reserves for estimated rate refunds pending the outcome of a rate
proceeding to the extent such refunds have not been finally determined;
(3) all intangible assets; and
(4) deferred income tax assets.
"funded debt" will mean all:
(1) indebtedness maturing one year or more from the date of the
creation thereof, all indebtedness directly or indirectly renewable or
extendible, at the option of the debtor, by its terms or by the terms of
any instrument or agreement relating thereto, to a date one year or more
from the date of the creation thereof; and
(2) all indebtedness under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of one year
or more, even though such indebtedness may also conform to the definition
of short-term borrowing, as it may be defined in the applicable indenture.
"indebtedness" will mean:
(1) any liability of any person;
(a) for borrowed money;
(b) evidenced by a note, debenture or similar instrument (including
a purchase money obligation) given in connection with the acquisition of
any property or assets (other than inventory or similar property
acquired in the ordinary course of business), including securities; or
(c) for the payment of money relating to a capitalized lease
obligation;
(2) any guarantee by any person of any liability of others described
in the preceding clause (1); and
(3) any amendment, renewal, extension or refunding of any liability of
the types referred to in clauses (1) and (2) above.
"lien" will mean any mortgage, lien, pledge, charge or other security
interest or encumbrance of any kind.
"principal domestic property" will mean any property, plant, equipment or
facility of ours which is located in the United States or any territory or
political subdivision thereof, except any property which our board of directors
or management shall determine to be not material to the business or our and our
subsidiaries' operations, taken as a whole.
"sale and leaseback transaction" will mean a sale or transfer of any of our
principal domestic properties, with us taking back a lease of such principal
domestic property.
"significant subsidiary" will mean a subsidiary, including its
subsidiaries, which meets any of the following conditions:
(1) our and our subsidiaries' investments in and advances to the
subsidiary exceed 10 percent of our and our subsidiaries' total assets
consolidated as of the end of any two of the three most recently completed
fiscal years;
(2) our and our subsidiaries' proportionate share of the subsidiary's
total assets exceeds 10 percent of our and our subsidiaries' total assets
consolidated as of the end of any two of the three most recently completed
fiscal years; or
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(3) our and our other subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the subsidiary
exceeds 10 percent of our and our subsidiaries' consolidated income as of
the end of any two of the three most recently completed fiscal years.
"stated maturity" when used with respect to any security or any installment
of interest thereon will mean the date specified in such security as the fixed
date on which the principal of such security or such installment of interest is
due and payable.
"subsidiary" will mean:
(1) a corporation a majority of whose capital stock with voting power,
under ordinary circumstances, to elect directors is at the time, directly
or indirectly, owned by us, by us and our subsidiary or subsidiaries or by
our subsidiary or subsidiaries; or
(2) any person other than a corporation in which we, our subsidiary or
subsidiaries or we and our subsidiary or subsidiaries, directly or
indirectly, at the date of determination thereof has at least majority
ownership interest;
provided, however, that no corporation shall be deemed a subsidiary until we,
our subsidiary or subsidiaries, or we and our subsidiary or subsidiaries acquire
more than 50% of the outstanding voting stock thereof and have elected a
majority of its board of directors.
Restrictions on Liens
We will not incur, create, assume or otherwise become liable with respect
to any indebtedness secured by a lien, or guarantee any indebtedness with a
guarantee which is secured by a lien, on any principal domestic property or any
shares of stock or indebtedness of any significant subsidiary, without
effectively providing that the debt securities of each series (together with, if
we shall so determine, any other indebtedness then existing or thereafter
created ranking equally with the debt securities of each series) shall be
secured equally and ratably with (or, at our option, prior to) such secured
indebtedness, so long as such secured indebtedness shall be so secured;
provided, however, that this covenant will not apply to indebtedness secured by:
(1) liens existing on the date of the indenture;
(2) liens in favor of governmental bodies to secure progress, advance
or other payments;
(3) liens existing on property, shares of stock or indebtedness at the
time of acquisition thereof (including acquisition through lease, merger or
consolidation) or liens to secure the payment of all or any part of the
purchase price thereof or the cost of construction, installation,
renovation, improvement or development thereon or thereof or to secure any
indebtedness incurred prior to, at the time of, or within 360 days after
the later of the acquisition, completion of such construction,
installation, renovation, improvement or development or the commencement of
full operation of such property or within 360 days after the acquisition of
such shares or indebtedness for the purpose of financing all or any part of
the purchase price thereof;
(4) liens securing indebtedness in an aggregate amount which, at the
time of incurrence and together with all outstanding attributable debt in
respect of sale and leaseback transactions permitted by clause (2) in the
"Restrictions on Sales and Leasebacks" covenant, does not exceed ten
percent of our consolidated net tangible assets;
(5) liens securing indebtedness other than funded debt; and
(6) any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any lien referred to
in the foregoing clauses (1) through (5) inclusive; provided that such
extension, renewal or replacement of such lien is limited to all or any
part of the same property, shares of stock or indebtedness that secured the
lien extended, renewed or replaced
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(plus improvements on such property), and that such secured indebtedness at
such time is not increased.
Restrictions on Sales and Leasebacks
We will not enter into any sale and leaseback transaction, unless:
(1) the principal domestic property is sold within 360 days from the
date of acquisition of such principal domestic property or the date of the
completion of construction or commencement of full operations of such
principal domestic property, whichever is later; or
(2) within 120 days after such sale we apply or cause to be applied to
the retirement of funded debt of our or of any of our subsidiaries (other
than our funded debt which by its terms or the terms of the instrument
pursuant to which it was issued is subordinate in right of payment to the
debt securities of each series) an amount not less than the greater of (A)
the net proceeds of the sale of such principal domestic property or (B) the
fair value (as determined in any manner approved by our board of directors)
of such principal domestic property.
The provisions of this covenant shall not prevent a sale and leaseback
transaction if:
(1) the lease entered into by us in connection therewith is for a
period, including renewals, of not more than 36 months; or
(2) we would, at the time of entering into such sale and leaseback
transaction, be entitled, without equally and ratably securing the debt
securities, to create or assume a lien on such principal domestic property
securing indebtedness in an amount at least equal to the attributable debt
in respect of such sale and leaseback transaction pursuant to clause (4)
above in the "Restrictions on Liens" covenant.
MERGER, CONSOLIDATION OR SALE OF ASSETS
We shall not consolidate with or merge with or into any other corporation
or transfer all or substantially all of its property and assets as an entirety
to any person, unless:
(1) either we shall be the continuing person, or the person (if other
than us) formed by such consolidation or into which we are merged or to
which all or substantially all of our properties and assets as an entirety
are transferred is a corporation organized and existing under the laws of
the United States or any State thereof or the District of Columbia which
expressly assumes all of our obligations under each series of debt
securities and the indenture with respect to each such series; and
(2) immediately before and immediately after giving effect to such
transaction, no event of default and no event which, after notice or
passage of time or both, would become an event of default shall have
occurred and be continuing.
Notwithstanding the foregoing, any subsidiary may consolidate with, merge
with or into or transfer all or part of its properties and assets to us or any
of our other subsidiaries.
RANKING OF DEBT SECURITIES
Senior debt securities
The senior debt securities will be our unsecured senior obligations and
will:
- rank pari passu in right of payment with all our other senior
indebtedness, which term is defined below under "Subordinated debt
securities";
- be effectively subordinated in right of payment to all our secured
indebtedness to the extent of the value of the assets securing such
indebtedness; and
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- be effectively subordinated to all of our subsidiaries' indebtedness and
all mandatory redemption preferred stock of our subsidiaries.
Except as otherwise set forth in the applicable senior indenture or
specified in an authorizing resolution and/or supplemental indenture, if any,
relating to a series of senior debt securities to be issued, there will be no
limitations in any senior indenture on the amount of additional indebtedness
which may rank pari passu with the senior debt securities or on the amount of
indebtedness, secured or otherwise, which may be incurred or preferred stock
which may be issued by any of our subsidiaries; provided, however, that the
incurrence of secured indebtedness by us is subject to the limitations set forth
in the "Restrictions on Liens" covenant.
Subordinated debt securities
The subordinated debt securities will be our unsecured obligations. Unless
otherwise provided in the applicable prospectus supplement, the payment of
principal of, interest on and all other amounts owing in respect of the
subordinated debt securities will be subordinated in right of payment to the
prior payment in full in cash of principal of, interest on and all other amounts
owing in respect of all of our senior indebtedness. Upon any payment or
distribution of our assets of any kind or character, whether in cash, property
or securities, to creditors upon any total or partial liquidation, dissolution,
winding up, reorganization, assignment for the benefit of creditors or
marshaling of our assets or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to us or our property, whether
voluntary or involuntary, all principal of, interest on and all other amounts
due or to become due shall be paid, first, to all senior indebtedness in full in
cash, or such payment duly provided for to the satisfaction of the holders of
senior indebtedness, before any payment or distribution of any kind or character
is made on account of any principal of, interest on or other amounts owing in
respect of the subordinated debt securities, or for the acquisition of any of
the subordinated debt securities for cash, property or otherwise.
If any default occurs and is continuing in the payment when due, whether at
maturity, upon any redemption, by declaration or otherwise, of any principal of,
interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees with respect to, any senior indebtedness, no payment of
any kind or character shall be made by or on behalf of us or any other person on
our or their behalf with respect to any principal of, interest on or other
amounts owing in respect of the subordinated debt securities or to acquire any
of the subordinated debt securities for cash, property or otherwise.
If any other event of default occurs and is continuing with respect to any
senior indebtedness, as such event of default is defined in the instrument
creating or evidencing such senior indebtedness, permitting the holders of such
senior indebtedness then outstanding to accelerate the maturity thereof and if
the representative (as defined in the applicable indenture) for the respective
issue of senior indebtedness gives written notice of the event of default to the
trustee (a "default notice"), then, unless and until all events of default have
been cured or waived or have ceased to exist or the trustee receives notice from
the representative for the respective issue of senior indebtedness terminating
the blockage period (as defined below), during the 180 days after the delivery
of such default notice (the "blockage period"), neither we nor any other person
on its behalf shall:
(1) make any payment of any kind or character with respect to any
principal of, interest on or other amounts owing in respect of the
subordinated debt securities; or
(2) acquire any of the subordinated debt securities for cash, property
or otherwise.
Notwithstanding anything herein to the contrary, in no event will a
blockage period extend beyond 180 days from the date the payment on the
subordinated debt securities was due and only one such blockage period may be
commenced within any 360 consecutive days. No event of default which existed or
was continuing on the date of the commencement of any blockage period with
respect to the senior indebtedness shall be, or be made, the basis for
commencement of a second blockage period by the representative of such senior
indebtedness whether or not within a period of 360 consecutive days unless such
event of default shall have been cured or waived for a period of not less than
90 consecutive days (it
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being acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such
blockage period that, in either case, would give rise to an event of default
pursuant to any provisions under which an event of default previously existed or
was continuing shall constitute a new event of default for this purpose).
The subordinated indentures will not restrict the amount of our or our
subsidiaries' senior indebtedness or other indebtedness. As a result of the
foregoing provisions, in the event of our insolvency, holders of the
subordinated debt securities may recover ratably less than our general
creditors.
"senior indebtedness" will be defined in each subordinated indenture as
indebtedness, whether outstanding on the date of issue of any subordinated debt
securities or thereafter created, incurred, assumed or guaranteed by us, other
than the following:
(1) any indebtedness as to which, by the terms of the instrument
creating or evidencing such indebtedness, it is expressly provided that
such indebtedness is subordinated in right of payment to all of our
indebtedness not expressly subordinated to such indebtedness;
(2) any indebtedness which, by its terms, expressly refers to the
subordinated debt securities and states that such indebtedness shall not be
senior, shall be pari passu or shall be subordinated in right of payment to
the subordinated debt securities;
(3) the subordinated debt securities of the same or another series;
and
(4) indebtedness of or amounts owed by us for compensation to
employees, or for goods, materials and services purchased in the ordinary
course of business.
DISCHARGE
We generally may terminate our obligations under any series of debt
securities and the indenture with respect to such series, at any time:
(1) by delivering all outstanding debt securities of such series to
the trustee for cancellation and paying all sums payable by it under such
debt securities and the indenture with respect to such series; or
(2) after giving notice to the trustee of our intention to defease all
of the debt securities of such series, by irrevocably depositing with the
trustee or a paying agent
(a) in the case of any debt securities of any series denominated in
U.S. dollars, cash or U.S. government obligations sufficient to pay all
principal of and interest on such debt securities; and
(b) in the case of any debt securities of any series denominated in
any currency other than U.S. dollars, an amount of the applicable
currency in which the debt securities are denominated sufficient to pay
all principal of and interest on such debt securities.
However, if the irrevocable deposit pursuant to (2) above is to be made on or
prior to one year from the stated maturity for payment of principal of such
series of debt securities, we shall be required to deliver to the trustee either
an opinion of counsel with no material qualifications or a favorable ruling of
the Internal Revenue Service, in either case to the effect that holders of such
debt securities:
(1) will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit (and the defeasance contemplated in
connection therewith); and
(2) will be subject to federal income tax on the same amounts and in
the same manner and at the same time as would have been the case if such
deposit and defeasance had not occurred.
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MODIFICATION AND WAIVER
We and the trustee may modify and amend the indenture with the consent of
the holders of not less than a majority in principal amount of the outstanding
debt securities of all series affected thereby (voting as a single class);
provided, however, that such modification or amendment may not, without the
consent of each holder of the debt securities affected thereby:
(1) change the stated maturity of the principal of or any installment
of interest with respect to the debt securities;
(2) reduce the principal amount of, or the rate of interest on, the
debt securities;
(3) change the currency of payment of principal of or interest on the
debt securities;
(4) impair the right to institute suit for the enforcement of any
payment on or with respect to the debt securities;
(5) reduce the above-stated percentage of holders of the debt
securities of any series necessary to modify or amend the indenture
relating to such series;
(6) modify the foregoing requirements or reduce the percentage of
outstanding debt securities necessary to waive any covenant or past
default;
(7) in the case of any subordinated indenture, modify the
subordination provisions thereof in a manner adverse to the holders of
subordinated debt securities of any series then outstanding; or
(8) in the case of any convertible debt securities, adversely affect
the right to convert the debt securities into common stock in accordance
with the provisions of the applicable indenture.
Holders of not less than a majority in principal amount of the outstanding
debt securities of all series affected thereby (voting as a single class) may
waive certain past defaults and may waive compliance by us with any provision of
the indenture relating to such debt securities (subject to the immediately
preceding sentence); provided, however, that:
(1) without the consent of each holder of debt securities affected
thereby, no waiver may be made of a default in the payment of the principal
of or interest on any debt security; and
(2) only the holders of a majority in principal amount of debt
securities of a particular series may waive compliance with a provision of
the indenture relating to such series or the debt securities of such series
having applicability solely to such series.
EVENTS OF DEFAULT AND NOTICE THEREOF
The following events are "events of default" with respect to any series of
debt securities issued thereunder:
(1) failure to pay interest on any debt securities of such series
within 30 days of when due or principal of any debt securities of such
series when due (including any sinking fund installment);
(2) failure to perform any other agreement contained in the debt
securities of such series or the indenture relating to such series (other
than an agreement relating solely to another series of debt securities) for
60 days after notice; and
(3) certain events of bankruptcy, insolvency or reorganization with
respect to us.
Additional or different events of default, if any, applicable to the series
of debt securities in respect of which this prospectus is being delivered will
be specified in the applicable prospectus supplement.
The trustee under such indenture shall, within 75 days after the occurrence
of any default (the term "default" to include the events specified above without
grace or notice) with respect to any series of debt securities actually known to
it, give to the holders of such debt securities notice of such default;
provided,
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however, that, except in the case of a default in the payment of principal of or
interest on any of the debt securities of such series or in the payment of a
sinking fund installment, the trustee for such series shall be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the interest of the holders of such debt securities. We shall
certify to the trustee quarterly as to whether any default exists.
In the case of an event of default, other than an event of default
resulting from bankruptcy, insolvency or reorganization, with respect to any
series of debt securities shall occur and be continuing, the trustee for such
series or the holders of at least 25% in aggregate principal amount of the debt
securities of such series then outstanding, by notice in writing to us (and to
the trustee for such series if given by the holders of the debt securities of
such series), will be entitled to declare all unpaid principal of and accrued
interest on such debt securities then outstanding to be due and payable
immediately.
In the case of an event of default resulting from certain events of
bankruptcy, insolvency or reorganization, all unpaid principal of and accrued
interest on all debt securities of such series then outstanding shall be due and
payable immediately without any declaration or other act on the part of the
trustee for such series or the holders of any debt securities of such series.
Such acceleration may be annulled and past defaults (except, unless
theretofore cured, a default in payment of principal of or interest on the debt
securities of such series) may be waived by the holders of a majority in
principal amount of the debt securities of such series then outstanding upon the
conditions provided in the applicable indenture.
No holder of the debt securities of any series issued thereunder may pursue
any remedy under such indenture unless the trustee for such series shall have
failed to act after, among other things, notice of an event of default and
request by holders of at least 25% in principal amount of the debt securities of
such series of which the event of default has occurred and the offer to the
trustee for such series of indemnity satisfactory to it; provided, however, that
such provision does not affect the right to sue for enforcement of any overdue
payment on such debt securities.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the debt securities of any
series will be convertible into common stock will be set forth in the prospectus
supplement relating thereto. Such terms will include the conversion price (or
manner of calculation thereof), the conversion period, provisions as to whether
conversion will be at the option of the holders of such series of debt
securities or at our option, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such series of debt securities.
THE TRUSTEE
The trustee for each series of debt securities will be Harris Trust and
Savings Bank. Each indenture will contain certain limitations on a right of the
trustee, as our creditor, to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security or
otherwise. The trustee will be permitted to engage in other transactions;
provided, however, that if it acquires any conflicting interest, it must
eliminate such conflict or resign.
The holders of a majority in principal amount of all outstanding debt
securities of a series (or if more than one series is affected thereby, of all
series so affected, voting as a single class) will have the right to direct the
time, method and place of conducting any proceeding for exercising any remedy or
power available to the trustee for such series or all such series so affected.
In case an event of default shall occur (and shall not be cured) under any
indenture relating to a series of debt securities and is actually known to a
responsible officer of the trustee for such series, such trustee shall exercise
such of the rights and powers vested in it by such indenture and use the same
degree of care and skill in its exercise as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs. Subject to such
provisions, the trustee will not be under any obligation to
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exercise any of its rights or powers under the applicable indenture at the
request of any of the holders of debt securities unless they shall have offered
to the trustee security and indemnity satisfactory to it.
GOVERNING LAW
The indenture and the debt securities will be governed by the laws of the
State of New York.
GLOBAL SECURITIES; BOOK-ENTRY SYSTEM
We may issue the debt securities of any series in whole or in part in the
form of one or more global securities to be deposited with, or on behalf of, a
depository (the "depository") identified in the prospectus supplement relating
to such series. Global securities, if any, issued in the United States are
expected to be deposited with The Depository Trust Company ("DTC"), as
depository. Global securities will be issued in fully registered form and may be
issued in either temporary or permanent form. Unless and until it is exchanged
in whole or in part for the individual debt securities represented thereby, a
global security may not be transferred except as a whole by the depository for
such global security to a nominee of such depository or by a nominee of such
depository to such depository or another nominee of such depository or by such
depository or any nominee of such depository to a successor depository or any
nominee of such successor.
The specific terms of the depository arrangement with respect to any series
of debt securities will be described in the prospectus supplement relating to
such series. We expect that unless otherwise indicated in the applicable
prospectus supplement, the following provisions will apply to depository
arrangements.
Upon the issuance of a global security, the depository for such global
security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual debt securities
represented by such global security to the accounts of persons that have
accounts with such depository ("participants"). Such accounts will be designated
by the underwriters, dealers or agents with respect to such debt securities or
by us if such debt securities are offered directly by us. Ownership of
beneficial interests in such global security will be limited to participants or
persons that may hold interests through participants.
We expect that, pursuant to procedures established by DTC, ownership of
beneficial interests in any global security with respect to which DTC is the
depository will be shown on, and the transfer of that ownership will be effected
only through, records maintained by DTC or its nominee (with respect to
beneficial interests of participants) and records of participants (with respect
to beneficial interests of persons who hold through participants). Neither we
nor the trustee will have any responsibility or liability for any aspect of the
records of DTC or for maintaining, supervising or reviewing any records of DTC
or any of its participants relating to beneficial ownership interests in the
debt securities. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and laws may impair the ability to own, pledge or transfer beneficial
interest in a global security.
So long as the depository for a global security or its nominee is the
registered owner of such global security, such depository or such nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by such global security for all purposes under the
applicable indenture. Except as described below or in the applicable prospectus
supplement, owners of beneficial interest in a global security will not be
entitled to have any of the individual debt securities represented by such
global security registered in their names, will not receive or be entitled to
receive physical delivery of any such debt securities in definitive form and
will not be considered the owners or holders thereof under the applicable
indenture. Beneficial owners of debt securities evidenced by a global security
will not be considered the owners or holders thereof under the applicable
indenture for any purpose, including with respect to the giving of any
direction, instructions or approvals to the trustee thereunder. Accordingly,
each person owning a beneficial interest in a global security with respect to
which DTC is the depository must rely on the procedures of DTC and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interests, to exercise any rights of a holder under the
applicable
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indenture. We understand that, under existing industry practice, if it requests
any action of holders or if an owner of a beneficial interest in a global
security desires to give or take any action which a holder is entitled to give
or take under the applicable indenture, DTC would authorize the participants
holding the relevant beneficial interest to give or take such action, and such
participants would authorize beneficial owners through such participants to give
or take such actions or would otherwise act upon the instructions of beneficial
owners holding through them.
Payments of principal of, and any interest on, individual debt securities
represented by a global security registered in the name of a depository or its
nominee will be made to or at the direction of the depository or its nominee, as
the case may be, as the registered owner of the global security under the
applicable indenture. Under the terms of the applicable indenture, we and the
trustee may treat the persons in whose name debt securities, including a global
security, are registered as the owners thereof for the purpose of receiving such
payments. Consequently, neither we nor the trustee has or will have any
responsibility or liability for the payment of such amounts to beneficial owners
of debt securities (including principal and interest). We believe, however, that
it is currently the policy of DTC to immediately credit the accounts of relevant
participants with such payments, in amounts proportionate to their respective
holdings of beneficial interests in the relevant global security as shown on the
records of DTC or its nominee. We also expect that payments by participants to
owners of beneficial interests in such global security held through such
participants will be governed by standing instructions and customary practices,
as is the case with securities held for the account of customers in bearer form
or registered in street name, and will be the responsibility of such
participants. Redemption notices with respect to any debt securities represented
by a global security will be sent to the depository or its nominee. If less than
all of the debt securities of any series are to be redeemed, we expect the
depository to determine the amount of the interest of each participant in such
debt securities to be redeemed to be determined by lot. None of us, the trustee,
any paying agent or the registrar for such debt securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global
security for such debt securities or for maintaining any records with respect
thereto.
Neither we nor the trustee will be liable for any delay by the holders of a
global security or the depository in identifying the beneficial owners of debt
securities and we and the trustee may conclusively rely on, and will be
protected in relying on, instructions from the holder of a global security or
the depository for all purposes. The rules applicable to DTC and its
participants are on file with the Securities and Exchange Commission.
If a depository for any debt securities is at any time unwilling, unable or
ineligible to continue as depository and a successor depository is not appointed
by us within 90 days, we will issue individual debt securities in exchange for
the global security representing such debt securities. In addition, we may at
any time and in its sole discretion, subject to any limitations described in the
prospectus supplement relating to such debt securities, determine not to have
any of such debt securities represented by one or more global securities and in
such event will issue individual debt securities in exchange for the global
security or securities representing such debt securities. Individual debt
securities so issued will be issued in denominations of $1,000 and integral
multiples thereof.
All moneys paid by us to a paying agent or a trustee for the payment of the
principal of or interest on any debt security which remain unclaimed at the end
of two years after such payment has become due and payable will be repaid to us,
and the holder of such debt security thereafter may look only to us for payment
thereof.
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DESCRIPTION OF SUBORDINATED DEFERRABLE INTEREST DEBENTURES
GENERAL
The subordinated deferrable interest debentures will be our unsecured,
subordinated obligations. We may issue subordinated deferrable interest
debentures from time to time in one or more series under an indenture to be
entered into among us and The Bank of New York, as subordinated debt trustee.
There is no limit on the aggregate principal amount of subordinated deferrable
interest debentures we may issue and we may issue the subordinated deferrable
interest debentures from time to time in one or more series pursuant to a
supplemental indenture or a resolution of our board of directors or a special
committee thereof. The terms of the subordinated deferrable interest debentures
will include those stated in the indenture and in a supplemental indenture and
those made part of the indenture by reference to the Trust Indenture Act of
1939, as amended.
In the event we issue subordinated deferrable interest debentures to a
trust or a trustee of such trust in connection with the issuance of trust
securities by such trust, we may subsequently distribute such subordinated
deferrable interest debentures pro rata to the holders of such trust securities
in connection with the termination of such trust upon the occurrence of certain
events described in the prospectus supplement relating to such trust securities.
We will issue only one series of subordinated deferrable interest debentures to
a trust or a trustee of such trust in connection with the issuance of trust
securities by such trust.
The following summary does not purport to be complete and is subject in all
respects to the provisions of, and is qualified in its entirety by reference to,
the indenture, which is filed as an exhibit to the registration statement of
which this prospectus forms a part, and the Trust Indenture Act of 1939, as
amended. Whenever particular provisions or defined terms in the indenture are
referred to herein, such provisions or defined terms are incorporated by
reference herein.
TERMS
Reference is made to the accompanying prospectus supplement for the
following terms of the series of subordinated deferrable interest debentures
being offered thereby:
(1) the specific title of such subordinated deferrable interest
debentures;
(2) any limit on the aggregate principal amount of such subordinated
deferrable interest debentures;
(3) the date or dates on which the principal of such subordinated
deferrable interest debentures is payable and the right, if any, to extend
such date or dates;
(4) the rate or rates at which such subordinated deferrable interest
debentures will bear interest or the method of determination of such rate
or rates;
(5) the date or dates from which such interest shall accrue, the
interest payment dates on which such interest will be payable or the manner
of determination of such interest payment dates and the record dates for
the determination of holders to whom interest is payable on any such
interest payment dates;
(6) the right, if any, to extend the interest payment periods and the
duration of such extension;
(7) the period or periods within which, the price or prices at which,
and the terms and conditions upon which, such subordinated deferrable
interest debentures may be redeemed, in whole or in part, at our option;
(8) our right and/or obligation, if any, to redeem or purchase such
subordinated deferrable interest debentures pursuant to any sinking fund or
analogous provisions or at the option of the holder thereof and the period
or periods during which, the price or prices at which, and the terms and
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conditions upon which, such subordinated deferrable interest debentures
shall be redeemed or purchased, in whole or part, pursuant to such right
and/or obligation;
(9) the terms of subordination;
(10) if other than denominations of $25 or any integral multiple
thereof, the denominations in which such subordinated deferrable interest
debentures shall be issuable;
(11) any and all other terms with respect to such series; and
(12) whether such subordinated deferrable interest debentures are
issuable as a global security, and in such case, the identity of the
depositary.
Holders of subordinated deferrable interest debentures do not have any
protection in the event of a highly leveraged transaction involving us.
SUBORDINATION
The subordinated deferrable interest debentures will be subordinated and
junior in right of payment to certain of our other indebtedness to the extent
set forth in the accompanying prospectus supplement.
CERTAIN COVENANTS
If we issue subordinated deferrable interest debentures to a trust or a
trustee of such trust in connection with the issuance of trust securities by
such trust and:
(1) there shall have occurred and be continuing any event that would
constitute an event of default under the indenture; or
(2) we shall be in default with respect to our payment of any
obligations under the related trust preferred securities guarantee or trust
common securities guarantee, and such default shall be continuing,
then:
(1) we shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of our capital stock;
(2) we shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any of our debt securities which
rank pari passu with or junior to such subordinated deferrable interest
debentures; and
(3) we shall not make any guarantee payments, other than pursuant to
the trust preferred security guarantees, with respect to the foregoing.
If we issue subordinated deferrable interest debentures to a trust or a
trustee of such trust in connection with the issuance of trust securities by
such trust and we shall have given notice of our election to defer payments of
interest on such subordinated deferrable interest debentures by extending the
interest payment period and such period, or any extension thereof, shall be
continuing, then:
(1) we shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of our capital stock;
(2) we shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any of our debt securities which
rank pari passu with or junior to such subordinated deferrable interest
debentures; and
(3) we shall not make any guarantee payments, other than pursuant to
the trust preferred security guarantees, with respect to the foregoing.
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Notwithstanding the foregoing restrictions, we will be permitted, in any
event, to make dividend, redemption, liquidation and guarantee payments on
capital stock, and interest, principal, redemption and guarantee payments on
debt securities we issued ranking pari passu with or junior to subordinated
deferrable interest debentures, where the payment is made by way of securities
(including capital stock) that rank junior to the securities on which such
payment is being made.
If we issue subordinated deferrable interest debentures to a trust or a
trustee of such trust in connection with the issuance of trust securities of
such trust, for so long as such trust securities remain outstanding, we will
covenant:
(1) to directly or indirectly maintain 100% ownership of the trust
common securities of such trust; provided, however, that any of our
permitted successors under the indenture may succeed to our ownership of
such trust common securities;
(2) not to cause, as sponsor of such trust, or to permit, as holder of
the trust common securities of such trust, the termination, dissolution or
winding-up of such trust, except in connection with a distribution of the
subordinated deferrable interest debentures as provided in the declaration
of such trust and in connection with certain mergers, consolidations or
amalgamations;
(3) to use our reasonable efforts to cause such trust
(a) to remain a statutory business trust, except in connection with
the distribution of subordinated deferrable interest debentures to the
holders of trust securities in liquidation of such trust, the redemption
of all of the trust securities of such trust, or certain mergers,
consolidations or amalgamations, each as permitted by the declaration of
such trust; and
(b) to otherwise continue not to be classified as an association
taxable as a corporation or partnership for united states federal income
tax purposes; and
(4) to use reasonable efforts to cause each holder of trust securities
of such trust to be treated as owning an undivided beneficial interest in
the subordinated deferrable interest debentures issued to such trust.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
We may issue subordinated deferrable interest debentures of each series in
registered form and in either certificated form or represented by one or more
global securities. If not represented by one or more global securities,
subordinated deferrable interest debentures may be presented for registration of
transfer (with the form of transfer endorsed thereon duly executed) or exchange
at the office of the debt registrar or at the office of any transfer agent
designated by us for such purpose with respect to any series of subordinated
deferrable interest debentures and referred to in an applicable prospectus
supplement, without service charge and upon payment of any taxes and other
governmental charges. Such transfer or exchange will be effected upon the debt
registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. We have
appointed the subordinated debt trustee as debt registrar with respect to each
series of subordinated deferrable interest debentures. If a prospectus
supplement refers to any transfer agents (in addition to the debt registrar)
initially designated by us with respect to any series of subordinated deferrable
interest debentures, we may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that we will be required to maintain a transfer
agent in each place of payment for such series. We may at any time designate
additional transfer agents with respect to any series of subordinated deferrable
interest debentures.
In the event of any redemption in part, we shall not be required to:
(1) issue, register the transfer of or exchange any subordinated
deferrable interest debentures during a period beginning at the opening of
business 15 days before any selection for redemption of subordinated
deferrable interest debentures of like tenor and of the series of which
such subordinated deferrable interest debentures are a part, and ending at
the close of business on the earliest date on
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which the relevant notice of redemption is deemed to have been given to all
holders of subordinated deferrable interest debentures of like tenor and of
such series to be redeemed; and
(2) register the transfer of or exchange any subordinated deferrable
interest debentures so selected for redemption, in whole or in part, except
the unredeemed portion of any subordinated deferrable interest debentures
being redeemed in part.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable prospectus supplement, payment
of principal of and premium, if any, on any subordinated deferrable interest
debentures will be made only against surrender to the paying agent of such
subordinated deferrable interest debentures. Unless otherwise indicated in an
applicable prospectus supplement, principal of, any premium, if any, and
interest, if any, on subordinated deferrable interest debentures will be
payable, subject to any applicable laws and regulations, at the office of such
paying agent or paying agents as we may designate from time to time, except that
at our option, payment of any interest may be made by check mailed to the
address of the person entitled thereto as such address as shall appear in the
debt register with respect to such subordinated deferrable interest debentures.
Unless otherwise indicated in an applicable prospectus supplement, payment of
interest on a subordinated deferrable interest debenture on any interest payment
date will be made to the person in whose name such subordinated deferrable
interest debenture (or predecessor security) is registered at the close of
business on the regular record date for such interest payment.
The subordinated debt trustee will act as paying agent with respect to each
series of subordinated deferrable interest debentures. We may at any time
designate additional paying agents or rescind the designation of any paying
agents or approve a change in the office through which any paying agent acts,
except that we will be required to maintain a paying agent in each place of
payment for each series of subordinated deferrable interest debentures.
All moneys paid by us to a paying agent for the payment of the principal of
or premium or interest, if any, on any subordinated deferrable interest
debentures of any series which remain unclaimed at the end of two years after
such principal or premium or interest, if any, shall have become due and payable
will be repaid to us and the holder of such subordinated deferrable interest
debentures will thereafter look only to us for payment thereof.
GLOBAL SECURITIES
If any subordinated deferrable interest debentures of a series are
represented by one or more global securities, the applicable prospectus
supplement will describe the circumstances, if any, under which beneficial
owners of interests in any such global security may exchange such interests for
subordinated deferrable interest debentures of such series and of like tenor and
principal amount in any authorized form and denomination. Principal of and any
premium, if any, and interest on a global security will be payable in the manner
described in the applicable prospectus supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of subordinated deferrable interest debentures to be
represented by a global security will be described in the applicable prospectus
supplement.
MODIFICATION OF THE INDENTURE
We and the subordinated debt trustee, with the consent of the holders of
not less than a majority in principal amount of the subordinated deferrable
interest debentures of each series which are affected by the modification, may
modify the indenture or any supplemental indenture affecting that series or the
rights of the holders of that series of subordinated deferrable interest
debentures; provided, however, that
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no such modification may, without the consent of the holder of each outstanding
subordinated deferrable interest debenture affected thereby:
(1) extend the fixed maturity of any subordinated deferrable interest
debentures of any series, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, or reduce any
premium payable upon the redemption thereof, without the consent of the
holder of each subordinated deferrable interest debenture so affected; or
(2) reduce the percentage of subordinated deferrable interest
debentures the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of each then
outstanding subordinated deferrable interest debenture affected thereby.
In addition, we and the subordinated debt trustee may execute, without the
consent of any holder of subordinated deferrable interest debentures, any
supplemental indenture for certain other usual purposes including the creation
of any new series of subordinated deferrable interest debentures.
EVENTS OF DEFAULT
With respect to a particular series of subordinated deferrable interest
debentures, one or more of the following described events which has occurred and
is continuing constitutes an event of default with respect to such series of
subordinated deferrable interest debentures:
(1) failure for 30 days to pay interest on the subordinated deferrable
interest debentures of that series, including any additional interest in
respect thereof, when due; provided, however, that a valid extension of the
interest payment period by us shall not constitute a default in the payment
of interest for this purpose;
(2) failure to pay principal or premium, if any, on the subordinated
deferrable interest debentures of that series when due whether at maturity,
upon redemption, by declaration or otherwise, or to make any sinking fund
payment with respect to that series;
(3) failure to observe or perform any other covenant (other than those
specifically relating to another series) contained in the indenture for 90
days after written notice to us from the subordinated debt trustee or the
holders of at least 25% in principal amount of the outstanding subordinated
deferrable interest debentures of that series;
(4) certain events of bankruptcy, insolvency or reorganization of us;
or
(5) in the event subordinated deferrable interest debentures are
issued to a trust or a trustee of such trust in connection with the
issuance of trust securities by such trust, the voluntary or involuntary
dissolution, winding-up or termination of such trust, except in connection
with the distribution of subordinated deferrable interest debentures to the
holders of trust securities in liquidation of such trust, the redemption of
all of the trust securities of such trust, or certain mergers,
consolidations or amalgamations, each as permitted by the declaration of
such trust.
The holders of a majority in aggregate outstanding amount of any series of
subordinated deferrable interest debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
subordinated debt trustee for the series. The subordinated debt trustee or the
holders of not less than 25% in aggregate outstanding principal amount of any
particular series of the subordinated deferrable interest debentures may declare
the principal immediately due and payable upon an event of default with respect
to such series, but the holders of a majority in aggregate outstanding principal
amount of such series may annul such declaration and waive the default with
respect to such series if the event of default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration and any applicable premium has been deposited
with the subordinated debt trustee. If an event of default results from our
failure to pay when due principal of or interest on the subordinated deferrable
interest debentures issued to a trust, during the continuance of such an event
of default a holder of trust preferred securities issued by such trust may
immediately institute a
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legal proceeding directly against us to obtain payment of such principal or
interest on subordinated deferrable interest debentures having a principal
amount equal to the aggregate liquidation amount of the trust preferred
securities owned of record by such holder.
The holders of a majority in aggregate outstanding principal amount of any
series of subordinated deferrable interest debentures affected thereby may, on
behalf of the holders of all the subordinated deferrable interest debentures of
such series, waive any past default, except:
(1) a default in the payment of principal, premium, if any, or
interest (unless such default has been cured and a sum sufficient to pay
all matured installments of interest and principal due otherwise than by
acceleration and any applicable premium has been deposited with the
subordinated debt trustee); or
(2) a default in the covenants described in the first or second
paragraph under "-- Certain Covenants" above.
CONSOLIDATION, MERGER AND SALE
There are no covenants which restrict our ability to merge or consolidate
with or into any other corporation, sell or convey all or substantially all of
its assets to any person, firm or corporation or otherwise engage in
restructuring transactions.
DEFEASANCE AND DISCHARGE
We will be discharged from any and all obligations in respect of the
subordinated deferrable interest debentures of any series (except in each case
for certain obligations to register the transfer or exchange of subordinated
deferrable interest debentures, replace, stolen, lost or mutilated subordinated
deferrable interest debentures, maintain paying agencies and hold moneys for
payment in trust) if we deposit with the subordinated debt trustee, in trust,
moneys or U.S. government obligations in an amount sufficient to pay all the
principal of, and interest on, the subordinated deferrable interest debentures
of such series on the dates such payments are due in accordance with the terms
of such subordinated deferrable interest debentures.
GOVERNING LAW
The indenture and the subordinated deferrable interest debentures will be
governed by, and construed in accordance with, the internal laws of the State of
New York.
INFORMATION CONCERNING THE SUBORDINATED DEBT TRUSTEE
The subordinated debt trustee, prior to default, undertakes to perform only
such duties as are specifically set forth in the indenture and, after default,
shall exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to such provision, the
subordinated debt trustee is under no obligation to exercise any of the powers
vested in it by the indenture at the request of any holder of subordinated
deferrable interest debentures, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The subordinated debt trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the subordinated debt trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
We and certain of our affiliates may maintain a deposit account and banking
relationship with the subordinated debt trustee. The subordinated debt trustee
serves as trustee under other indentures pursuant to which our unsecured debt
securities are outstanding.
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MISCELLANEOUS
We will have the right at all times to assign any of its rights or
obligations under the indenture to our direct or indirect wholly owned
subsidiary; provided, however, that in the event of any such assignment, we will
remain liable for all of our obligations thereunder. Subject to the foregoing,
the indenture will be binding upon and inure to the benefit of the parties
thereto and their respective successors and assigns. The indenture provides that
it may not otherwise be assigned by the parties thereto.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and us to sell to the holders, a specified number
of shares of common stock at a future date or dates, which we refer to herein as
"stock purchase contracts." The consideration per share of common stock may be
fixed at the time the stock purchase contracts are issued or may be determined
by reference to a specific formula set forth in the stock purchase contracts.
The stock purchase contracts may be issued separately or as part of units
consisting of a stock purchase contract and debt securities, trust preferred
securities or debt obligations of third parties, including U.S. treasury
securities, securing the holders' obligations to purchase the common stock under
the stock purchase contracts, which we refer to herein as "stock purchase
units." The stock purchase contracts may require us to make periodic payments to
the holders of the stock purchase units or vice versa, and such payments may be
unsecured or prefunded on some basis. The stock purchase contracts may require
holders to secure their obligations thereunder in a specified manner.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units. The description in the prospectus
supplement will not necessarily be complete, and reference will be made to the
stock purchase contracts, and, if applicable, collateral or depositary
arrangements, relating to such stock purchase contracts or stock purchase units.
Material United States federal income tax considerations applicable to the stock
purchase units and the stock purchase contracts will be discussed in the
prospectus supplement relating thereto.
PLAN OF DISTRIBUTION
We and the trusts may sell securities in any of three ways: (1) through
underwriters or dealers; (2) directly to a limited number of institutional
purchasers or to a single purchaser; or (3) through agents. Any such dealer or
agent, in addition to any underwriter, may be deemed to be an underwriter within
the meaning of the Securities Act of 1933, as amended. The terms of the offering
of the securities with respect to which this prospectus is being delivered will
be set forth in the applicable prospectus supplement and will include:
- the name or names of any underwriters, dealers or agents;
- the purchase price of such securities and the proceeds to us from such
sale;
- any underwriting discounts and other items constituting underwriters'
compensation;
- the public offering price; and
- any discounts or concessions which may be allowed or reallowed or paid to
dealers and any securities exchanges on which the securities may be
listed.
If underwriters are used in the sale of securities, such securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more
underwriters acting alone. Unless otherwise set forth in
36
<PAGE> 40
the applicable prospectus supplement, the obligations of the underwriters to
purchase the securities described in the applicable prospectus supplement will
be subject to certain conditions precedent, and the underwriters will be
obligated to purchase all such securities if any are so purchased by them. Any
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
The securities may be sold directly by us or the applicable trust or
through agents designated by us or the applicable trust from time to time. Any
agents involved in the offer or sale of the securities in respect of which this
prospectus is being delivered, and any commissions payable by us or the
applicable trust to such agents, will be set forth in the applicable prospectus
supplement. Unless otherwise indicated in the applicable prospectus supplement,
any such agent will be acting on a best efforts basis for the period of its
appointment.
If dealers are utilized in the sale of any securities, we or the applicable
trust will sell the securities to the dealers, as principals. Any dealer may
resell the securities to the public at varying prices to be determined by the
dealer at the time of resale. The name of any dealer and the terms of the
transaction will be set forth in the prospectus supplement with respect to the
securities being offered.
Securities may also be offered and sold, if so indicated in the applicable
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms, which we refer to herein as the "remarketing firms,"
acting as principals for their own accounts or as our or a trust's agents, as
applicable. Any remarketing firm will be identified and the terms of its
agreement, if any, with us or the applicable trust and its compensation will be
described in the applicable prospectus supplement. Remarketing firms may be
deemed to be underwriters, as that term is defined in the Securities Act of
1933, as amended, in connection with the securities remarketed thereby.
If so indicated in the applicable prospectus supplement, we or the
applicable trust will authorize agents, underwriters or dealers to solicit
offers by certain specified institutions to purchase the securities to which
this prospectus and the applicable prospectus supplement relates from us or the
applicable trust at the public offering price set forth in the applicable
prospectus supplement, plus, if applicable, accrued interest, pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject only to those conditions set
forth in the applicable prospectus supplement, and the applicable prospectus
supplement will set forth the commission payable for solicitation of such
contracts.
Underwriters will not be obligated to make a market in any securities. No
assurance can be given regarding the activity of trading in, or liquidity of,
any securities.
Agents, dealers, underwriters and remarketing firms may be entitled, under
agreements entered into with us or the applicable trust (or both), to
indemnification by us or the applicable trust (or both) against certain civil
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribution to payments they may be required to make in respect thereof.
Agents, dealers, underwriters and remarketing firms may be customers of, engage
in transactions with, or perform services for, us and/or the applicable trust in
the ordinary course of business.
Each series of securities will be a new issue and, other than the common
stock, which is listed on the New York Stock Exchange, will have no established
trading market. We may elect to list any series of securities on an exchange,
and in the case of the common stock, on any additional exchange, but, unless
otherwise specified in the applicable prospectus supplement, we shall not be
obligated to do so. No assurance can be given as to the liquidity of the trading
market for any of the securities.
Agents, underwriters, dealers and remarketing firms may be customers of,
engage in transactions with, or perform services for, us and our subsidiaries in
the ordinary course of business.
37
<PAGE> 41
LEGAL MATTERS
Certain legal matters in connection with the equity securities, the debt
securities, the common stock warrants, the preferred securities guarantees, the
stock purchase contracts and stock purchase units offered hereby will be passed
upon for us by Austin M. O'Toole, Esq., our Senior Vice President and Secretary,
and for any underwriters, agents and dealers by Cahill Gordon & Reindel, New
York, New York. Certain matters of Delaware law relating to the validity of the
trust preferred securities will be passed upon on behalf of the trusts by
Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware counsel
to the trusts. As of December 20, 1999, Mr. O'Toole beneficially owned
approximately 51,333 shares of our common stock and 553 shares of Class A Common
Stock, including exercisable stock options.
EXPERTS
Our annual consolidated financial statements and financial statement
schedules incorporated in this prospectus by reference from the 1998 Annual
Report on Form 10-K have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
38
<PAGE> 42
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The aggregate estimated expenses, other than underwriting discounts and
commissions, in connection with the offering pursuant to this registration
statement are currently anticipated to be as follows (all amounts except for the
Securities and Exchange Commission filing fee are estimated):
<TABLE>
<S> <C>
Registration Fee. $264,000
Printing and Engraving Expenses. 100,000
Legal Fees and Expenses. 50,000
Accounting Fees and Expenses. 50,000
Miscellaneous. 25,000
--------
Total. $489,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporate Law of the State of Delaware
grants each corporation organized thereunder, such as the Registrant, the power
to indemnify directors and officers under certain circumstances. Article FIFTH
of our certificate of incorporation and Article IX of our by-laws provide for
indemnification of directors and officers to the fullest extent permitted by
law.
An indemnity agreement was approved on May 27, 1981, at the annual
meeting of the holders of the common stock and preferred stock of Coastal and is
incorporated herein by reference to the definitive proxy statement of Coastal
(Exhibit A) dated April 15, 1981. In April of 1988, the board of directors of
Coastal approved a revised and updated indemnity agreement which is incorporated
herein by reference to the 1995 Annual Report (Exhibit 28).
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
1.1 Form of underwriting agreement with respect to debt securities
(including form of terms agreement) 1.1 (filed as exhibit 1.1 of
Registrant's registration statement on Form S-3 (Registration No.
333-50075) and incorporated herein by reference).
1.2 Form of underwriting agreement with respect to equity securities
(including form of terms agreement) 1.2 (filed as exhibit 1.2 of
Registrant's registration statement on Form S-3 (Registration No.
333-50075) and incorporated herein by reference).
1.3 Form of underwriting agreement with respect to trust preferred
securities (including form of terms 1.3 agreement) (filed as exhibit
1.3 of Registrant's registration statement on Form S-3 (Registration
No. 333-58981) and incorporated herein by reference).
3.1 Restated certificate of incorporation of Coastal (filed as Module
TCC-ARTL-INCORP on March 28, 1994).
3.2 By-Laws of Coastal, as amended on January 16, 1990 (filed as exhibit
3.4 to Coastal's Annual Report on 3.2 Form 10-K for the year ended
December 31, 1989).
II-1
<PAGE> 43
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<S> <C>
4.1 Form of indenture for the senior debt securities (filed as exhibit 4.1
of Registrant's registration 4.1 statement on Form S-3 (Registration
No. 333-50075) and incorporated herein by reference). Form of senior
debt security (included in exhibit No. 4.1).
4.2 Form of indenture for the subordinated debt securities (filed as
exhibit 4.3 of Registrant's 4.3 registration statement on Form S-3
(Registration No. 333-50075) and incorporated herein by reference).
4.3 Form of subordinated debt security (included in exhibit 4.3).
4.4 Form of indenture for the subordinated deferrable interest debentures
(filed as exhibit 4.5 of
4.5 Registrant's registration statement on Form S-3 (Registration No.
333-50075) and incorporated herein by reference).
4.6 Form of second supplemental indenture to indenture to be used in
connection with the issuance of the 4.6 subordinated deferrable
interest debentures (filed as exhibit 4.7 of Registrant's registration
statement on Form S-3 (Registration No. 333-50075) and incorporated
herein by reference).
4.7 Form of third supplemental indenture to indenture to be used in
connection with the issuance of the subordinated deferrable interest
debentures (filed as exhibit 4.3 of Registrant's registration statement
on Form S-3 (Registration No. 333-58981) and incorporated herein by
reference).
4.8 Form of subordinated deferrable interest debenture (included in
exhibits 4.6 and 4.7).
4.9 Certificate of trust of Coastal Finance II (filed as exhibit 4.10 of
Registrant's registration 4.9 statement on Form S-3 (Registration No.
333-50075) and incorporated herein by reference).
4.10 Certification of trust of Coastal Finance III (filed as exhibit 4.10 of
Registrant's registration 4.10 statement on Form S-3 (Registration No.
333-58981) and incorporated herein by reference).
4.11 Declaration of trust of Coastal Finance II (filed as exhibit 4.12 of
Registrant's registration 4.11 statement on Form S-3 (Registration No.
333-50075) and incorporated herein by reference).
4.12 Declaration of trust of Coastal Finance III (filed as exhibit 4.12 of
Registrant's registration 4.12 statement on Form S-3 (Registration No.
333-58981) and incorporated herein by reference).
4.13 Form of amended and restated declaration of trust of Coastal Finance II
(filed as exhibit 4.14 of 4.13 Registrant's registration statement on
Form S-3 (Registration No. 333-50075) and incorporated herein by
reference).
4.14 Form of amended and restated declaration of trust of Coastal Finance
III (filed as exhibit 4.14 of 4.14 Registrant's registration statement
on Form S-3 (Registration No. 333-58981) and incorporated herein by
reference).
4.15 Form of common stock warrant agreement (filed as exhibit 4.15 of
Registrant's registration statement on 4.15 Form S-3 (File No.
333-50075) and incorporated herein by reference.
4.16 Form of common stock warrant (included in exhibit 4.15).
4.17 Form of guarantee agreement with respect to preferred securities of
Coastal Finance II (filed as 4.17 exhibit 4.18 of Registrant's
registration statement on Form S-3 (Registration No. 333-50075) and
incorporated herein by reference.
4.18 Form of guarantee agreement with respect to preferred securities of
Coastal Finance III (filed as 4.18 exhibit 4.18 of Registrant's
registration statement on Form S-3 (Registration No. 333-58981) and
incorporated herein by reference).
4.19 Form of guarantee agreement with respect to common securities of
Coastal Finance II (filed as exhibit 4.20 of Registrant's registration
statement on Form S-3 (Registration No. 333-50075) and incorporated
herein by reference).
4.20 Form of guarantee agreement with respect to common securities of
Coastal Finance III (filed as 4.20 exhibit 4.20 of Registrant's
registration statement on Form S-3 (Registration No. 333-58981) and
incorporated herein by reference).
4.21 Form of stock purchase contract agreement (filed as exhibit 4.21 of
Registrant's current report on Form 8-K dated July 22, 1999 and
incorporated herein by reference).
4.21(a) Form of Income Prides Certificate (included in exhibit 4.21).
4.21(b) Form of Growth Prides Certificate (included in exhibit 4.21).
4.22 Form of Pledge Agreement (filed as exhibit 4.22 of Registrant's
current report on Form 8-K dated July 22, 1999 and incorporated herein
by reference).
4.23 Form of Remarketing Agreement (filed as exhibit 4.25 of Registrant's
current report on Form 8-K dated July 22, 1999 and incorporated herein
by reference).
5.1 Opinion of Austin M. O'Toole, Esq., Senior Vice President and Secretary
of the Registrant, as to the legality of the securities being
registered.**
5.2 Opinion of Richards, Layton & Finger, P.A. regarding the validity under
Delaware law of the Coastal Finance II trust preferred securities being
registered (filed as exhibit 5.3 of Registrant's registration statement
on Form S-3 (Registration No. 333-50075) and incorporated herein by
reference).
5.3 Opinion of Richards, Layton & Finger, P.A. regarding the validity under
Delaware law of the Coastal Finance III trust preferred securities
being registered (filed as exhibit 5.3 of Registrant's registration
statement on Form S-3 (Registration No. 333-58981) and incorporated
herein by reference).
8 Opinion of Cahill Gordon & Reindel regarding certain tax matters.*
12 Calculation of ratios of earnings to combined fixed charges and
preferred stock dividends of Coastal.*
23.1 Independent Auditors' Consent.
23.2 Consent of Austin M. O'Toole, Esq. (included in exhibit 5.1).**
</TABLE>
II-2
<PAGE> 44
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<S> <C>
23.3 Consent of Richards, Layton & Finger, P.A. (included in exhibits 5.2
and 5.3).
23.4 Consent of Cahill Gordon & Reindel (included in 23.4 exhibit 8).*
24 Powers of Attorney (included on the signature pages hereof).
25.1 Statement of Eligibility of Harris Trust and Savings Bank, as trustee
for the debt securities, on Form 25.1 T-1 (incorporated herein by
reference to exhibit 25 to the registration statement on Form S-3 No.
333-44527 of The Coastal Corporation).
25.2 Statement of Eligibility of The Bank of New York, as trustee for the
subordinated deferrable interest 25.2 debentures indenture, on Form T-1
(filed as exhibit 25.2 of Registrant's registration statement on Form
S-3 (Registration No. 333-50075) and incorporated herein by reference).
25.3 Statement of Eligibility of The Bank of New York, as trustee for
preferred securities of Coastal 25.3 Finance II on Form T-1 (filed as
exhibit 25.5 of Registrant's registration statement on Form S-3
(Registration No. 333-50075) and incorporated herein by reference).
25.4 Statement of Eligibility of The Bank of New York, as trustee for
guarantee of preferred securities of 25.4 Coastal Finance II on Form
T-1 (filed as exhibit 25.6 of Registrant's registration statement on
Form S-3 (Registration No. 333-50075) and incorporated herein by
reference).
25.5 Statement of Eligibility of The Bank of New York, as trustee for
preferred securities of Coastal 25.5 Finance III, on Form T-1 (filed as
exhibit 25.5 of Registrant's registration statement on Form S-3
(Registration No. 333-58981) and incorporated herein by reference).
25.6 Statement of Eligibility of The Bank of New York, as trustee for
guarantee of preferred securities of 25.6 Coastal Finance III, on Form
T-1 (filed as exhibit 25.6 of Registrant's registration statement on
Form S-3 (Registration No. 333-58981) and incorporated herein by
reference).
27.1 Restated financial data schedule for the period ended December 31,
1996 (filed as exhibit 27.1 of Registrant's registration statement on
Form S-3 (Registration No. 333-81095) and incorporated herein by
reference).
27.2 Restated financial data schedule for the period ended March 31, 1997
(filed as exhibit 27.2 of Registrant's registration statement on Form
S-3 (Registration No. 333-81095) and incorporated herein by reference).
27.3 Restated financial data schedule for the period ended June 30, 1997
(filed as exhibit 27.3 of Registrant's registration statement on Form
S-3 (Registration No. 333-81095) and incorporated herein by reference).
27.4 Restated financial data schedule for the period ended September 30,
1997 (filed as exhibit 27.4 of Registrant's registration statement on
Form S-3 (Registration No. 333-81095) and incorporated herein by
reference).
27.5 Restated financial data schedule for the period ended December 31,
1997 (filed as exhibit 27.5 of Registrant's registration statement on
Form S-3 (Registration No. 333-81095) and incorporated herein by
reference).
27.6 Restated financial data schedule for the period ended March 31, 1998
(filed as exhibit 27.6 of Registrant's registration statement on Form
S-3 (Registration No. 333-81095) and incorporated herein by reference).
27.7 Restated financial data schedule for the period ended June 30, 1998
(filed as exhibit 27.7 of Registrant's registration statement on Form
S-3 (Registration No. 333-81095) and incorporated herein by reference).
27.8 Restated financial data schedule for the period ended September 30,
1998 (filed as exhibit 27.8 of Registrant's registration statement on
Form S-3 (Registration No. 333-81095) and incorporated herein by
reference).
</TABLE>
- --------------
* To be filed by amendment.
** Filed herewith.
ITEM 17. UNDERTAKINGS.
THE UNDERSIGNED REGISTRANTS HEREBY UNDERTAKE:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of the
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the
maximum
II-3
<PAGE> 45
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual
report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be
a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(5) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of
prospectus filed as part of a registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497 (h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared
effective.
(6) For the purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrants will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-4
<PAGE> 46
POWERS OF ATTORNEY
Each person whose signature appears below hereby appoints David A. Arledge,
Coby C. Hesse and Austin M. O'Toole and each of them, any one of whom may act
without the joinder of the others, as his attorney-in-fact to sign on his behalf
and in the capacity stated below and to file all amendments and post-effective
amendments to this registration statement, which amendment or amendments may
make such changes and additions in this registration statement as such
attorney-in-fact may deem necessary or appropriate.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON JANUARY 20, 2000.
THE COASTAL CORPORATION
(Registrant)
By: *
----------------------------------
David A. Arledge,
Chairman of the Board, President
and Chief
Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON JANUARY 20, 2000.
COASTAL FINANCE II
By: *
----------------------------------
Name: Coby C. Hesse
Title: trustee
By: *
----------------------------------
Name: Donald H. Gullquist
Title: trustee
By: /s/ AUSTIN M. O'TOOLE
----------------------------------
Name: Austin M. O'Toole
Title: trustee
*By: /s/ AUSTIN M. O'TOOLE
----------------------------------
Austin M. O'Toole
(as attorney-in-fact)
II-5
<PAGE> 47
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON JANUARY 20, 2000.
COASTAL FINANCIAL III
By: *
----------------------------------
Name: Coby C. Hesse
Title: Trustee
By: *
----------------------------------
Name: Donald H. Gullquist
Title: Trustee
By: /s/ AUSTIN M. O'TOOLE
----------------------------------
Name: Austin M. O'Toole
Title: Trustee
*By: /s/ AUSTIN M. O'TOOLE
----------------------------------
Austin M. O'Toole
(as attorney-in-fact)
II-6
<PAGE> 48
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS (WHICH
PERSONS CONSTITUTE A MAJORITY OF REGISTRANT'S BOARD OF DIRECTORS) IN THE
CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
TITLE DATE
----- ----
<C> <S> <C>
* Chairman of the Board, January 20, 2000
- ----------------------------------------------------- President, Chief Executive
David A. Arledge Officer, Chief Financial
Officer and Director
(Principal Executive Officer
and Principal Financial
Officer)
* Senior Executive Vice January 20, 2000
- ----------------------------------------------------- President (Principal
Coby C. Hesse Accounting Officer)
* Director January 20, 2000
- -----------------------------------------------------
John M. Bissell
* Director January 20, 2000
- -----------------------------------------------------
George L. Brundrett, Jr.
* Director January 20, 2000
- -----------------------------------------------------
Harold Burrow
* Director January 20, 2000
- -----------------------------------------------------
James F. Cordes
* Director January 20, 2000
- -----------------------------------------------------
Roy L. Gates
* Director January 20, 2000
- -----------------------------------------------------
Anthony W. Hall, Jr.
* Director January 20, 2000
- -----------------------------------------------------
Kenneth O. Johnson
Director January 20, 2000
- -----------------------------------------------------
Jerome S. Katzin
* Director January 20, 2000
- -----------------------------------------------------
Thomas R. McDade
* Director January 20, 2000
- -----------------------------------------------------
J. Carleton MacNeil, Jr.
* Director January 20, 2000
- -----------------------------------------------------
O. S. Wyatt, Jr.
*By: /s/ AUSTIN M. O'TOOLE
------------------------------------------------
Austin M. O'Toole
(as attorney-in-fact)
</TABLE>
II-7
<PAGE> 49
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Trustee of Coastal Finance II January 20, 2000
- -----------------------------------------------------
Coby C. Hesse
* Trustee of Coastal Finance II January 20, 2000
- -----------------------------------------------------
Donald H. Gullquist
/s/ AUSTIN M. O'TOOLE Trustee of Coastal Finance II January 20, 2000
- -----------------------------------------------------
Austin M. O'Toole
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Trustee of Coastal Finance III January 20, 2000
- -----------------------------------------------------
Coby C. Hesse
* Trustee of Coastal Finance III January 20, 2000
- -----------------------------------------------------
Donald H. Gullquist
/s/ AUSTIN M. O'TOOLE Trustee of Coastal Finance III January 20, 2000
- -----------------------------------------------------
Austin M. O'Toole
*By: /s/ AUSTIN M. O'TOOLE
-----------------------------------------------
Austin M. O'Toole
(as attorney-in-fact)
</TABLE>
II-8
<PAGE> 50
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C>
1.1 Form of underwriting agreement with respect to debt securities
(including form of terms agreement) 1.1 (filed as exhibit 1.1 of
Registrant's registration statement on Form S-3 (Registration No.
333-50075) and incorporated herein by reference).
1.2 Form of underwriting agreement with respect to equity securities
(including form of terms agreement) 1.2 (filed as exhibit 1.2 of
Registrant's registration statement on Form S-3 (Registration No.
333-50075) and incorporated herein by reference).
1.3 Form of underwriting agreement with respect to trust preferred
securities (including form of terms 1.3 agreement) (filed as exhibit
1.3 of Registrant's registration statement on Form S-3 (Registration
No. 333-58981) and incorporated herein by reference).
3.1 Restated certificate of incorporation of Coastal (filed as Module
TCC-ARTL-INCORP on March 28, 1994).
3.2 By-Laws of Coastal, as amended on January 16, 1990 (filed as exhibit
3.4 to Coastal's Annual Report on 3.2 Form 10-K for the year ended
December 31, 1989).
</TABLE>
<PAGE> 51
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C>
4.1 Form of indenture for the senior debt securities (filed as exhibit 4.1
of Registrant's registration 4.1 statement on Form S-3 (Registration
No. 333-50075) and incorporated herein by reference). Form of senior
debt security (included in exhibit No. 4.1).
4.2 Form of indenture for the subordinated debt securities (filed as
exhibit 4.3 of Registrant's 4.3 registration statement on Form S-3
(Registration No. 333-50075) and incorporated herein by reference).
4.3 Form of subordinated debt security (included in exhibit 4.3).
4.4 Form of indenture for the subordinated deferrable interest debentures
(filed as exhibit 4.5 of
4.5 Registrant's registration statement on Form S-3 (Registration No.
333-50075) and incorporated herein by reference).
4.6 Form of second supplemental indenture to indenture to be used in
connection with the issuance of the 4.6 subordinated deferrable
interest debentures (filed as exhibit 4.7 of Registrant's registration
statement on Form S-3 (Registration No. 333-50075) and incorporated
herein by reference).
4.7 Form of third supplemental indenture to indenture to be used in
connection with the issuance of the subordinated deferrable interest
debentures (filed as exhibit 4.3 of Registrant's registration statement
on Form S-3 (Registration No. 333-58981) and incorporated herein by
reference).
4.8 Form of subordinated deferrable interest debenture (included in
exhibits 4.6 and 4.7).
4.9 Certificate of trust of Coastal Finance II (filed as exhibit 4.10 of
Registrant's registration 4.9 statement on Form S-3 (Registration No.
333-50075) and incorporated herein by reference).
4.10 Certification of trust of Coastal Finance III (filed as exhibit 4.10 of
Registrant's registration 4.10 statement on Form S-3 (Registration No.
333-58981) and incorporated herein by reference).
4.11 Declaration of trust of Coastal Finance II (filed as exhibit 4.12 of
Registrant's registration 4.11 statement on Form S-3 (Registration No.
333-50075) and incorporated herein by reference).
4.12 Declaration of trust of Coastal Finance III (filed as exhibit 4.12 of
Registrant's registration 4.12 statement on Form S-3 (Registration No.
333-58981) and incorporated herein by reference).
4.13 Form of amended and restated declaration of trust of Coastal Finance II
(filed as exhibit 4.14 of 4.13 Registrant's registration statement on
Form S-3 (Registration No. 333-50075) and incorporated herein by
reference).
4.14 Form of amended and restated declaration of trust of Coastal Finance
III (filed as exhibit 4.14 of 4.14 Registrant's registration statement
on Form S-3 (Registration No. 333-58981) and incorporated herein by
reference).
4.15 Form of common stock warrant agreement (filed as exhibit 4.15 of
Registrant's registration statement on 4.15 Form S-3 (File No.
333-50075) and incorporated herein by reference.
4.16 Form of common stock warrant (included in exhibit 4.15).
4.17 Form of guarantee agreement with respect to preferred securities of
Coastal Finance II (filed as 4.17 exhibit 4.18 of Registrant's
registration statement on Form S-3 (Registration No. 333-50075) and
incorporated herein by reference.
4.18 Form of guarantee agreement with respect to preferred securities of
Coastal Finance III (filed as 4.18 exhibit 4.18 of Registrant's
registration statement on Form S-3 (Registration No. 333-58981) and
incorporated herein by reference).
4.19 Form of guarantee agreement with respect to common securities of
Coastal Finance II (filed as exhibit 4.20 of Registrant's registration
statement on Form S-3 (Registration No. 333-50075) and incorporated
herein by reference).
4.20 Form of guarantee agreement with respect to common securities of
Coastal Finance III (filed as 4.20 exhibit 4.20 of Registrant's
registration statement on Form S-3 (Registration No. 333-58981) and
incorporated herein by reference).
4.21 Form of stock purchase contract agreement (filed as exhibit 4.21 of
Registrant's current report on Form 8-K dated July 22, 1999 and
incorporated herein by reference).
4.21(a) Form of Income Prides Certificate (included in exhibit 4.21).
4.21(b) Form of Growth Prides Certificate (included in exhibit 4.21).
4.22 Form of Pledge Agreement (filed as exhibit 4.22 of Registrant's
current report on Form 8-K dated July 22, 1999 and incorporated herein
by reference).
4.23 Form of Remarketing Agreement (filed as exhibit 4.25 of Registrant's
current report on Form 8-K dated July 22, 1999 and incorporated herein
by reference).
5.1 Opinion of Austin M. O'Toole, Esq., Senior Vice President and Secretary
of the Registrant, as to the legality of the securities being
registered. **
5.2 Opinion of Richards, Layton & Finger, P.A. regarding the validity under
Delaware law of the Coastal Finance II trust preferred securities being
registered (filed as exhibit 5.3 of Registrant's registration statement
on Form S-3 (Registration No. 333-50075) and incorporated herein by
reference).
5.3 Opinion of Richards, Layton & Finger, P.A. regarding the validity under
Delaware law of the Coastal Finance III trust preferred securities
being registered (filed as exhibit 5.3 of Registrant's registration
statement on Form S-3 (Registration No. 333-58981) and incorporated
herein by reference).
8 Opinion of Cahill Gordon & Reindel regarding certain tax matters.*
12 Calculation of ratios of earnings to combined fixed charges and
preferred stock dividends of Coastal.*
23.1 Independent Auditors' Consent.
23.2 Consent of Austin M. O'Toole, Esq. (included in exhibit 5.1).**
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C>
23.3 Consent of Richards, Layton & Finger, P.A. (included in exhibits 5.2
and 5.3).
23.4 Consent of Cahill Gordon & Reindel (included in 23.4 exhibit 8).*
24 Powers of Attorney (included on the signature pages hereof).
25.1 Statement of Eligibility of Harris Trust and Savings Bank, as trustee
for the debt securities, on Form 25.1 T-1 (incorporated herein by
reference to exhibit 25 to the registration statement on Form S-3 No.
333-44527 of The Coastal Corporation).
25.2 Statement of Eligibility of The Bank of New York, as trustee for the
subordinated deferrable interest 25.2 debentures indenture, on Form T-1
(filed as exhibit 25.2 of Registrant's registration statement on Form
S-3 (Registration No. 333-50075) and incorporated herein by reference).
25.3 Statement of Eligibility of The Bank of New York, as trustee for
preferred securities of Coastal 25.3 Finance II on Form T-1 (filed as
exhibit 25.5 of Registrant's registration statement on Form S-3
(Registration No. 333-50075) and incorporated herein by reference).
25.4 Statement of Eligibility of The Bank of New York, as trustee for
guarantee of preferred securities of 25.4 Coastal Finance II on Form
T-1 (filed as exhibit 25.6 of Registrant's registration statement on
Form S-3 (Registration No. 333-50075) and incorporated herein by
reference).
25.5 Statement of Eligibility of The Bank of New York, as trustee for
preferred securities of Coastal 25.5 Finance III, on Form T-1 (filed as
exhibit 25.5 of Registrant's registration statement on Form S-3
(Registration No. 333-58981) and incorporated herein by reference).
25.6 Statement of Eligibility of The Bank of New York, as trustee for
guarantee of preferred securities of 25.6 Coastal Finance III, on Form
T-1 (filed as exhibit 25.6 of Registrant's registration statement on
Form S-3 (Registration No. 333-58981) and incorporated herein by
reference).
27.1 Restated financial data schedule for the period ended December 31,
1996 (filed as exhibit 27.1 of Registrant's registration statement on
Form S-3 (Registration No. 333-81095) and incorporated herein by
reference).
27.2 Restated financial data schedule for the period ended March 31, 1997
(filed as exhibit 27.2 of Registrant's registration statement on Form
S-3 (Registration No. 333-81095) and incorporated herein by reference).
27.3 Restated financial data schedule for the period ended June 30, 1997
(filed as exhibit 27.3 of Registrant's registration statement on Form
S-3 (Registration No. 333-81095) and incorporated herein by reference).
27.4 Restated financial data schedule for the period ended September 30,
1997 (filed as exhibit 27.4 of Registrant's registration statement on
Form S-3 (Registration No. 333-81095) and incorporated herein by
reference).
27.5 Restated financial data schedule for the period ended December 31,
1997 (filed as exhibit 27.5 of Registrant's registration statement on
Form S-3 (Registration No. 333-81095) and incorporated herein by
reference).
27.6 Restated financial data schedule for the period ended March 31, 1998
(filed as exhibit 27.6 of Registrant's registration statement on Form
S-3 (Registration No. 333-81095) and incorporated herein by reference).
27.7 Restated financial data schedule for the period ended June 30, 1998
(filed as exhibit 27.7 of Registrant's registration statement on Form
S-3 (Registration No. 333-81095) and incorporated herein by reference).
27.8 Restated financial data schedule for the period ended September 30,
1998 (filed as exhibit 27.8 of Registrant's registration statement on
Form S-3 (Registration No. 333-81095) and incorporated herein by
reference).
</TABLE>
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* To be filed by amendment.
** Filed herewith.
<PAGE> 1
EXHIBIT 5.1
January 20, 2000
The Coastal Corporation
Coastal Tower
Nine Greenway Plaza
Houston, TX 77046-0995
Gentlemen:
I have acted as counsel to The Coastal Corporation, a Delaware
corporation (the "Company") and Coastal Finance II and Coastal Finance III
(each, a "Trust"), each a statutory business trust formed under the laws of
Delaware in connection with the registration by the Company and the Trusts of up
to $1 billion aggregate public offering price of various debt and equity
securities of the Company and/or the Trusts, pursuant to a registration
statement on Form S-3 (the "Registration Statement"), filed by the Company and
the Trusts with the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Act"). The securities issued by the Company may be in
the form of (i) unsecured senior debt securities (the "Subordinated Debt
Securities"), which may be convertible into shares of Common Stock of the
Company (the "Common Stock"), (ii) unsecured subordinated debt securities (the
"Subordinated Debt Securities", and, together with the Senior Debt Securities,
the "Debt Securities"), (iii) shares of Preferred Stock (the "Preferred Stock"),
which may be convertible into shares of Common Stock or exchangeable for Debt
Securities, (iv) shares of Common Stock, (v) warrants to purchase shares of
Common Stock (the "Common Stock Warrants"), (vi) unsecured subordinated deferred
interest debentures (the "Subordinated Deferrable Interest Debentures") and
(vii) stock purchase contracts and/or stock purchase units (the "Stock Purchase
Contract" and/or "Stock Purchase Units"), and/or (viii) Trust Preferred
Securities and the related Trust Preferred Securities Guarantee, (as defined
below). The Securities issued by the Trusts may be in the form of preferred
securities evidencing preferred undivided beneficial interests in the assets of
the respective Trust (the "Trust Preferred Securities"). The payment of periodic
cash distributions with respect to Trust Preferred Securities of each of the
Trusts, out of moneys held by each of the Trusts, and payments on liquidation,
redemption or otherwise with respect to such Trust Preferred Securities will be
guaranteed by the Company (each, a "Trust Preferred Securities Guarantee"). The
Debt Securities, the Common Stock, the Preferred Stock, the Subordinated
Deferrable Interest Debentures, the Trust Preferred Securities, the Trust
Preferred Securities Guarantees, the Stock Purchase Contracts, the Stock
Purchase Units and the Common Stock Warrants are referred to collectively as the
"Securities" and individually as a "Security".
The Senior Debt Securities are proposed to be issued under an indenture
(the "Senior
1
<PAGE> 2
Indenture") to be executed between the Company and a trustee to be selected by
the Company. The Subordinated Deferrable Interest Debentures are proposed to be
issued under an indenture (the "Subordinated Deferrable Interest Debentures
Indenture") to be executed between the Company and a trustee to be selected by
the Company. The Trust Preferred Securities Guarantees are proposed to be issued
under a Preferred Securities Guarantee Agreement (the "Preferred Securities
Guarantee Agreement") to be executed between the Company and a Preferred
Securities Guarantee trustee to be selected by the Company. The Common Stock
Warrants are proposed to be issued under a warrant agreement (the "Warrant
Agreement") to be executed between the Company and a bank or trust company as
Warrant Agreement to be selected by the Company. The Stock Purchase Contracts
and/or Stock Purchase Units are proposed to be issued under a stock purchase
agreement (the "Stock Purchase Agreement") to be executed between the Company
and holders of the contracts pursuant to which such holders are obligated to
purchase from the Company and the Company is obligated to Sell to the holders a
specified number of shares of Common Stock. The Stock Purchase Contracts may be
issued separately or as part of Stock Purchase Units consisting of a Stock
Purchase Contract and Senior Debt Securities, Trust Preferred Securities or debt
obligations of third parties, including U.S. treasury securities.
In this connection, I have examined such corporate proceedings of the
Company and I have also examined such statutes, corporate records and other
instruments and documents which I have deemed it necessary to examine for the
purposes of this opinion.
Based on the foregoing, I am of the opinion that:
1. The Company has been dully organized and is validly existing
under the laws of the State of Delaware.
2. With respect to shares of Common Stock, when certificates
representing the shares of Common Stock have been duly
executed, countersigned, registered and delivered either (a)
in accordance with the applicable purchase, underwriting or
similar agreement upon payment of the consideration therefor
provided for therein, or (b) upon conversion, exchange or
exercise of any other Security (including the Common Stock
Warrants) in accordance with the terms of such Security or the
instrument governing such Security providing for such
conversion, exchange or exercise or exercise, the shares of
Common Stock will be duly authorized validly issued, fully
paid and nonassessable.
3. With respect to shares of Preferred Stock, when certificates
representing the shares of Preferred Stock have been duly
executed, countersigned, registered and delivered either (a)
in accordance with the applicable purchase, underwriting or
similar agreement upon payment of the consideration thereof
(not less than the par value of the Preferred Stock) provided
for therein, or (b) upon conversion, exchange or exercise of
any other Security in accordance with the terms of such
Security or the instrument governing such Security providing
2
<PAGE> 3
for such conversion, exchange or exercise, the shares of
Preferred Stock will be duly authorized, validly issued, fully
paid and nonassessable.
4. With respect to the Senior Debt Securities to be issued under
the Senior Indenture, when (i) the Senior Indenture has been
duly executed by the Company and the Trustee and has been duly
qualified under the Trust Indenture Act of 1939, as amended
and (ii) such Senior Debt Securities have been duly executed,
authenticated, issued and delivered in accordance with the
provisions of the Senior Indenture and in accordance with the
applicable purchase, underwriting or similar agreement upon
payment of the consideration therefor provided for therein,
such Debt Securities will be legally issued and will
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their
terms, except as such enforcement is subject to any applicable
bankruptcy, insolvency, reorganization, fraudulent transfer or
other law relating to or affecting creditors' rights generally
and general principles of equity and will be entitled to the
benefits of the Senior Indenture and except that the waiver as
to usury in the Senior Indenture may be unenforceable.
5. With respect to the Subordinated Debt Securities to be issued
under the Subordinated Indenture, when (i) the Subordinated
Indenture has been duly executed by the Company and the
Trustee and has been duly qualified under the Trust Indenture
Act of 1939, as amended and (ii) such Subordinated Debt
Securities have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the
Subordinated Indenture and in accordance with the applicable
purchase, underwriting or similar agreement upon payment of
the consideration thereof provided for therein, such
Subordinated Debt Securities will be legally issued and will
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their
terms, except as such enforcement is subject to any applicable
bankruptcy, insolvency, reorganization, fraudulent transfer or
other law relating to or affecting creditors' rights generally
and general principles of equity and will be entitled to the
benefits of the Subordinated Indenture and except that the
waiver as to usury in the Subordinated Indenture may be
unenforceable.
6. With respect to the Subordinated Deferrable Interest
Debentures to be issued under the Subordinated Deferrable
Interest Debentures Indenture, when (i) the Subordinated
Indenture has been duly executed by the Company and the
Trustee and has been duly qualified under the Trust Indenture
Act of 1939, as amended and (ii) such Subordinated Deferrable
Interest Debentures have been duly executed, authenticated,
issued and delivered in accordance with the provisions of the
Subordinated Deferrable Interest Debentures Indenture and in
accordance with the applicable purchase, underwriting or
similar agreement
3
<PAGE> 4
upon payment of the consideration therefor provided for
therein, such Subordinated Deferrable Interest Debentures will
be legally issued and will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as such enforcement is
subject to any applicable bankruptcy, insolvency,
reorganization, fraudulent transfer or other law relating to
or affecting creditors' rights generally and general
principles of equity and will be entitled to the benefits of
the Subordinated Deferrable Interest Debentures Indenture and
except that the waiver as to usury in the Subordinated
Deferrable Interest Debentures Indenture may be unenforceable.
7. With respect to the Common Stock Warrants, when such Common
Stock Warrants have been duly executed, issued and delivered
in accordance with the provisions of the Warrant Agreement and
in accordance with the applicable purchase, underwriting or
similar agreement, if any, and upon payment of any
consideration therefor provided for therein, such Common Stock
Warrants will be legally issued and will constitute valid and
binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as such
enforcement is subject to any applicable bankruptcy,
insolvency, reorganization, fraudulent transfer or other law
relating to or affecting creditors' rights generally and
general principles of equity and will be entitled to the
benefits of the Warrant Agreement.
8. With respect to the Stock Purchase Contracts and the Stock
Purchase Units, when (i) the Stock Purchase Agreement has been
duly executed by the Company and the holders of the Stock
Purchase Contract or the Stock Purchase Units; and (ii) such
Stock Purchase Contracts and/or Stock Purchase Units have been
duly executed, authenticated, issued and delivered in
accordance with the provisions of the Stock Purchase Agreement
and in accordance with the applicable purchase, underwriting
or similar agreement, such Stock Purchase Contracts or Stock
Purchase Units will be legally issued and will constitute
valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as
such enforcement is subject to any applicable bankruptcy,
insolvency, reorganization, fraudulent transfer or other law
relating to or affecting creditors' rights generally and
general principles of equity and will be entitled to the
benefits of the Stock Purchase Agreement.
9. With respect to the Trust Preferred Securities Guarantees,
when (i) the Trust Preferred Securities Guarantee Agreement
has been duly executed by the Company and the Trustee and has
been duly qualified under the Trust Indenture Act of 1939, as
amended; and (ii) the Trust Preferred Securities have been
duly issued, the Trust Preferred Securities Guarantees will be
legally
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<PAGE> 5
issued and will constitute valid and binding obligations of
the Company, enforceable against the Company in accordance
with their terms, except as such enforcement is subject to any
applicable bankruptcy, insolvency, reorganization, fraudulent
transfer or other law relating to or affecting creditors'
rights generally and general principles of equity and will be
entitled to the benefits of the Trust Preferred Securities
Guarantee Agreement.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to the undersigned under the caption
therein entitled "Legal Matters".
Very truly yours,
/s/ Austin M. O'Toole
5
