AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 4, 1997
REGISTRATION NOS. 333-28349
333-28349-01
333-28349-02
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE SOUTHERN COMPANY 4911
SOUTHERN COMPANY CAPITAL FUNDING, INC. 6719
SOUTHERN COMPANY CAPITAL TRUST I 6733
(EXACT NAME OF REGISTRANT AS SPECIFIED (PRIMARY STANDARD INDUSTRIAL
IN ITS CHARTER) CLASSIFICATION CODE NUMBER)
DELAWARE 58-0690070
DELAWARE 58-2318047
DELAWARE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
270 PEACHTREE STREET, N.W.
ATLANTA, GEORGIA 30303
(770) 393-0650
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
EACH REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
TOMMY CHISHOLM, SECRETARY
THE SOUTHERN COMPANY
270 PEACHTREE STREET, N.W.
ATLANTA, GEORGIA 30303
(770) 393-0650
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE OF EACH REGISTRANT)
PLEASE SEND COPIES OF ALL CORRESPONDENCE TO:
W.L. WESTBROOK JOHN D. MCLANAHAN
FINANCIAL VICE PRESIDENT TROUTMAN SANDERS LLP
THE SOUTHERN COMPANY 600 PEACHTREE STREET, N.E., SUITE 5200
270 PEACHTREE STREET ATLANTA, GEORGIA 30308
ATLANTA, GEORGIA 30303 (404) 885-3000
(770) 393-0650
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE(2)(6)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Exchange Capital Securities, Liquidation
Amount $1,000 per Capital Security, of
Southern Company Capital Trust I....... $325,000,000 100% $325,000,000 $98,485
- ----------------------------------------------------------------------------------------------------
Exchange Series A Junior Subordinated
Deferrable Interest Notes of Southern
Company Capital Funding, Inc.(2).......
- ----------------------------------------------------------------------------------------------------
The Southern Company Exchange Capital
Securities Guarantees(3)(4)............
- ----------------------------------------------------------------------------------------------------
The Southern Company Exchange Junior
Subordinated Notes Guarantee(3)(4).....
- ----------------------------------------------------------------------------------------------------
Total(5)................................ $325,000,000 100% $325,000,000 $98,485
- ----------------------------------------------------------------------------------------------------
</TABLE>
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(1) Estimated for the sole purpose of computing the registration fee. Pursuant
to Rule 457(n) under the Securities Act, no separate fee is payable with
respect to the Exchange Capital Securities Guarantee (the "Exchange Capital
Securities Guarantee").
(2) No separate consideration will be received for the Exchange Series A Junior
Subordinated Deferrable Interest Notes (the "Exchange Junior Subordinated
Notes") distributed upon any liquidation of Southern Company Capital Trust
I.
<PAGE>
(3) No separate consideration will be received for the Exchange Capital
Securities Guarantee or the Exchange Notes Guarantee.
(4) This Registration Statement (as the same may be amended from time to time
(the "Registration Statement")) is deemed to cover rights of holders of
Exchange Capital Securities of Southern Company Capital Trust I under the
Trust Agreement, the rights of holders of Exchange Junior Subordinated Notes
under the Indenture, the rights of the holders of such Exchange Capital
Securities under the Exchange Capital Securities Guarantee, the rights of
holders of the Exchange Junior Subordinated Notes under the Exchange Notes
Guarantee and certain backup undertakings as described herein.
(5) Such amount represents the liquidation amount of the Southern Company
Capital Trust I Exchange Capital Securities to be exchanged hereunder and
the principal amount of Exchange Junior Subordinated Notes that may be
distributed to holders of such Exchange Capital Securities upon any
liquidation of Southern Company Capital Trust I.
(6) Previously paid.
---------------
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 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE>
SOUTHERN COMPANY CAPITAL TRUST I
OFFER TO EXCHANGE ITS
8.19% EXCHANGE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER EXCHANGE CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
8.19% ORIGINAL CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER ORIGINAL CAPITAL SECURITY)
-----------------
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
[LOGO OF SOUTHERN COMPANY APPEARS HERE]
-----------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON SEPTEMBER 3, 1997, UNLESS EXTENDED.
Southern Company Capital Trust I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby offers, upon the terms
and subject to the conditions set forth in this Prospectus (as the same may be
amended or supplemented from time to time, the "Prospectus") and in the
accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange up to $325,000,000 aggregate liquidation amount of its
8.19% Exchange Capital Securities (the "Exchange Capital Securities") which
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement (as defined herein) of
which this Prospectus constitutes a part, for a like liquidation amount of its
outstanding 8.19% Capital Securities (the "Original Capital Securities"), of
which $325,000,000 aggregate liquidation amount are issued and outstanding.
Pursuant to the Exchange Offer, (i) The Southern Company, a Delaware
corporation ("Southern"), is also offering to exchange its guarantee of
payments of cash distributions and payments on liquidation of the Trust or
redemption of the Original Capital Securities (the "Original Capital
Securities Guarantee") for a like guarantee in respect of the Exchange Capital
Securities (the "Exchange Capital Securities Guarantee") and (ii) Southern
Company Capital Funding, Inc., a Delaware corporation ("Capital") and an
indirect, wholly-owned subsidiary of Southern, is offering to exchange
$335,052,000 aggregate principal amount of its Series A 8.19% junior
subordinated deferrable interest notes due February 1, 2037 (the "Original
Junior Subordinated Notes") for a like aggregate principal amount of its
Series A 8.19% exchange junior subordinated deferrable interest notes due
February 1, 2037 (the "Exchange Junior Subordinated Notes"). Southern has
irrevocably and unconditionally guaranteed the due and punctual payment of the
Original Junior Subordinated Notes (the "Original Notes Guarantee") and will
likewise guarantee payment of the Exchange Junior Subordinated Notes (the
"Exchange Notes Guarantee"). The Exchange Capital Securities Guarantee,
Exchange Junior Subordinated Notes and Exchange Notes Guarantee also have been
registered under the Securities Act. The Original Capital Securities, the
Original Capital Securities Guarantee, the Original Junior Subordinated Notes
and the Original Notes Guarantee are collectively referred to herein as the
"Original Securities" and the Exchange Capital Securities, the Exchange
Capital Securities Guarantee, the Exchange Junior Subordinated Notes and the
Exchange Notes Guarantee are collectively referred to herein as the "Exchange
Securities."
This Prospectus and the Letter of Transmittal are first being mailed to all
holders of Original Capital Securities on August 4, 1997.
---------------
SEE "RISK FACTORS" BEGINNING ON PAGE 18 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER ORIGINAL
CAPITAL SECURITIES IN THE EXCHANGE OFFER.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is August 4, 1997.
<PAGE>
(Continued from the previous page)
The terms of the Exchange Securities are identical in all material respects
to the respective terms of the Original Securities, except that (i) the
Exchange Securities have been registered under the Securities Act and
therefore will not be subject to certain restrictions on transfer applicable
to the Original Securities, (ii) the Exchange Capital Securities will not
contain the $100,000 minimum liquidation amount transfer restriction, (iii)
the Exchange Capital Securities will not provide for any increase in the
distribution rate thereon and (iv) the Exchange Junior Subordinated Notes will
not provide for any increase in the interest rate thereon. See "Description of
the Exchange Capital Securities," "Description of the Exchange Junior
Subordinated Notes" and "Description of the Original Securities." The Exchange
Capital Securities are being offered for exchange in order to satisfy certain
obligations of Southern, Capital and the Trust under the Registration Rights
Agreement dated as of February 1, 1997 (the "Registration Rights Agreement")
among Southern, Capital, the Trust and the Initial Purchasers (as defined
herein). In the event that the Exchange Offer is consummated, any Original
Capital Securities which remain outstanding after consummation of the Exchange
Offer and the Exchange Capital Securities issued in the Exchange Offer will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding liquidation amount thereof have taken
certain actions or exercised certain rights under the Trust Agreement (as
defined herein).
The Exchange Capital Securities and the Original Capital Securities
(collectively, the "Capital Securities") represent preferred undivided
beneficial interests in the assets of the Trust. Capital is the owner of all
of the undivided beneficial interests represented by common securities of the
Trust (the "Common Securities," and together with the Capital Securities, the
"Trust Securities"). Bankers Trust Company is the Property Trustee (the
"Property Trustee") of the Trust. The Trust exists for the sole purpose of
issuing the Trust Securities, investing the proceeds thereof in the Junior
Subordinated Notes (as defined herein) and exchanging the Original Junior
Subordinated Notes for the Exchange Junior Subordinated Notes in the Exchange
Offer. The Junior Subordinated Notes will mature on February 1, 2037. Under
certain conditions, Capital has the right to advance the maturity date of the
Junior Subordinated Notes. See "Description of the Exchange Junior
Subordinated Notes--Conditional Right to Advance Maturity." The Capital
Securities will have a preference over the Common Securities under certain
circumstances with respect to cash distributions and amounts payable on
liquidation, redemption or otherwise. See "Description of the Exchange Capital
Securities."
The Junior Subordinated Notes will be unsecured obligations of Capital and
will be subordinate and junior in right of payment to all Senior Indebtedness
of Capital, as described herein. See "Description of the Exchange Junior
Subordinated Notes--Subordination." The Notes Guarantee will be an unsecured
obligation of Southern and will be subordinate and junior in right of payment
to all Senior Indebtedness of Southern. See "Description of the Exchange Notes
Guarantee." Holders of the Capital Securities are entitled to receive
cumulative cash distributions at the rate of 8.19% per annum (the "Securities
Rate"), accruing from February 4, 1997 and payable, unless deferred, semi-
annually in arrears on February 1 and August 1 of each year (each, a
"Distribution Date").
The Securities Rate and the Distribution Dates for the Capital Securities
will correspond to the interest rate and interest and other payment dates on
the Junior Subordinated Notes, which will constitute substantially all the
assets of the Trust. As a result, if principal or interest is not paid on the
Junior Subordinated Notes, no amounts will be paid on the Capital Securities.
CAPITAL HAS THE RIGHT TO DEFER PAYMENTS OF INTEREST ON THE JUNIOR SUBORDINATED
NOTES BY EXTENDING THE INTEREST PAYMENT PERIOD ON THE JUNIOR SUBORDINATED
NOTES, AT ANY TIME AND FROM TIME TO TIME, FOR UP TO 10 CONSECUTIVE SEMI-ANNUAL
PERIODS (EACH, AN "EXTENSION PERIOD"). If interest payments are so deferred,
distributions on the Capital Securities also will be deferred and neither
Southern nor Capital will be permitted, subject to certain exceptions
described herein, to declare or pay any dividend or distribution on any of its
capital stock or make any guarantee payments with respect to the foregoing, or
make any payment on any debt securities issued by it which rank pari passu
with or junior to the Junior Subordinated Notes or the Notes Guarantee. During
any Extension Period, holders of Capital Securities will be required to
include income in the form of original issue discount ("OID") in their gross
income for United States federal income tax purposes in advance of the receipt
of the cash payments attributable to such deferred interest. See "Description
of the Exchange Junior Subordinated Notes--Option to Extend Interest Payment
Period," "Risk Factors--Option to Extend Interest Payment Period" and "Certain
Federal Income Tax Considerations--
2
<PAGE>
Original Issue Discount" and "--Market Discount." Deferred installments of
interest on the Junior Subordinated Notes will bear interest, compounded semi-
annually, at a rate per annum equal to the Securities Rate to the extent
permitted by applicable law. The payment of such deferred interest, together
with interest thereon, will be distributed to the holders of the Capital
Securities as received at the end of any Extension Period.
The Trust Securities are subject to mandatory redemption upon repayment of
the Junior Subordinated Notes at maturity or their earlier redemption. The
Junior Subordinated Notes are redeemable at the option of Capital (in whole or
in part), from time to time, on or after February 1, 2007, or at any time in
whole upon the occurrence of a Tax Event or Investment Company Act Event
(either, a "Special Event"). Upon the occurrence of a Special Event, Capital
will have the option to redeem the Junior Subordinated Notes (and the Trust
Securities will also be redeemed) or distribute the Junior Subordinated Notes
pro rata to the holders of the Trust Securities. See "Description of the
Exchange Capital Securities--Special Event Redemption or Distribution."
The payment of distributions on the Capital Securities is guaranteed by
Southern under the Capital Securities Guarantee Agreement, but only to the
extent that the Trust has funds legally and immediately available therefor
(the "Capital Securities Guarantee"). If Capital fails to make required
payments on the Junior Subordinated Notes, the Trust will not have sufficient
funds to pay such distributions, and the Capital Securities Guarantee does not
cover the payment of distributions when the Trust does not have sufficient
funds legally available therefor. In such event, the remedy of a holder of
Capital Securities is to enforce the Junior Subordinated Notes and the Notes
Guarantee. See "Description of the Exchange Junior Subordinated Notes" and
"Description of the Exchange Notes Guarantee." Southern's obligations under
the Capital Securities Guarantee are subordinate and junior in right of
payment to all of its other liabilities and will rank pari passu (equal in
priority) with the most senior preferred stock of Southern. See "Description
of the Exchange Capital Securities Guarantee." Southern and Capital have,
through the Capital Securities Guarantee, the Notes Guarantee, the
Subordinated Note Indenture, the Junior Subordinated Notes, the Trust
Agreement and the Agreement as to Expenses and Liabilities, fully and
unconditionally guaranteed, subject to certain subordination provisions, all
the Trust's obligations with respect to the Capital Securities.
In the event of the voluntary or involuntary dissolution, winding-up or
termination of the Trust, the holders of the Capital Securities will be
entitled to receive, for each Capital Security, a liquidation amount of $1,000
plus accrued and unpaid distributions thereon (including interest thereon) to
the date of payment, unless in connection with such dissolution, winding-up or
termination, the Junior Subordinated Notes are distributed to the holders of
the Capital Securities. See "Description of the Exchange Capital Securities--
Liquidation Distribution Upon Dissolution."
Except as described herein, the Capital Securities initially will be
represented by a global certificate or certificates registered in the name of
The Depository Trust Company ("DTC") or its nominee. Beneficial interests in
such Capital Securities will be shown on, and transfers thereof will be
effected only through, records maintained by Participants (as defined herein)
in DTC. Except as described herein, Capital Securities in certificated form
will not be issued in exchange for the global certificates. See "Description
of the Exchange Capital Securities--Form, Denomination, Book-Entry Procedures
and Transfer."
The Trust is making the Exchange Offer of the Exchange Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance
of the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither Southern, Capital nor the Trust has sought its own
interpretive letter and there can be no assurance that the staff of the
Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance of the Commission, and subject to
the two immediately following sentences, Southern, Capital and the Trust
believe that Exchange Capital Securities issued pursuant to this Exchange
Offer in exchange for Original Capital Securities may be offered for resale,
resold and otherwise transferred by a holder thereof (other than a holder who
is a broker-dealer) without further compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such
3
<PAGE>
Exchange Capital Securities are acquired in the ordinary course of such
holder's business and that such holder is not participating, and has no
arrangement or understanding with any person to participate, in a distribution
(within the meaning of the Securities Act) of such Exchange Capital
Securities. However, any holder of Original Capital Securities who is an
"affiliate" of Southern, Capital or the Trust or who intends to participate in
the Exchange Offer for the purpose of distributing Exchange Capital
Securities, or any broker-dealer who purchased Original Capital Securities
from the Trust to resell pursuant to Rule 144A under the Securities Act ("Rule
144A") or any other available exemption under the Securities Act, (a) will not
be able to rely on the interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the above-mentioned
interpretive letters, (b) will not be permitted or entitled to tender such
Original Capital Securities in the Exchange Offer and (c) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Original Capital Securities
unless such sale is made pursuant to an exemption from such requirements. In
addition, as described below, if any broker-dealer holds Original Capital
Securities acquired for its own account as a result of market-making or other
trading activities and exchanges such Original Capital Securities for Exchange
Capital Securities, then such broker-dealer must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resales of such
Exchange Capital Securities.
Each holder of Original Capital Securities who wishes to exchange Original
Capital Securities for Exchange Capital Securities in the Exchange Offer will
be required to represent that (i) it is not an "affiliate" of Southern,
Capital or the Trust, (ii) any Exchange Capital Securities to be received by
it are being acquired in the ordinary course of its business, (iii) it has no
arrangement or understanding with any person to participate in a distribution
(within the meaning of the Securities Act) of such Exchange Capital
Securities, and (iv) if such holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities. In
addition, Southern, Capital and the Trust may require such holder, as a
condition to such holder's eligibility to participate in the Exchange Offer,
to furnish to Southern, Capital and the Trust (or an agent thereof) in writing
information as to the number of "beneficial owners" (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) on behalf of whom such holder holds the Original Capital
Securities to be exchanged in the Exchange Offer. Each broker-dealer that
receives Exchange Capital Securities for its own account pursuant to the
Exchange Offer must acknowledge that it acquired the Original Capital
Securities for its own account as the result of market-making activities or
other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale
of such Exchange Capital Securities. The Letter of Transmittal states that by
so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. Based on the position taken by the staff of the Division of
Corporation Finance of the Commission in the interpretive letters referred to
above, Southern, Capital and the Trust believe that broker-dealers who
acquired Original Capital Securities for their own accounts, as a result of
market-making activities or other trading activities ("Participating Broker-
Dealers"), may fulfill their prospectus delivery requirements with respect to
the Exchange Capital Securities received upon exchange of such Original
Capital Securities (other than Original Capital Securities which represent an
unsold allotment from the initial sale of the Original Capital Securities)
with a prospectus meeting the requirements of the Securities Act, which may be
the prospectus prepared for an exchange offer so long as it contains a
description of the plan of distribution with respect to the resale of such
Exchange Capital Securities. Accordingly, this Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer
during the period referred to below in connection with resales of Exchange
Capital Securities received in exchange for Original Capital Securities
acquired by such broker-dealer as a result of market-making activities or
other trading activities. Southern, Capital and the Trust and have agreed
that, for a period not exceeding 90 days after the Expiration Date (as defined
herein), they will make this Prospectus available to any broker-dealer for use
in connection with any such resale. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of Exchange Capital Securities received in exchange for
Original Capital Securities pursuant to the Exchange Offer must notify
Southern, Capital or the Trust, or cause Southern, Capital or the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that
4
<PAGE>
purpose in the Letter of Transmittal or may be delivered to the Exchange Agent
at one of the addresses set forth herein under "The Exchange Offer--Exchange
Agent." Any Participating Broker-Dealer who is an "affiliate" of Southern,
Capital or the Trust may not rely on such interpretive letters and must comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with any resale transaction. See "The Exchange Offer--
Resales of Exchange Capital Securities."
In that regard, each Participating Broker-Dealer who surrenders Original
Capital Securities pursuant to the Exchange Offer will be deemed to have
agreed, by execution of the Letter of Transmittal or delivery of an Agent's
Message (as defined herein), that upon receipt of notice from Southern,
Capital or the Trust of the occurrence of any event or the discovery of any
fact which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or which causes this Prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain
other events specified in the Registration Rights Agreement, such
Participating Broker-Dealer will suspend the sale of Exchange Capital
Securities (or the Exchange Capital Securities Guarantee, the Exchange Notes
Guarantee or the Exchange Junior Subordinated Notes, as applicable) pursuant
to this Prospectus until Southern, Capital or the Trust has amended or
supplemented this Prospectus to correct such misstatement or omission and has
furnished copies of the amended or supplemented Prospectus to such
Participating Broker-Dealer, or Southern, Capital or the Trust has given
notice that the sale of the Exchange Capital Securities (or the Exchange
Capital Securities Guarantee, Exchange Notes Guarantee or the Exchange Junior
Subordinated Notes, as applicable) may be resumed, as the case may be. If
Southern, Capital or the Trust gives such notice to suspend the sale of the
Exchange Capital Securities (or the Exchange Capital Securities Guarantee,
Exchange Notes Guarantee or the Exchange Junior Subordinated Notes, as
applicable), it shall extend the 90-day period referred to above during which
Participating Broker-Dealers are entitled to use this Prospectus in connection
with the resale of Exchange Capital Securities by the number of days during
the period from and including the date of the giving of such notice to and
including the date when Participating Broker-Dealers shall have received
copies of the amended or supplemented Prospectus necessary to permit resales
of the Exchange Capital Securities or to and including the date on which
Southern, Capital or the Trust has given notice that the sale of Exchange
Capital Securities (or the Exchange Capital Securities Guarantee, Exchange
Notes Guarantee or the Exchange Junior Subordinated Notes, as applicable) may
be resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Original Capital Securities. The Exchange Capital
Securities will be a new issue of securities for which there currently is no
market. Although Lehman Brothers Inc., Goldman, Sachs & Co., Merrill, Lynch,
Pierce, Fenner & Smith Incorporated, Salomon Brothers Inc and J.P. Morgan
Securities Inc., the initial purchasers of the Original Capital Securities
(the "Initial Purchasers"), have informed Southern, Capital and the Trust that
they each currently intend to make a market in the Exchange Capital
Securities, they are not obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly, there can be no
assurance as to the development or liquidity of any market for the Exchange
Capital Securities. Southern, Capital and the Trust currently do not intend to
apply for listing of the Exchange Capital Securities on any securities
exchange or for quotation through the NASD Automated Quotation System.
Any Original Capital Securities not tendered and accepted in the Exchange
Offer will remain outstanding and will be entitled to all the same rights and
will be subject to the same limitations applicable thereto under the Trust
Agreement (except for those rights which terminate upon consummation of the
Exchange Offer). Following consummation of the Exchange Offer, the holders of
Original Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither Southern, Capital nor the Trust
will have any further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the Securities Act of
the Original Capital Securities held by them. To the extent that Original
Capital Securities are tendered and accepted in the Exchange Offer, a holder's
ability to sell untendered Original Capital Securities could be adversely
affected. See "Risk Factors--Consequences of a Failure to Exchange Original
Capital Securities."
5
<PAGE>
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF ORIGINAL CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR ORIGINAL CAPITAL SECURITIES PURSUANT TO THE EXCHANGE
OFFER.
Original Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on September 3, 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is extended
by Southern, Capital or the Trust (in which case the term "Expiration Date"
shall mean the latest date and time to which the Exchange Offer is extended).
Tenders of Original Capital Securities may be withdrawn at any time on or prior
to the Expiration Date. The Exchange Offer is not conditioned upon any minimum
liquidation amount of Original Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain events and conditions which
may be waived by Southern, Capital or the Trust and to the terms and provisions
of the Registration Rights Agreement. Original Capital Securities may be
tendered in whole or in part having an aggregate liquidation amount of not less
than $100,000 (100 Original Capital Securities) or any integral multiple of
$1,000 liquidation amount (one Original Capital Security) in excess thereof.
Southern has agreed to pay all expenses of the Exchange Offer. See "The Exchange
Offer--Fees and Expenses." Holders of the Original Capital Securities whose
Original Capital Securities are accepted for exchange will be deemed to have
waived the right to receive any distributions on such Original Capital
Securities accumulated from and after August 1, 1997. Accordingly, holders of
Exchange Capital Securities as of the record date for the payment of
distributions on February 1, 1998 will be entitled to receive distributions
accumulated from and after August 1, 1997. See "The Exchange Offer--
Distributions on Exchange Capital Securities."
Neither Southern, Capital nor the Trust will receive any cash proceeds from
the issuance of the Exchange Capital Securities offered hereby. No dealer-
manager is being used in connection with this Exchange Offer. See "Use of
Proceeds" and "Plan of Distribution."
----------------
As used herein, as the context may require, (i) "Capital Securities" and
"Trust Securities" include the Original Capital Securities and the Exchange
Capital Securities, (ii) "Junior Subordinated Notes" includes the Original
Junior Subordinated Notes and the Exchange Junior Subordinated Notes, (iii)
"Capital Securities Guarantee" includes the Original Capital Securities
Guarantee and the Exchange Capital Securities Guarantee and (iv) "Notes
Guarantee" includes the Original Notes Guarantee and the Exchange Notes
Guarantee.
6
<PAGE>
AVAILABLE INFORMATION
Southern is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the Commission's regional offices at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material may also be
obtained at prescribed rates by writing to the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission
maintains a Web site that contains reports, proxy and information statements
and other information regarding registrants including Southern that file
electronically at http://www.sec.gov. In addition, reports and other material
concerning Southern may be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, on which Exchange the
common stock of Southern is listed.
No separate financial statements of Capital or the Trust have been included
herein. Southern, Capital and the Trust do not consider that such financial
statements would be material to holders of the Capital Securities because each
of Capital and the Trust is a special purpose entity, has no significant
operating history or independent operations and is not engaged in and does not
propose to engage in any activity other than, in the case of Capital,
obtaining financing for Southern and direct and indirect subsidiaries of
Southern other than the operating affiliates (as defined herein) and, in the
case of the Trust, holding as trust assets the Junior Subordinated Notes,
issuing the Trust Securities and engaging in other activities as are
necessary, advisable or incidental thereto. See "Southern Company Capital
Funding, Inc.," "Southern Company Capital Trust I," "Description of the
Exchange Capital Securities," "Description of the Exchange Junior Subordinated
Notes," "Description of the Exchange Notes Guarantee," and "Description of the
Exchange Capital Securities Guarantee." In addition, Southern does not expect
that Capital or the Trust will file reports, proxy statements and other
information under the Exchange Act with the Commission.
This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by Southern, Capital and the Trust with
the Commission under the Securities Act. This Prospectus does not contain all
the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission, and reference is hereby made to the Registration Statement and to
the exhibits relating thereto for further information with respect to
Southern, Capital, the Trust and the Exchange Securities. Any statements
contained herein concerning the provisions of any document are not necessarily
complete, and, in each instance, reference is made to the copy of such
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by Southern with the Commission
pursuant to the Exchange Act and are incorporated herein by reference and made
a part of this Prospectus:
(a)Southern's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(b)Southern's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997; and
(c)Southern's Current Reports on Form 8-K dated February 12, 1997, June 5,
1997 and July 2, 1997.
All documents filed by Southern with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated herein by reference and made a part of this Prospectus from the
respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that
7
<PAGE>
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
SOUTHERN WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROSPECTUS
IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY
OR ALL DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN THE EXHIBITS TO
SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE). SUCH REQUESTS SHOULD BE DIRECTED TO TOMMY CHISHOLM, SECRETARY, THE
SOUTHERN COMPANY, 270 PEACHTREE STREET, N.W., ATLANTA, GEORGIA 30303,
TELEPHONE: (770) 393-0650.
8
<PAGE>
SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information contained elsewhere in this
Prospectus or incorporated herein by reference.
THE SOUTHERN COMPANY
Southern was incorporated under the laws of Delaware on November 9, 1945.
Southern is domesticated under the laws of Georgia and is qualified to do
business as a foreign corporation under the laws of Alabama. The principal
executive offices of Southern are located at 270 Peachtree Street, N.W.,
Atlanta, Georgia 30303, and the telephone number is (770) 393-0650.
Southern owns all the outstanding common stock of Alabama Power Company
("ALABAMA"), Georgia Power Company ("GEORGIA"), Gulf Power Company ("GULF"),
Mississippi Power Company ("MISSISSIPPI") and Savannah Electric and Power
Company ("SAVANNAH") (ALABAMA, GEORGIA, GULF, MISSISSIPPI and SAVANNAH being
collectively referred to herein as the "operating affiliates"), each of which
is an operating public utility company, and of Southern Company Services, Inc.
(the system service company). ALABAMA and GEORGIA each owns 50% of the
outstanding common stock of Southern Electric Generating Company ("SEGCO"). The
operating affiliates supply electric service in the states of Alabama, Georgia,
Florida, Mississippi and Georgia, respectively, and SEGCO owns generating units
at a large electric generating station which supplies power to ALABAMA and
GEORGIA. Southern also owns all the outstanding common stock of Southern
Energy, Inc. ("Southern Energy"), The Southern Development and Investment
Group, Inc. ("Southern Development"), Southern Nuclear Operating Company, Inc.
("Southern Nuclear") and Southern Communications Services, Inc. ("Southern
Communications"). Southern Energy designs, builds, owns and operates power
production and delivery facilities and provides a broad range of technical
services to industrial companies and utilities in the United States and a
number of international markets. Southern Development explores, develops and
markets energy management services and other business lines relating to
Southern's core business of generating and distributing energy. Southern
Nuclear provides services to the Southern electric system's nuclear plants.
Southern Communications provides digital wireless communications services to
the operating affiliates and regional non-affiliates.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
TWELVE
MONTHS
ENDED
JUNE 30,
1997(1)
1992 1993 1994(1) 1995(1) 1996(1) (UNAUDITED)
------ ------ ------ ------- ------- -----------
(MILLIONS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues....... $8,073 $8,489 $8,297 $9,180 $10,358 $10,667
Income Before Interest
Charges.................. $1,793 $1,827 $1,756 $1,900 $ 1,944 $ 1,927
Consolidated Net Income.. $ 953 $1,002 $ 989 $1,103 $ 1,127 $ 1,009
Earnings per Share of
Common Stock............. $ 1.51 $ 1.57 $ 1.52 $ 1.66 $ 1.68 $ 1.49
Dividends Paid per Share
of Common Stock.......... $ 1.10 $ 1.14 $ 1.18 $ 1.22 $ 1.26 $ 1.28
Ratio of Earnings to
Fixed Charges (2)........ 3.23 3.41 3.63 3.75 3.68 3.21
Ratio of Earnings to
Fixed Charges Plus
Preferred Dividend
Requirements
(Pre-Income Tax Basis)
(3)..................... 2.66 2.84 3.01 3.13 3.12 2.82
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
CAPITALIZATION AS OF
MARCH 31, 1997
------------------------
ACTUAL AS ADJUSTED(4)
------- ----------------
(MILLIONS, EXCEPT
PERCENTAGES)
<S> <C> <C> <C>
Common Stock Equity.................................. $ 9,262 $ 9,262 43.4%
Preferred Stock of Subsidiaries...................... 833 833 3.9
Subsidiary Obligated Mandatorily Redeemable Capital
and Preferred Securities............................ 1,354 1,554 7.3
Long-Term Debt....................................... 9,700 9,700 45.4
------- -------- ------
Total, excluding amounts due within one year of $583
million............................................. $21,149 $ 21,349 100.0%
======= ======== ======
</TABLE>
- --------
(1) "Income Before Interest Charges" and "Consolidated Net Income" for the
years ended December 31, 1994, 1995 and 1996 and the twelve months ended
June 30, 1997 reflect charges of approximately $61,000,000, $17,000,000,
$53,000,000 and $39,000,000, respectively, after taxes relating to benefits
provided pursuant to work force reduction programs.
(2) This ratio is computed as follows: (i) "Earnings" have been calculated by
adding to "Income Before Interest Charges" all income taxes deducted
therefrom and the debt portion of allowance for funds used during
construction; and (ii) "Fixed Charges" consist of "Net Interest Charges"
plus the debt portion of allowance for funds used during construction.
(3) In computing this ratio, "Preferred Dividend Requirements" represent the
before-tax earnings necessary to pay such dividends, computed at the
effective tax rates for the applicable periods.
(4) Reflects the issuance in June 1997 by Southern Company Capital Trust III, a
statutory business trust created solely for the purpose of holding
Capital's Series C Junior Subordinated Notes and issuing Preferred
Securities and Common Securities, of $200,000,000 aggregate liquidation
amount of its 7.75% Cumulative Quarterly Income Preferred Securities for
the benefit of Southern.
10
<PAGE>
SOUTHERN COMPANY CAPITAL FUNDING, INC.
Capital was established to obtain financing for Southern and direct and
indirect subsidiaries of Southern other than the operating affiliates. Capital
does not and will not engage in business activities other than such financing.
Capital was incorporated under the laws of Delaware on January 24, 1997 and
is a wholly-owned subsidiary of SEI Holdings, Inc., which itself is a wholly-
owned subsidiary of Southern. The principal executive offices of Capital are
located at 270 Peachtree Street, N.W., Atlanta, Georgia 30303, and the
telephone number is (770) 393-0650.
[CHART SHOWING ORIGINAL SECURITIES OFFERING APPEARS HERE]
11
<PAGE>
THE EXCHANGE OFFER
The Exchange Offer.......... Up to $325,000,000 aggregate liquidation amount
of Exchange Capital Securities are being offered
in exchange for a like aggregate liquidation
amount of Original Capital Securities. Original
Capital Securities may be tendered for exchange
in whole or in part in a liquidation amount of
$100,000 (100 Original Capital Securities) or any
integral multiple of $1,000 (one Original Capital
Security) in excess thereof. Southern, Capital
and the Trust are making the Exchange Offer in
order to satisfy their obligations under the Reg-
istration Rights Agreement relating to the Origi-
nal Capital Securities. For a description of
the procedures for tendering Original Capital Se-
curities, see "The Exchange Offer--Procedures
for Tendering Original Capital Securities."
Expiration Date............. 5:00 p.m., New York City time, on September 3,
1997, unless the Exchange Offer is extended by
Southern, Capital or the Trust (in which case the
Expiration Date will be the latest date and time
to which the Exchange Offer is extended). See
"The Exchange Offer--Terms of the Exchange Of-
fer."
Conditions to the Exchange
Offer...................... The Exchange Offer is subject to certain condi-
tions, which may be waived by Southern, Capital
and the Trust in their sole discretion. The Ex-
change Offer is not conditioned upon any minimum
liquidation amount of Original Capital Securities
being tendered. See "The Exchange Offer--Condi-
tions to the Exchange Offer." Southern, Capital
and the Trust reserve the right in their sole and
absolute discretion, subject to applicable law,
at any time and from time to time, (i) to delay
the acceptance of the Original Capital Securities
for exchange, (ii) to terminate the Exchange Of-
fer if certain specified conditions have not been
satisfied, (iii) to extend the Expiration Date of
the Exchange Offer and retain all Original Capi-
tal Securities tendered pursuant to the Exchange
Offer, subject, however, to the right of holders
of Original Capital Securities to withdraw their
tendered Original Capital Securities, or (iv) to
waive any condition or otherwise amend the terms
of the Exchange Offer in any respect. See "The
Exchange Offer--Terms of the Exchange Offer."
Withdrawal Rights........... Tenders of Original Capital Securities may be
withdrawn at any time on or prior to the Expira-
tion Date by delivering a written notice of such
withdrawal to the Exchange Agent in conformity
with certain procedures set forth below under
"The Exchange Offer--Withdrawal Rights."
Procedures for Tendering
Original Capital
Securities................. Tendering holders of Original Capital Securities
must complete and sign a Letter of Transmittal in
accordance with the instructions contained
therein and forward the same by mail, facsimile
or hand delivery, together with any other re-
quired documents, to the Exchange Agent, either
with the Original Capital Securities to be ten-
dered or in compliance with the specified proce-
dures for guaranteed delivery
12
<PAGE>
of Original Capital Securities. Certain brokers,
dealers, commercial banks, trust companies and
other nominees may also effect tenders by book-
entry transfer. Holders of Original Capital Secu-
rities registered in the name of a broker, deal-
er, commercial bank, trust company or other nomi-
nee are urged to contact such person promptly if
they wish to tender Original Capital Securities
pursuant to the Exchange Offer. See "The Exchange
Offer--Procedures for Tendering Original Capital
Securities."
Letters of Transmittal and certificates repre-
senting Original Capital Securities should not be
sent to Southern, Capital or the Trust. Such doc-
uments should only be sent to the Exchange Agent.
Resales of Exchange Capital
Securities................. Southern, Capital and the Trust are making the
Exchange Offer in reliance on the position of the
staff of the Division of Corporation Finance of
the Commission as set forth in certain
interpretive letters addressed to third parties
in other transactions. However, neither Southern,
Capital nor the Trust has sought its own
interpretive letter and there can be no assurance
that the staff of the Division of Corporation Fi-
nance of the Commission would make a similar de-
termination with respect to the Exchange Offer as
it has in such interpretive letters to third par-
ties. Based on these interpretations by the staff
of the Division of Corporation Finance of the
Commission, and subject to the two immediately
following sentences, Southern, Capital and the
Trust believe that Exchange Capital Securities
issued pursuant to this Exchange Offer in ex-
change for Original Capital Securities may be of-
fered for resale, resold and otherwise trans-
ferred by a holder thereof (other than a holder
who is a broker-dealer) without further compli-
ance with the registration and prospectus deliv-
ery requirements of the Securities Act, provided
that such Exchange Capital Securities are ac-
quired in the ordinary course of such holder's
business and that such holder is not participat-
ing, and has no arrangement or understanding with
any person to participate, in a distribution
(within the meaning of the Securities Act) of
such Exchange Capital Securities. However, any
holder of Original Capital Securities who is an
"affiliate" of Southern, Capital or the Trust or
who intends to participate in the Exchange Offer
for the purpose of distributing the Exchange Cap-
ital Securities, or any broker-dealer who pur-
chased the Original Capital Securities from the
Trust to resell pursuant to Rule 144A or any
other available exemption under the Securities
Act, (a) will not be able to rely on the inter-
pretations of the staff of the Division of Corpo-
ration Finance of the Commission set forth in the
above-mentioned interpretive letters, (b) will
not be permitted or entitled to tender such Orig-
inal Capital Securities in the Exchange Offer and
(c) must comply with the registration and pro-
spectus delivery requirements of the Securities
Act in connection with any sale or other transfer
of such Original Capital Securities unless such
sale is made pursuant to an exemption from such
requirements. In addition, as described below, if
any broker-dealer
13
<PAGE>
holds Original Capital Securities acquired for
its own account as a result of market-making or
other trading activities and exchanges such Orig-
inal Capital Securities for Exchange Capital Se-
curities, then such broker-dealer must deliver a
prospectus meeting the requirements of the Secu-
rities Act in connection with any resales of such
Exchange Capital Securities.
Each holder of Original Capital Securities who
wishes to exchange Original Capital Securities
for Exchange Capital Securities in the Exchange
Offer will be required to represent that (i) it
is not an "affiliate" of Southern, Capital or the
Trust, (ii) any Exchange Capital Securities to be
received by it are being acquired in the ordinary
course of its business, (iii) it has no arrange-
ment or understanding with any person to partici-
pate in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securi-
ties, and (iv) if such holder is not a broker-
dealer, such holder is not engaged in, and does
not intend to engage in, a distribution (within
the meaning of the Securities Act) of such Ex-
change Capital Securities. Each broker-dealer
that receives Exchange Capital Securities for its
own account in exchange for Original Capital Se-
curities must acknowledge that such Original Cap-
ital Securities were acquired by such broker-
dealer as a result of market-making activities or
other trading activities and must agree that it
will deliver a prospectus in connection with any
resale of such Exchange Capital Securities. See
"Plan of Distribution." The Letter of Transmittal
states that, by so acknowledging and by deliver-
ing a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. Based
on the position taken by the staff of the Divi-
sion of Corporation Finance of the Commission in
the interpretive letters referred to above,
Southern, Capital and the Trust believe that Par-
ticipating Broker-Dealers who acquired Original
Capital Securities for their own accounts as a
result of market-making activities or other trad-
ing activities may fulfill their prospectus de-
livery requirements with respect to the Exchange
Capital Securities received upon exchange of such
Original Capital Securities (other than Original
Capital Securities which represent an unsold al-
lotment from the initial sale of the Original
Capital Securities) with a prospectus meeting the
requirements of the Securities Act, which may be
the prospectus prepared for an exchange offer so
long as it contains a description of the plan of
distribution with respect to the resale of such
Exchange Capital Securities. Accordingly, this
Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating
Broker-Dealer in connection with resales of Ex-
change Capital Securities received in exchange
for Original Capital Securities where such Origi-
nal Capital Securities were acquired by such Par-
ticipating Broker-Dealer for its own account as a
result of market-making or other trading activi-
ties. Subject to certain provisions set forth in
the Registration Rights Agreement and to the lim-
itations described below under "The Exchange Of-
fer--Resales of Exchange Capital Securities,"
Southern, Capital
14
<PAGE>
and the Trust have agreed that this Prospectus,
as it may be amended or supplemented from time to
time, may be used by a Participating Broker-
Dealer in connection with resales of such Ex-
change Capital Securities for a period not ex-
ceeding 90 days after the Expiration Date (sub-
ject to extension under certain limited
circumstances). See "Plan of Distribution." Any
Participating Broker-Dealer who is an "affiliate"
of Southern, Capital or the Trust may not rely on
such interpretive letters and must comply with
the registration and prospectus delivery require-
ments of the Securities Act in connection with
any resale transaction. See "The Exchange Offer--
Resales of Exchange Capital Securities."
Exchange Agent.............. The exchange agent with respect to the Exchange
Offer is Bankers Trust Company (the "Exchange
Agent"). The addresses, and telephone and facsim-
ile numbers, of the Exchange Agent are set forth
in "The Exchange Offer--Exchange Agent" and in
the Letter of Transmittal.
Use of Proceeds............. Neither Southern, Capital nor the Trust will re-
ceive any cash proceeds from the issuance of the
Exchange Capital Securities offered hereby. See
"Use of Proceeds."
Certain United States
Federal Income Tax
Consequences; ERISA
Considerations............. Holders of Original Capital Securities should re-
view the information set forth under "Certain
Federal Income Tax Considerations" and "Certain
ERISA Considerations" prior to tendering Original
Capital Securities in the Exchange Offer.
15
<PAGE>
THE EXCHANGE CAPITAL SECURITIES
Securities Offered.......... Up to $325,000,000 aggregate liquidation amount
of the Trust's Exchange Capital Securities which
have been registered under the Securities Act
(liquidation amount $1,000 per Exchange Capital
Security). The Exchange Capital Securities will
be issued and the Original Capital Securities
were issued under the Trust Agreement. The Ex-
change Capital Securities and any Original Capi-
tal Securities which remain outstanding after
consummation of the Exchange Offer will vote to-
gether as a single class for purposes of deter-
mining whether holders of the requisite percent-
age in outstanding liquidation amount thereof
have taken certain actions or exercised certain
rights under the Trust Agreement. See "Descrip-
tion of the Exchange Capital Securities--Voting
Rights; Amendment of the Trust Agreement." The
terms of the Exchange Capital Securities are
identical in all material respects to the terms
of the Original Capital Securities, except that
the Exchange Capital Securities have been regis-
tered under the Securities Act and will not be
subject to certain restrictions on transfer ap-
plicable to the Original Capital Securities and
will not provide for any increase in the distri-
bution rate thereon. See "The Exchange Offer--
Purpose of the Exchange Offer," "Description of
the Exchange Capital Securities" and "Description
of the Original Securities."
Distribution Dates.......... February 1 and August 1 of each year, commencing
August 1, 1997.
Extension Periods........... Distributions on Capital Securities will be de-
ferred for the duration of any Extension Period
elected by Capital with respect to the payment of
interest on the Junior Subordinated Notes. No Ex-
tension Period will exceed 10 consecutive semi-
annual periods or extend beyond the stated matu-
rity date of the Junior Subordinated Notes. See
"Description of the Exchange Junior Subordinated
Notes--Option to Extend Interest Payment Period"
and "Certain Federal Income Tax Considerations--
Original Issue Discount."
Ranking..................... The Exchange Capital Securities will rank pari
passu, and payments thereon will be made pro ra-
ta, with the Original Capital Securities and the
Common Securities except as described under "De-
scription of the Exchange Capital Securities."
The Exchange Junior Subordinated Notes will con-
stitute unsecured obligations of Capital and will
rank junior in right of payment to all Senior In-
debtedness of Capital to the extent and in the
manner set forth in the Subordinated Note Inden-
ture. See "Description of the Exchange Junior
Subordinated Notes--Subordination." Southern's
obligation under the Exchange Capital Securities
Guarantee to make any Guarantee Payments (as de-
fined herein) will rank pari passu with the Orig-
inal Capital Securities Guarantee and will con-
stitute an unsecured obligation of Southern and
will rank subordinate and junior in right of pay-
ment to all other liabilities of Southern, except
for liabilities made pari passu or subordinate by
their terms. See "Description of the Exchange
Capital Securities Guarantee--Subordination." The
16
<PAGE>
Exchange Notes Guarantee will rank pari passu
with the Original Notes Guarantee and will con-
stitute an unsecured obligation of Southern and
will rank subordinate and junior to all Senior
Indebtedness of Southern. See "Description of the
Exchange Notes Guarantee."
Redemption.................. The Capital Securities are subject to mandatory
redemption upon repayment of the Junior Subordi-
nated Notes at maturity or their earlier redemp-
tion. The Junior Subordinated Notes are redeem-
able by Capital in whole or in part at any time
on or after February 1, 2007, or at any time in
whole upon the occurrence of a Special Event, in
each case at the applicable Redemption Price.
Upon the occurrence of a Special Event, Capital
will have the option to redeem the Junior Subor-
dinated Notes (and thus cause the redemption of
the Trust Securities), in whole, or distribute
the Junior Subordinated Notes pro rata to the
holders of the Trust Securities. See "Description
of the Exchange Capital Securities--Redemption"
and "--Special Event Redemption or Distribution."
Transfer Restrictions....... The Exchange Capital Securities will be issued,
and may be transferred, only in minimum denomina-
tions of not less than $1,000. See "Description
of the Exchange Capital Securities--Restrictions
on Transfer." Any such transfer of Exchange Capi-
tal Securities in denominations of less than
$1,000 shall be deemed to be void and of no legal
effect whatsoever.
ERISA Considerations........ Prospective purchasers must carefully consider
the restrictions on purchases set forth under
"Certain ERISA Considerations."
Absence of Market for the
Capital Securities......... The Exchange Capital Securities will be a new is-
sue of securities for which there currently is no
market. Although the Initial Purchasers have in-
formed Southern, Capital and the Trust that they
each currently intend to make a market in the Ex-
change Capital Securities, the Initial Purchasers
are not obligated to do so, and any such market
making may be discontinued at any time without
notice. Accordingly, there can be no assurance as
to the development or liquidity of any market for
the Exchange Capital Securities. If an active
market does not develop, the market price and li-
quidity of the Exchange Capital Securities may be
adversely affected. Southern, Capital and the
Trust do not intend to apply for listing of the
Exchange Capital Securities on any securities ex-
change or for quotation through the NASD Auto-
mated Quotation System. See "Plan of Distribu-
tion."
Risk Factors................ Prospective investors should carefully consider
the matters set forth under "Risk Factors."
17
<PAGE>
RISK FACTORS
Prospective investors should carefully review the information contained
elsewhere in this Prospectus and should consider particularly the following
matters in connection with the Exchange Offer and the Exchange Capital
Securities offered hereby:
CONSEQUENCES OF A FAILURE TO EXCHANGE ORIGINAL CAPITAL SECURITIES
The Original Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws,
or pursuant to an exemption therefrom or in a transaction not subject thereto,
and in each case in compliance with certain other conditions and restrictions.
Original Capital Securities which remain outstanding after consummation of the
Exchange Offer will continue to bear a legend reflecting such restrictions on
transfer. In addition, upon consummation of the Exchange Offer, holders of
Original Capital Securities which remain outstanding will not be entitled to
any rights to have such Original Capital Securities registered under the
Securities Act or to any similar rights under the Registration Rights
Agreement (subject to certain limited exceptions). Southern, Capital and the
Trust do not intend to register under the Securities Act any Original Capital
Securities which remain outstanding after consummation of the Exchange Offer
(subject to such limited exceptions, if applicable). To the extent that
Original Capital Securities are tendered and accepted in the Exchange Offer, a
holder's ability to sell untendered Original Capital Securities could be
adversely affected.
The Exchange Capital Securities and any Original Capital Securities which
remain outstanding after consummation of the Exchange Offer will vote together
as a single class for purposes of determining whether holders of the requisite
percentage in outstanding liquidation amount thereof have taken certain
actions or exercised certain rights under the Trust Agreement. See
"Description of the Exchange Capital Securities--Voting Rights; Amendment of
the Trust Agreement."
The Original Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed
and declared effective within certain specified periods, the distribution rate
borne by the Original Capital Securities will increase by 0.25% per annum
until such registration statement has been filed or declared effective, as the
case may be. Upon consummation of the Exchange Offer, holders of Original
Capital Securities will not be entitled to any increase in the distribution
rate thereon or any further registration rights under the Registration Rights
Agreement, except under limited circumstances. See "Description of the
Original Securities."
EXCHANGE OFFER PROCEDURES
Issuance of the Exchange Capital Securities in exchange for Original Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Exchange Agent of such Original Capital Securities, a properly
completed and duly executed Letter of Transmittal or Agent's Message in lieu
thereof and all other required documents. Therefore, holders of the Original
Capital Securities desiring to tender such Original Capital Securities in
exchange for Exchange Capital Securities should allow sufficient time to
ensure timely delivery. Neither Southern, Capital nor the Trust is under any
duty to give notification of defects or irregularities with respect to the
tenders of Original Capital Securities for exchange.
RANKING OF AND RIGHTS UNDER THE JUNIOR SUBORDINATED NOTES AND THE NOTES
GUARANTEE
No amounts will be available to make payments on the Capital Securities
except from payments made on the Junior Subordinated Notes. The obligations of
Capital under the Junior Subordinated Notes are subordinate and junior in
right of payment to all Senior Indebtedness of Capital whenever incurred.
Capital currently has no Senior Indebtedness outstanding. The obligations of
Southern under the Notes Guarantee will be subordinate and junior to all
present and future Senior Indebtedness of Southern. At March 31, 1997, Senior
Indebtedness of
18
<PAGE>
Southern aggregated approximately $794,000,000. There are no terms in the
Capital Securities, the Junior Subordinated Notes, the Capital Securities
Guarantee or the Notes Guarantee that limit Southern's or Capital's ability to
incur additional indebtedness, including indebtedness that ranks senior to the
Junior Subordinated Notes or the Notes Guarantee. See "Description of the
Exchange Capital Securities Guarantee," "Description of the Exchange Junior
Subordinated Notes--Subordination" and "Description of the Exchange Notes
Guarantee."
RANKING OF AND RIGHTS UNDER THE CAPITAL SECURITIES GUARANTEE
Southern's obligations under the Capital Securities Guarantee are
subordinate and junior in right of payment to all liabilities of Southern and
will be pari passu with the most senior preferred stock which may be issued by
Southern. If Capital were to default in its obligation to pay amounts payable
on the Junior Subordinated Notes, the Trust would lack available funds for the
payment of distributions or amounts payable on redemption of the Capital
Securities or otherwise, and in such event holders of the Capital Securities
would not be able to rely upon the Capital Securities Guarantee for payment of
such amounts.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Capital has the right under the Subordinated Note Indenture, and at any
time, and from time to time, to defer payments of interest on the Junior
Subordinated Notes for a period of up to 10 consecutive semi-annual periods
(each, an "Extension Period"), but not beyond the maturity of the Junior
Subordinated Notes. Prior to the termination of any Extension Period, Capital
may further defer payments of interest, provided that such Extension Period,
together with all such previous and further extensions thereof, may not exceed
10 consecutive semi-annual periods. Upon the termination of any Extension
Period and the payment of all amounts then due, Capital may select a new
Extension Period, subject to the above requirements. There could be multiple
Extension Periods of varying lengths throughout the term of the Junior
Subordinated Notes. Deferred installments of interest on the Junior
Subordinated Notes will bear interest, compounded semi-annually, at a rate per
annum equal to the Securities Rate to the extent permitted by applicable law.
The payment of such deferred interest, together with interest thereon, will be
passed through to the holders of the Capital Securities as received at the end
of any Extension Period.
The only restrictions on Capital's ability to defer payments of interest are
that during any Extension Period neither Southern nor Capital may, subject to
certain exceptions described herein, (i) pay dividends on or redeem any of its
capital stock or (ii) pay principal or interest on any debt securities ranking
pari passu with or subordinate to the Junior Subordinated Notes or the Notes
Guarantee. See "Description of the Exchange Capital Securities--Distributions"
and "Description of the Exchange Junior Subordinated Notes--Option to Extend
Interest Payment Period."
Should Capital exercise its rights to defer payments of interest, each
holder of Capital Securities will be required to include income in the form of
OID in its gross income for United States federal income tax purposes in
respect of the deferred interest allocable to its Capital Securities. As a
result, holders of Capital Securities will recognize income for United States
federal income tax purposes in advance of the receipt of cash and will not
receive the cash from the Trust related to such income if such holders dispose
of their Capital Securities prior to the record date for the date on which
distributions of such amounts are made. See "Certain Federal Income Tax
Considerations -- Original Issue Discount" and "-- Sale of Capital
Securities." INVESTORS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE CAPITAL SECURITIES.
Capital has no current intention of exercising its right to defer payments
of interest by extending the interest payment period on the Junior
Subordinated Notes. However, should Capital determine to exercise such right
in the future, the market price of the Capital Securities is likely to be
affected. A holder that disposes of its Capital Securities during an Extension
Period, therefore, might not receive the same return on its investment as a
holder that continues to hold its Capital Securities. In addition, as a result
of the existence of Capital's right to defer interest payments, the market
price of the Capital Securities (which represent an undivided beneficial
interest in the Junior Subordinated Notes) may be more volatile than other
similar securities that do not have such rights.
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SPECIAL EVENT REDEMPTION OR DISTRIBUTION
If a Special Event shall occur and be continuing, Capital will have the
option either to redeem the Junior Subordinated Notes in cash (with the result
that the Capital Securities shall be redeemed) or cause the termination of the
Trust, with the result that Junior Subordinated Notes with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Securities Rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Trust Securities
will be distributed to the holders of the Trust Securities, in liquidation of
such holders' interest in the Trust on a pro rata basis, within 90 days
following the occurrence of such Special Event. See "Description of the
Exchange Capital Securities--Special Event Redemption or Distribution."
There can be no assurance as to the market price for the Junior Subordinated
Notes that may be distributed in exchange for Capital Securities if a
termination or liquidation of the Trust were to occur. Accordingly, the Junior
Subordinated Notes that the investor may receive on termination and
liquidation of the Trust may trade at a discount to the price that the
investor paid to purchase the Capital Securities offered hereby. See
"Description of the Exchange Junior Subordinated Notes."
CONDITIONAL RIGHT TO ADVANCE MATURITY
If a Tax Event occurs, Capital has the right under certain conditions to
advance the maturity date of the Junior Subordinated Notes. See "Description
of the Exchange Junior Subordinated Notes--Conditional Right to Advance
Maturity."
LIMITED VOTING RIGHTS
Holders of Capital Securities will have limited voting rights and, except
for the rights of holders of Capital Securities to appoint a Substitute
Property Trustee upon the occurrence of certain events described herein, will
not be entitled to vote to appoint, remove or replace the Securities Trustees,
which voting rights are vested exclusively in the holder of the Common
Securities.
LACK OF ESTABLISHED TRADING MARKET FOR EXCHANGE CAPITAL SECURITIES
The Original Capital Securities were issued to, and Southern believes such
securities are currently owned by, a relatively small number of beneficial
owners. The Original Capital Securities have not been registered under the
Securities Act and will be subject to restrictions on transferability if they
are not exchanged for the Exchange Capital Securities. Although the Exchange
Capital Securities may be resold or otherwise transferred by the holders (who
are not affiliates of Southern, Capital or the Trust) without compliance with
the registration requirements under the Securities Act, they will constitute a
new issue of securities with no established trading market. Original Capital
Securities may be transferred by the holders thereof only in blocks having a
liquidation amount of not less than $100,000 (100 Original Capital
Securities). Southern, Capital and the Trust have been advised by the Initial
Purchasers that the Initial Purchasers presently intend to make a market in
the Exchange Capital Securities. However, the Initial Purchasers are not
obligated to do so and any market- making activity with respect to the
Exchange Capital Securities may be discontinued at any time without notice. In
addition, such market-making activity will be subject to the limits imposed by
the Securities Act and the Exchange Act and may be limited during the Exchange
Offer. Accordingly, no assurance can be given that an active public or other
market will develop for the Exchange Capital Securities or the Original
Capital Securities, or as to the liquidity of or the trading market for the
Exchange Capital Securities or the Original Capital Securities. If an active
public market does not develop, the market price and liquidity of the Exchange
Capital Securities may be adversely affected.
If a public trading market develops for the Exchange Capital Securities,
future trading prices will depend on many factors, including, among other
things, prevailing interest rates, the financial condition of Southern and the
market for similar securities. Depending on these and other factors, the
Exchange Capital Securities may trade at a discount.
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Notwithstanding the registration of the Exchange Capital Securities in the
Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of Southern, Capital or the Trust may publicly offer for sale
or resell the Exchange Capital Securities only in compliance with the
provisions of Rule 144 under the Securities Act.
Each broker-dealer that receives Exchange Capital Securities for its own
account in exchange for Original Capital Securities, where such Original
Capital Securities were acquired by such broker-dealer as a result of market-
making activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Capital
Securities. See "Plan of Distribution."
THE SOUTHERN COMPANY
Southern was incorporated under the laws of Delaware on November 9, 1945.
Southern is domesticated under the laws of Georgia and is qualified to do
business as a foreign corporation under the laws of Alabama. The principal
executive offices of Southern are located at 270 Peachtree Street, N.W.,
Atlanta, Georgia 30303, and the telephone number is (770) 393-0650.
Southern owns all the outstanding common stock of Alabama Power Company
("ALABAMA"), Georgia Power Company ("GEORGIA"), Gulf Power Company ("GULF"),
Mississippi Power Company ("MISSISSIPPI") and Savannah Electric and Power
Company ("SAVANNAH") (ALABAMA, GEORGIA, GULF, MISSISSIPPI and SAVANNAH being
collectively referred to herein as the "operating affiliates"), each of which
is an operating public utility company, and of Southern Company Services, Inc.
(the system service company). ALABAMA and GEORGIA each owns 50% of the
outstanding common stock of Southern Electric Generating Company ("SEGCO").
The operating affiliates supply electric service in the states of Alabama,
Georgia, Florida, Mississippi and Georgia, respectively, and SEGCO owns
generating units at a large electric generating station which supplies power
to ALABAMA and GEORGIA. Southern also owns all the outstanding common stock of
Southern Energy, Inc. ("Southern Energy"), The Southern Development and
Investment Group, Inc. ("Southern Development"), Southern Nuclear Operating
Company, Inc. ("Southern Nuclear") and Southern Communications Services, Inc.
("Southern Communications"). Southern Energy designs, builds, owns and
operates power production and delivery facilities and provides a broad range
of technical services to industrial companies and utilities in the United
States and a number of international markets. Southern Development explores,
develops and markets energy management services and other business lines
relating to Southern's core business of generating and distributing energy.
Southern Nuclear provides services to the Southern electric system's nuclear
plants. Southern Communications provides digital wireless communications
services to the operating affiliates and regional non-affiliates.
SOUTHERN COMPANY CAPITAL FUNDING, INC.
Capital was established to obtain financing for Southern and direct and
indirect subsidiaries of Southern other than the operating affiliates. Capital
does not and will not engage in business activities other than such financing.
Capital was incorporated under the laws of Delaware on January 24, 1997 and
is a wholly-owned subsidiary of SEI Holdings, Inc., which itself is a wholly-
owned subsidiary of Southern. The principal executive offices of Capital are
located at 270 Peachtree Street, N.W., Atlanta, Georgia 30303, and the
telephone number is (770) 393-0650.
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SOUTHERN COMPANY CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware law pursuant
to the filing of a certificate of trust with the Delaware Secretary of State
on January 24, 1997. The Trust's business is defined in a trust agreement,
executed by Capital, as Depositor, and Bankers Trust (Delaware), as the
Delaware Trustee thereunder. This trust agreement was amended and restated in
its entirety as of February 1, 1997 (the "Trust Agreement"). The Trust exists
for the exclusive purposes of (i) issuing the Trust Securities representing
undivided beneficial interests in the assets of the Trust and effecting the
Exchange Offer, (ii) investing the gross proceeds of the Trust Securities in
the Junior Subordinated Notes, (iii) exchanging the Original Junior
Subordinated Notes for the Exchange Junior Subordinated Notes in the Exchange
Offer, and (iv) engaging in only those other activities necessary,
appropriate, convenient or incidental thereto. The Trust has a term of
approximately 45 years, but may terminate earlier as provided in the Trust
Agreement.
Upon issuance of the Capital Securities, the purchasers thereof owned all of
the Capital Securities. Capital acquired all of the Common Securities, which
have an aggregate liquidation amount equal to approximately 3% of the total
capital of the Trust. The Common Securities rank pari passu, and payments will
be made thereon pro rata, with the Capital Securities, except that upon the
occurrence and continuance of a Subordinated Note Indenture Event of Default,
the rights of the holders of 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 Capital Securities.
The Trust's business and affairs are conducted by the Securities Trustees,
which were appointed by Capital as the holder of the Common Securities. Two
employees of a subsidiary of Southern serve as Administrative Trustees.
Bankers Trust Company serves as Property Trustee and holds legal title to the
Junior Subordinated Notes issued by Capital on behalf of the Trust and the
holders of the Trust Securities. Bankers Trust (Delaware) serves as Delaware
Trustee. In certain circumstances, the holders of a majority in liquidation
amount of the Capital Securities are entitled to appoint a Substitute Property
Trustee. See "Description of the Exchange Capital Securities -- Voting
Rights."
The Property Trustee holds legal title to the Junior Subordinated Notes for
the benefit of the Trust and the holders of the Trust Securities and has the
power to exercise all rights, powers and privileges under the Subordinated
Note Indenture as the holder of the Junior Subordinated Notes. The Property
Trustee will make payments of distributions and payments on liquidation,
redemption and otherwise to the holders of the Trust Securities. Subject to
the right of the holders of the Capital Securities to appoint a Substitute
Property Trustee in certain instances, Capital, as the holder of all the
Common Securities, has the right to appoint, remove or replace all the
Securities Trustees.
The Junior Subordinated Notes constitute substantially all of the assets of
the Trust. Other assets that may constitute "Trust Property" (as that term is
defined in the Trust Agreement) include any cash on deposit in, or owing to,
the payment account as established under the Trust Agreement, as well as any
other property or assets held by the Property Trustee pursuant to the Trust
Agreement. In addition, the Trust may, from time to time, receive cash
pursuant to the Agreement as to Expenses and Liabilities.
The rights of the holders of the Capital Securities, including economic
rights, rights to information and voting rights, are as set forth in the Trust
Agreement, the Delaware Business Trust Act, and the Trust Indenture Act of
1939, as amended (the "1939 Act"). See "Description of the Exchange Capital
Securities."
The Trust's office in the State of Delaware is c/o Bankers Trust (Delaware),
E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre Road,
Suite 200, Wilmington, Delaware 19805-1266. The principal place of business of
the Trust shall be c/o Southern, 270 Peachtree Street, N.W., Atlanta, Georgia
30303, telephone (770) 393-0650, Attn: Secretary.
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ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of Southern and, accordingly, the accounts of the Trust will be included in
the consolidated financial statements of Southern. The Capital Securities will
be presented as a separate line item in the consolidated balance sheet of
Southern, and appropriate disclosures concerning the Capital Securities, the
Capital Securities Guarantee, the Junior Subordinated Notes and the Notes
Guarantee will be included in the notes to the consolidated financial
statements. For financial reporting purposes, Southern will record
distributions payable on the Capital Securities as an expense.
USE OF PROCEEDS
Neither Southern, Capital nor the Trust will receive any cash proceeds from
the issuance of the Exchange Capital Securities offered hereby. In
consideration for issuing the Exchange Capital Securities in exchange for
Original Capital Securities as described in this Prospectus, the Trust will
receive Original Capital Securities in like liquidation amount. The Original
Capital Securities surrendered in exchange for the Exchange Capital Securities
will be retired and canceled.
All of the proceeds from the sale of the Original Capital Securities were
invested by the Trust in the Original Junior Subordinated Notes. The proceeds
from such investment were remitted to Southern and used by it to repay a
portion of its outstanding short-term debt.
RECENT RESULTS OF OPERATIONS
For the twelve months ended June 30, 1997, the unaudited amounts of
"Operating Revenues," "Income Before Interest Charges," "Consolidated Net
Income," "Earnings per Share of Common Stock" and "Dividends Paid per Share of
Common Stock" were $10,667,000,000, $1,927,000,000, $1,009,000,000, $1.49 and
$1.28, respectively. In the opinion of the management of Southern, the above
amounts for the twelve months ended June 30, 1997 reflect all adjustments
(which were only normal recurring adjustments, except as indicated in Note (1)
to the Selected Consolidated Financial Information under "Summary" above)
necessary to present fairly the results of operations for such period. The
"Ratio of Earnings to Fixed Charges" and the "Ratio of Earnings to Fixed
Charges Plus Preferred Dividend Requirements (Pre-Income Tax Basis)" for the
twelve months ended June 30, 1997 were 3.21 and 2.82, respectively.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the Original Capital Securities, Southern,
Capital and the Trust entered into the Registration Rights Agreement with the
Initial Purchasers, pursuant to which Southern, Capital and the Trust agreed
to use their reasonable best efforts to file and to cause to become effective
with the Commission a registration statement with respect to the exchange of
the Original Capital Securities for capital securities with terms identical in
all material respects to the terms of the Original Capital Securities except
as described herein. A copy of the Registration Rights Agreement has been
filed as an exhibit to the Registration Statement of which this Prospectus is
a part.
The Exchange Offer is being made to satisfy the contractual obligations of
Southern, Capital and the Trust under the Registration Rights Agreement. The
form and terms of the Exchange Capital Securities are the same as the form and
terms of the Original Capital Securities except that the Exchange Capital
Securities have been registered under the Securities Act and will not be
subject to certain restrictions on transfer applicable to the Original Capital
Securities, and will not provide for any increase in the distribution rate
thereon. In that regard, the Original Capital Securities provide, among other
things, that, if a registration statement relating to the
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Exchange Offer has not been filed and declared effective within certain
specified periods, the distribution rate borne by the Original Capital
Securities will increase by 0.25% per annum until such registration statement is
filed or declared effective, as the case may be. Upon consummation of the
Exchange Offer, holders of Original Capital Securities will not be entitled to
any increase in the distribution rate thereon or any further registration rights
under the Registration Rights Agreement, except under limited circumstances. See
"Risk Factors--Consequences of a Failure to Exchange Original Capital
Securities" and "Description of the Original Securities."
The Exchange Offer is not being made to, nor will the Trust accept tenders
for exchange from, holders of Original Capital Securities in any jurisdiction
in which the Exchange Offer or the acceptance thereof would not be in
compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to the
Exchange Offer means any person in whose name the Original Capital Securities
are registered on the books of the Trust or any other person who has obtained
a properly completed bond power from the registered holder, or any person
whose Original Capital Securities are held of record by DTC who desires to
deliver such Original Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, Capital will exchange as soon as practicable
after the date hereof the Original Junior Subordinated Notes for a like
aggregate principal amount of the Exchange Junior Subordinated Notes and
Southern will exchange as soon as practicable after the date hereof the
Original Capital Securities Guarantee for the Exchange Capital Securities
Guarantee and the Original Notes Guarantee for the Exchange Notes Guarantee.
The Exchange Capital Securities Guarantee, the Exchange Notes Guarantee and
Exchange Junior Subordinated Notes have also been registered under the
Securities Act.
TERMS OF THE EXCHANGE OFFER
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $325,000,000 aggregate liquidation amount of Exchange Capital
Securities for a like aggregate liquidation amount of Original Capital
Securities properly tendered on or prior to the Expiration Date and not
properly withdrawn in accordance with the procedures described below. The
Trust will issue, promptly after the Expiration Date, an aggregate liquidation
amount of up to $325,000,000 of Exchange Capital Securities in exchange for a
like liquidation amount of outstanding Original Capital Securities tendered
and accepted in connection with the Exchange Offer. Holders may tender their
Original Capital Securities in whole or in part in a liquidation amount of not
less than $100,000 (100 Original Capital Securities) or any integral multiple
of $1,000 liquidation amount (one Original Capital Security) in excess
thereof.
The Exchange Offer is not conditioned upon any minimum liquidation amount of
Original Capital Securities being tendered. As of the date of this Prospectus,
$325,000,000 aggregate liquidation amount of the Original Capital Securities
is outstanding.
Holders of Original Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Original Capital
Securities which are not tendered for or are tendered but not accepted in
connection with the Exchange Offer will remain outstanding and be entitled to
the benefits of the Trust Agreement, but will not be entitled to any further
registration rights under the Registration Rights Agreement, except under
limited circumstances. See "Risk Factors--Consequences of a Failure to
Exchange Original Capital Securities" and "Description of the Original
Securities."
If any tendered Original Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Original Capital
Securities will be returned, or appropriate book-entry transfer will be made,
as the case may be, without expense, to the tendering holder thereof promptly
after the Expiration Date.
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Holders who tender Original Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Original Capital Securities in connection with the
Exchange Offer. Southern will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the Exchange Offer. See
"--Fees and Expenses."
NEITHER SOUTHERN, THE BOARD OF DIRECTORS OF SOUTHERN, CAPITAL, THE BOARD OF
DIRECTORS OF CAPITAL NOR ANY TRUSTEE OF THE TRUST MAKES ANY RECOMMENDATION TO
HOLDERS OF ORIGINAL CAPITAL SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING ALL OR ANY PORTION OF THEIR ORIGINAL CAPITAL SECURITIES PURSUANT TO
THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH
RECOMMENDATION. HOLDERS OF ORIGINAL CAPITAL SECURITIES MUST MAKE THEIR OWN
DECISIONS WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE
AGGREGATE AMOUNT OF ORIGINAL CAPITAL SECURITIES TO TENDER BASED ON SUCH
HOLDERS' OWN FINANCIAL POSITIONS AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on September
3, 1997, unless the Exchange Offer is extended by Southern, Capital or the
Trust (in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended).
Southern, Capital and the Trust expressly reserve the right in their sole
and absolute discretion, subject to applicable law, at any time and from time
to time, (i) to delay the acceptance of the Original Capital Securities for
exchange, (ii) to terminate the Exchange Offer (whether or not any Original
Capital Securities have theretofore been accepted for exchange) if Southern,
Capital or the Trust determines, in its sole and absolute discretion, that any
of the events or conditions referred to under "--Conditions to the Exchange
Offer" have occurred or exist or have not been satisfied, (iii) to extend the
Expiration Date of the Exchange Offer and retain all Original Capital
Securities tendered pursuant to the Exchange Offer, subject, however, to the
right of holders of Original Capital Securities to withdraw their tendered
Original Capital Securities as described under "--Withdrawal Rights," and (iv)
to waive any condition or otherwise amend the terms of the Exchange Offer in
any respect. If the Exchange Offer is amended in a manner determined by
Southern, Capital and the Trust to constitute a material change, or if
Southern, Capital and the Trust waive a material condition of the Exchange
Offer, Southern, Capital and the Trust will promptly disclose such amendment
by means of a prospectus supplement that will be distributed to the registered
holders of the Original Capital Securities, and Southern, Capital and the
Trust will extend the Exchange Offer to the extent required by Rule 14e-1
under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and
by making a public announcement thereof, and such announcement in the case of
an extension will be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date. Without
limiting the manner in which Southern, Capital and the Trust may choose to
make any public announcement and, subject to applicable law, Southern, Capital
and the Trust shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by issuing a release to an
appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF EXCHANGE CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent, Exchange Capital
Securities for Original Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.
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In all cases, delivery of Exchange Capital Securities in exchange for
Original Capital Securities tendered and accepted for exchange pursuant to the
Exchange Offer will be made only after timely receipt by the Exchange Agent of
(i) Original Capital Securities or a book-entry confirmation of a book-entry
transfer of Original Capital Securities into the Exchange Agent's account at
DTC, including an Agent's Message (as defined below) if the tendering holder
has not delivered a Letter of Transmittal, (ii) the Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or (in the case of a book-entry transfer) an Agent's
Message in lieu of the Letter of Transmittal, and (iii) any other documents
required by the Letter of Transmittal.
The term "book-entry confirmation" means a timely confirmation of a book-
entry transfer of Original Capital Securities into the Exchange Agent's
account at DTC. The term "Agent's Message" means a message, transmitted by DTC
to and received by the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgment
from the tendering DTC participant, which acknowledgment states that such
participant has received and agrees to be bound by the Letter of Transmittal
and that the Trust, Capital and Southern may enforce such Letter of
Transmittal against such participant.
Subject to the terms and conditions of the Exchange Offer, the Trust will be
deemed to have accepted for exchange, and thereby exchanged, Original Capital
Securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the Exchange Agent of the Trust's acceptance of such
Original Capital Securities for exchange pursuant to the Exchange Offer. The
Exchange Agent will act as agent for the Trust for the purpose of receiving
tenders of Original Capital Securities, Letters of Transmittal and related
documents, and as agent for tendering holders for the purpose of receiving
Original Capital Securities, Letters of Transmittal and related documents and
transmitting Exchange Capital Securities to validly tendering holders. Such
exchange will be made promptly after the Expiration Date. If for any reason
whatsoever, acceptance for exchange or the exchange of any Original Capital
Securities tendered pursuant to the Exchange Offer is delayed (whether before
or after the Trust's acceptance for exchange of Original Capital Securities)
or the Trust extends the Exchange Offer or is unable to accept for exchange or
exchange Original Capital Securities tendered pursuant to the Exchange Offer,
then, without prejudice to the Trust's rights set forth herein, the Exchange
Agent may, nevertheless, on behalf of the Trust and subject to Rule 14e-1(c)
under the Exchange Act, retain tendered Original Capital Securities and such
Original Capital Securities may not be withdrawn except to the extent
tendering holders are entitled to withdrawal rights as described under "--
Withdrawal Rights."
Pursuant to the Letter of Transmittal or Agent's Message in lieu thereof, a
holder of Original Capital Securities will warrant and agree in the Letter of
Transmittal that it has full power and authority to tender, exchange, sell,
assign and transfer Original Capital Securities, that the Trust will acquire
good, marketable and unencumbered title to the tendered Original Capital
Securities, free and clear of all liens, restrictions, charges and
encumbrances, and the Original Capital Securities tendered for exchange are
not subject to any adverse claims or proxies. The holder also will warrant and
agree that it will, upon request, execute and deliver any additional documents
deemed by the Trust or the Exchange Agent to be necessary or desirable to
complete the exchange, sale, assignment, and transfer of the Original Capital
Securities tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING ORIGINAL CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Original Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or (in the case of a book-entry tender) an
Agent's Message in lieu of the Letter of Transmittal, and any other required
documents, must be received by the Exchange Agent at one of its addresses set
forth under "--Exchange Agent," and either (i) tendered Original Capital
Securities must be received by the Exchange Agent, or (ii) such Original
Capital Securities must be tendered pursuant to the procedures for book-entry
transfer set forth below and a book-entry confirmation, including an Agent's
Message if the tendering holder has not delivered a Letter of Transmittal,
must be received by the Exchange Agent, in each case on or prior to the
Expiration Date, or (iii) the guaranteed delivery procedures set forth below
must be complied with.
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If less than all of the Original Capital Securities are tendered, a
tendering holder should fill in the amount of Original Capital Securities
being tendered in the appropriate box on the Letter of Transmittal. The entire
amount of Original Capital Securities delivered to the Exchange Agent will be
deemed to have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Exchange Agent will establish an account with
respect to the Original Capital Securities at DTC for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Original Capital
Securities by causing DTC to transfer such Original Capital Securities into
the Exchange Agent's account at DTC in accordance with DTC's procedures for
transfers. However, although delivery of Original Capital Securities may be
effected through book-entry transfer into the Exchange Agent's account at DTC,
the Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an Agent's Message in
lieu of the Letter of Transmittal, and any other required documents, must in
any case be delivered to and received by the Exchange Agent at its address set
forth under "--Exchange Agent" on or prior to the Expiration Date, or the
guaranteed delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for the Original Capital Securities need
not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Original Capital Securities is
registered in a name other than that of the person surrendering the
certificate or (b) such holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the Letter of Transmittal.
In the case of (a) or (b) above, such certificates for Original Capital
Securities must be duly endorsed or accompanied by a properly executed bond
power, with the endorsement or signature on the bond power and on the Letter
of Transmittal guaranteed by a firm or other entity identified in Rule 17Ad-15
under the Exchange Act as an "eligible guarantor institution," including (as
such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association (an "Eligible Institution"),
unless surrendered on behalf of such Eligible Institution. See Instruction 1
to the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Original Capital
Securities pursuant to the Exchange Offer and the certificates for such
Original Capital Securities are not immediately available or time will not
permit all required documents to reach the Exchange Agent on or prior to the
Expiration Date, or the procedures for book-entry transfer cannot be completed
on a timely basis, such Original Capital Securities may nevertheless be
tendered, provided that all of the following guaranteed delivery procedures
are complied with:
(a) such tenders are made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form accompanying the Letter of Transmittal, is
received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(c) the certificates (or a book-entry confirmation) representing all
tendered Original Capital Securities, in proper form for transfer, together
with a properly completed and duly executed Letter of Transmittal (or
27
<PAGE>
facsimile thereof), with any required signature guarantees, or an Agent's
Message in lieu of the Letter of Transmittal, and any other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of Exchange Capital
Securities in exchange for Original Capital Securities tendered and accepted
for exchange pursuant to the Exchange Offer will in all cases be made only
after timely receipt by the Exchange Agent of Original Capital Securities, or
of a book-entry confirmation with respect to such Original Capital Securities,
and a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees, or an Agent's
Message in lieu of the Letter of Transmittal, and any other documents required
by the Letter of Transmittal. Accordingly, the delivery of Exchange Capital
Securities might not be made to all tendering holders at the same time, and
will depend upon when Original Capital Securities, book-entry confirmations
with respect to Original Capital Securities and other required documents are
received by the Exchange Agent.
The Trust's acceptance for exchange of Original Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and
subject to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange
of any tendered Original Capital Securities will be determined by Southern,
Capital and the Trust, in their sole discretion, whose determination shall be
final and binding on all parties. Southern, Capital and the Trust reserve the
absolute right, in their sole and absolute discretion, to reject any and all
tenders determined by them not to be in proper form or the acceptance of
which, or exchange for, may, in the opinion of counsel to Southern, Capital
and the Trust, be unlawful. Southern, Capital and the Trust also reserve the
absolute right, subject to applicable law, to waive any of the conditions of
the Exchange Offer as set forth under "--Conditions to the Exchange Offer" or
any condition or irregularity in any tender of Original Capital Securities of
any particular holder whether or not similar conditions or irregularities are
waived in the case of other holders.
The interpretation by Southern, Capital and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Original Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither Southern,
Capital, the Trust, any affiliates or assigns of Southern, Capital or the
Trust, the Exchange Agent nor any other person shall be under any duty to give
any notification of any irregularities in tenders or incur any liability for
failure to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney, or
any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by Southern,
Capital and the Trust, proper evidence satisfactory to Southern, Capital and
the Trust, in their sole discretion, of such person's authority to so act must
be submitted.
A beneficial owner of Original Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
RESALES OF EXCHANGE CAPITAL SECURITIES
The Trust is making the Exchange Offer for the Exchange Capital Securities
in reliance on the position of the staff of the Division of Corporation
Finance of the Commission as set forth in certain interpretive letters
28
<PAGE>
addressed to third parties in other transactions. However, neither Southern,
Capital nor the Trust sought its own interpretive letter and there can be no
assurance that the staff of the Division of Corporation Finance of the
Commission would make a similar determination with respect to the Exchange
Offer as it has in such interpretive letters to third parties. Based on these
interpretations by the staff of the Division of Corporation Finance of the
Commission, and subject to the two immediately following sentences, Southern,
Capital and the Trust believe that Exchange Capital Securities issued pursuant
to this Exchange Offer in exchange for Original Capital Securities may be
offered for resale, resold and otherwise transferred by a holder thereof
(other than a holder who is a broker-dealer) without further compliance with
the registration and prospectus delivery requirements of the Securities Act,
provided that such Exchange Capital Securities are acquired in the ordinary
course of such holder's business and that such holder is not participating,
and has no arrangement or understanding with any person to participate, in a
distribution (within the meaning of the Securities Act) of such Exchange
Capital Securities. However, any holder of Original Capital Securities who is
an "affiliate" of Southern, Capital or the Trust or who intends to participate
in the Exchange Offer for the purpose of distributing Exchange Capital
Securities, or any broker-dealer who purchased Original Capital Securities
from the Trust to resell pursuant to Rule 144A or any other available
exemption under the Securities Act, (a) will not be able to rely on the
interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (b) will not
be permitted or entitled to tender such Original Capital Securities in the
Exchange Offer and (c) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
other transfer of such Original Capital Securities unless such sale is made
pursuant to an exemption from such requirements. In addition, as described
below, if any broker-dealer holds Original Capital Securities acquired for its
own account as a result of market-making or other trading activities and
exchanges such Original Capital Securities for Exchange Capital Securities,
then such broker-dealer must deliver a prospectus meeting the requirements of
the Securities Act in connection with any resales of such Exchange Capital
Securities.
Each holder of Original Capital Securities who wishes to exchange Original
Capital Securities for Exchange Capital Securities in the Exchange Offer will
be required to represent that (i) it is not an "affiliate" of Southern,
Capital or the Trust, (ii) any Exchange Capital Securities to be received by
it are being acquired in the ordinary course of its business, (iii) it has no
arrangement or understanding with any person to participate in a distribution
(within the meaning of the Securities Act) of such Exchange Capital
Securities, and (iv) if such holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities. In
addition, Southern, Capital and the Trust may require such holder, as a
condition to such holder's eligibility to participate in the Exchange Offer,
to furnish to Southern, Capital and the Trust (or an agent thereof) in writing
information as to the number of "beneficial owners" (within the meaning of
Rule 13d-3 under the Exchange Act) on behalf of whom such holder holds the
Original Capital Securities to be exchanged in the Exchange Offer. Each
broker-dealer that receives Exchange Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it acquired the Original
Capital Securities for its own account as the result of market-making
activities or other trading activities and must agree that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with
any resale of such Exchange Capital Securities. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Based on the position taken by the staff of the
Division of Corporation Finance of the Commission in the interpretive letters
referred to above, Southern, Capital and the Trust believe that Participating
Broker-Dealers who acquired Original Capital Securities for their own accounts
as a result of market-making activities or other trading activities may
fulfill their prospectus delivery requirements with respect to the Exchange
Capital Securities received upon exchange of such Original Capital Securities
(other than Original Capital Securities which represent an unsold allotment
from the initial sale of the Original Capital Securities) with a prospectus
meeting the requirements of the Securities Act, which may be the prospectus
prepared for an exchange offer so long as it contains a description of the
plan of distribution with respect to the resale of such Exchange Capital
Securities. Accordingly, this Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating Broker-Dealer during the
period referred to below in connection with resales of Exchange Capital
Securities received in exchange for Original Capital Securities
29
<PAGE>
where such Original Capital Securities were acquired by such Participating
Broker-Dealer for its own account as a result of market-making or other
trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, Southern, Capital and the Trust have agreed
that this Prospectus, as it may be amended or supplemented from time to time,
may be used by a Participating Broker-Dealer in connection with resales of
such Exchange Capital Securities for a period not exceeding 90 days after the
Expiration Date (subject to extension under certain limited circumstances
described below). See "Plan of Distribution." However, a Participating Broker-
Dealer who intends to use this Prospectus in connection with the resale of
Exchange Capital Securities received in exchange for Original Capital
Securities pursuant to the Exchange Offer must notify Southern, Capital or the
Trust, or cause Southern, Capital or the Trust to be notified, on or prior to
the Expiration Date, that it is a Participating Broker-Dealer. Such notice may
be given in the space provided for that purpose in the Letter of Transmittal
or may be delivered to the Exchange Agent at one of the addresses set forth
herein under "--Exchange Agent." Any Participating Broker-Dealer who is an
"affiliate" of Southern, Capital or the Trust may not rely on such
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction.
In that regard, each Participating Broker-Dealer who surrenders Original
Capital Securities pursuant to the Exchange Offer will be deemed to have
agreed, by execution of the Letter of Transmittal or delivery of an Agent's
Message in lieu thereof, that upon receipt of notice from Southern, Capital or
the Trust of the occurrence of any event or the discovery of (i) any fact
which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or (ii) any fact which causes this
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference herein, in light of the
circumstances under which they were made, not misleading, or (iii) of the
occurrence of certain other events specified in the Registration Rights
Agreement, such Participating Broker-Dealer will suspend the sale of Exchange
Capital Securities (or the Exchange Capital Securities Guarantee, the Exchange
Notes Guarantee or the Exchange Junior Subordinated Notes, as applicable)
pursuant to this Prospectus until Southern, Capital or the Trust has amended
or supplemented this Prospectus to correct such misstatement or omission and
has furnished copies of the amended or supplemented Prospectus to such
Participating Broker-Dealer, or Southern, Capital or the Trust has given
notice that the sale of the Exchange Capital Securities (or the Exchange
Capital Securities Guarantee, the Exchange Notes Guarantee or the Exchange
Junior Subordinated Notes, as applicable) may be resumed, as the case may be.
If Southern, Capital or the Trust gives such notice to suspend the sale of the
Exchange Capital Securities (or the Exchange Capital Securities Guarantee, the
Exchange Notes Guarantee or the Exchange Junior Subordinated Notes, as
applicable), it shall extend the 90-day period referred to above during which
Participating Broker-Dealers are entitled to use this Prospectus in connection
with the resale of Exchange Capital Securities by the number of days during
the period from and including the date of the giving of such notice to and
including the date when Participating Broker-Dealers shall have received
copies of the amended or supplemented Prospectus necessary to permit resales
of the Exchange Capital Securities or to and including the date on which
Southern, Capital or the Trust has given notice that the sale of Exchange
Capital Securities (or the Exchange Capital Securities Guarantee, the Exchange
Notes Guarantee or the Exchange Junior Subordinated Notes, as applicable) may
be resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Original Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at its address set forth under "--Exchange Agent" on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Original Capital Securities to be
withdrawn, the aggregate principal amount of Original Capital Securities to be
withdrawn, and (if certificates for such Original Capital Securities have been
tendered) the name of the registered holder of the Original Capital Securities
as set forth on the Original Capital Securities, if different from that of the
person who tendered such Original Capital Securities. If Original Capital
Securities have been delivered or otherwise identified to the Exchange Agent,
then prior to the physical release of such
30
<PAGE>
Original Capital Securities, the tendering holder must submit the serial
numbers shown on the particular Original Capital Securities to be withdrawn
and the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution, except in the case of Original Capital Securities
tendered for the account of an Eligible Institution. If Original Capital
Securities have been tendered pursuant to the procedures for book-entry
transfer set forth in "--Procedures for Tendering Original Capital
Securities," the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of Original Capital
Securities, in which case a notice of withdrawal will be effective if
delivered to the Exchange Agent by written, telegraphic, telex or facsimile
transmission. Withdrawals of tenders of Original Capital Securities may not be
rescinded. Original Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described above under "--Procedures for Tendering Original Capital
Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Trust, in its
sole discretion, whose determination shall be final and binding on all
parties. Neither Southern, Capital, the Trust, any affiliates or assigns of
Southern, Capital or the Trust, the Exchange Agent nor any other person shall
be under any duty to give any notification of any irregularities in any notice
of withdrawal or incur any liability for failure to give any such
notification. Any Original Capital Securities which have been tendered but
which are withdrawn will be returned to the holder thereof promptly after
withdrawal.
DISTRIBUTIONS ON EXCHANGE CAPITAL SECURITIES
Holders of Original Capital Securities whose Original Capital Securities are
accepted for exchange will be deemed to have waived the right to receive any
distributions on such Original Capital Securities accumulated from and after
August 1, 1997. Accordingly, holders of Exchange Capital Securities as of the
record date for the payment of distributions on February 1, 1998 will be
entitled to receive distributions accumulated from and after August 1, 1997.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any extension
of the Exchange Offer, Southern, Capital and the Trust will not be required to
accept for exchange, or to exchange, any Original Capital Securities for any
Exchange Capital Securities, and, as described below, may terminate the
Exchange Offer (whether or not any Original Capital Securities have
theretofore been accepted for exchange) or may waive any conditions to or
amend the Exchange Offer, if any of the following conditions has occurred or
exists or has not been satisfied:
(a) there shall occur a change in the current interpretation by the staff
of the Commission which permits the Exchange Capital Securities issued
pursuant to the Exchange Offer in exchange for Original Capital Securities
to be offered for resale, resold and otherwise transferred by holders
thereof (other than broker-dealers and any such holder which is an
"affiliate" of Southern, Capital or the Trust within the meaning of Rule
405 under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such
Exchange Capital Securities are acquired in the ordinary course of such
holders' business and such holders have no arrangement or understanding
with any person to participate in the distribution of such Exchange Capital
Securities; or
(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of Southern, Capital or the Trust, would
reasonably be expected to impair its ability to proceed with the Exchange
Offer; or
(c) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement, or proceedings shall have been initiated or, to the knowledge of
Southern, Capital or the Trust, threatened for that purpose, or any
governmental approval has not been obtained, which approval Southern,
Capital or the Trust shall, in its sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby; or
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<PAGE>
(d) Southern shall receive an opinion of counsel experienced in such
matters to the effect that there is more than an insubstantial risk that
consummation of the Exchange Offer would result in interest payable to the
Trust on the Junior Subordinated Notes being not deductible by Southern for
United States income tax purposes.
If Southern, Capital or the Trust determines in its sole and absolute
discretion that any of the foregoing events or conditions has occurred or
exists or has not been satisfied, it may, subject to applicable law, terminate
the Exchange Offer (whether or not any Original Capital Securities have
theretofore been accepted for exchange) or may waive any such condition or
otherwise amend the terms of the Exchange Offer in any respect. If such waiver
or amendment constitutes a material change to the Exchange Offer, Southern,
Capital or the Trust will promptly disclose such waiver or amendment by means
of a prospectus supplement that will be distributed to the registered holders
of the Original Capital Securities and will extend the Exchange Offer to the
extent required by Rule 14e-1 under the Exchange Act.
EXCHANGE AGENT
Bankers Trust Company has been appointed as Exchange Agent for the Exchange
Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed
to the Exchange Agent as follows:
<TABLE>
<CAPTION>
By Mail: By Hand: By Overnight Mail or Courier:
<S> <C> <C>
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Reorganization Unit Corporate Trust & Agency Group Corporate Trust & Agency Group
P.O. Box 292737 Receipt & Delivery Window Reorganization Unit
Nashville, TN 37229-2737 123 Washington Street, 1st Floor 648 Grassmere Park Road
New York, NY 10006 Nashville, TN 37211
For Information Call:
(800) 735-7777
Confirm By Telephone:
(615) 835-3572
Facsimile Transmissions:
(615) 835-3701
(ELIGIBLE INSTITUTIONS ONLY)
</TABLE>
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
Southern has agreed to pay the Exchange Agent reasonable and customary fees
for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith. Southern will also pay brokerage houses and
other custodians, nominees and fiduciaries the reasonable out-of-pocket
expenses incurred by them in forwarding copies of this Prospectus and related
documents to the beneficial owners of Original Capital Securities, and in
handling or tendering for their customers.
Holders who tender their Original Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however,
Exchange Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Original Capital
Securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of Original Capital Securities in connection with
32
<PAGE>
the Exchange Offer, then the amount of any such transfer taxes (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such tendering
holder.
Neither Southern, Capital nor the Trust will make any payment to brokers,
dealers or other nominees soliciting acceptances of the Exchange Offer.
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<PAGE>
DESCRIPTION OF THE EXCHANGE CAPITAL SECURITIES
The Original Capital Securities and the Common Securities were issued and
the Exchange Capital Securities will be issued pursuant to the terms of the
Trust Agreement. The Trust Agreement has been qualified as an indenture under
the 1939 Act. The Property Trustee will act as the indenture trustee with
respect to the Trust, as well as the Exchange Capital Securities Guarantee,
for purposes of compliance with the provisions of the 1939 Act. The terms of
the Exchange Capital Securities will include those stated in the Trust
Agreement, the Delaware Business Trust Act, and those made part of the Trust
Agreement by the 1939 Act. A copy of the Trust Agreement is filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
following summary of the principal terms and provisions of the Exchange
Capital Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Trust Agreement, as well as the
1939 Act.
GENERAL
The Trust Agreement authorizes the Administrative Trustees, on behalf of the
Trust, to issue the Capital Securities (including the Original Capital
Securities and the Exchange Capital Securities), which represent preferred
undivided beneficial interests in the assets of the Trust, and the Common
Securities, which represent common undivided beneficial interests in the
assets of the Trust. All of the Common Securities are owned by Capital. The
Common Securities rank pari passu, and payments will be made thereon on a pro
rata basis, with the Capital Securities, except that upon the occurrence of a
Subordinated Note Indenture Event of Default, the rights of the holders of the
Common Securities to receive payment of periodic distributions and payments
upon liquidation, redemption and otherwise will be subordinated to the rights
of the holders of the Capital Securities. The Trust Agreement does not permit
the issuance by the Trust of any securities other than the Trust Securities or
the incurrence of any indebtedness by the Trust. Pursuant to the Trust
Agreement, the Property Trustee will own and hold the Junior Subordinated
Notes for the benefit of the Trust and the holders of the Trust Securities.
The payment of distributions out of money held by the Trust, and payments upon
redemption of the Exchange Capital Securities or liquidation of the Trust, are
guaranteed by Southern on a subordinated basis as and to the extent described
under "Description of the Exchange Capital Securities Guarantee". The Exchange
Capital Securities Guarantee does not cover payment of distributions on the
Exchange Capital Securities when the Trust does not have legally and
immediately available funds sufficient to make such distributions. In such
event, the remedy of a holder of Exchange Capital Securities is to direct the
Property Trustee to enforce its rights under the Junior Subordinated Notes. In
addition, a holder of Exchange Capital Securities may institute a legal
proceeding directly against Capital, without first instituting a legal
proceeding against the Property Trustee or any other person or entity, for
enforcement of payment to such holder of principal of or interest on the
Junior Subordinated Notes having a principal amount equal to the aggregate
stated liquidation amount of the Exchange Capital Securities of such holder on
or after the due dates specified in the Junior Subordinated Notes. The above
mechanisms and obligations, together with Southern's obligations under the
Exchange Notes Guarantee and the Agreement as to Expenses and Liabilities,
constitute a full and unconditional guarantee by Southern and Capital of
payments due on the Exchange Capital Securities. See "--Voting Rights" below.
DISTRIBUTIONS
Distributions on the Capital Securities will be fixed at the Securities Rate
and will accrue from February 4, 1997 and, except in the event of an Extension
Period, will be payable semi-annually in arrears on February 1 and August 1 of
each year. In the event that any date on which distributions are to be made on
the Capital Securities is not a Business Day, then payment of the
distributions payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date. A "Business Day" shall mean any day other than a Saturday or Sunday, a
day on which banks in New York City are authorized or obligated by law or
executive order to remain closed or a day on which the principal corporate
trust office of the Property Trustee or the Indenture Trustee is closed for
business.
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<PAGE>
Distributions payable on any Distribution Date will be payable to the
holders of record on the Record Date for such Distribution Date, which is the
close of business on the fifteenth calendar day preceding such Distribution
Date. Subject to any applicable laws and regulations and the provisions of the
Trust Agreement, each such payment will be made as described under "Form,
Denomination, Book-Entry Procedures and Transfer" below. The amount of
distributions payable for any period will be computed on the basis of a 360-
day year of twelve 30-day months.
Capital has the right under the Subordinated Note Indenture to defer
payments of interest on the Junior Subordinated Notes by extending the
interest payment period from time to time on the Junior Subordinated Notes
(each, an "Extension Period") which, if exercised, would defer semi-annual
distributions on the Capital Securities during any such extended interest
payment period. Deferred installments of interest on the Junior Subordinated
Notes will bear interest, compounded semi-annually, at a rate per annum equal
to the Securities Rate to the extent permitted by applicable law. If
distributions are deferred, the deferred distributions and accrued interest
thereon shall be paid, if funds are legally available therefor, to holders of
record of the Capital Securities as they appear on the books and records of
the Trust on the Record Date next following the termination of such Extension
Period. See "Description of the Exchange Junior Subordinated Notes--Interest"
and "--Option to Extend Interest Payment Period."
Distributions on the Capital Securities must be paid on the Distribution
Dates to the extent that the Trust has funds legally and immediately available
for the payment of such distributions. The Trust's funds available for
distribution to the holders of the Capital Securities will be limited to
payments received under the Junior Subordinated Notes. See "Description of the
Exchange Junior Subordinated Notes."
REDEMPTION
The Capital Securities are subject to mandatory redemption upon repayment of
the Junior Subordinated Notes at maturity or their earlier redemption. The
Junior Subordinated Notes will mature on February 1, 2037 (subject to
Capital's right to advance such maturity as described under "Description of
the Exchange Junior Subordinated Notes--Conditional Right to Advance
Maturity"), and may be redeemed at the option of Capital, (i) in whole or in
part at any time on or after February 1, 2007, or (ii) at any time in whole
upon the occurrence of a Special Event. Upon the repayment of the Junior
Subordinated Notes, whether at maturity or upon redemption, the proceeds from
such repayment or payment shall simultaneously be applied to redeem a like
amount of Trust Securities upon not less than 30 nor more than 60 days'
notice, at the applicable Redemption Price (as defined below). See
"Description of the Exchange Junior Subordinated Notes--Optional Redemption."
In the event that fewer than all of the outstanding Trust Securities are to be
redeemed, the Capital Securities to be redeemed will be selected in accordance
with DTC's procedures if the Capital Securities are in book-entry only form.
If the Capital Securities are not in book-entry only form, the Capital
Securities to be redeemed will be selected by such method as the Property
Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $1,000 or integral multiples
thereof) of the aggregate liquidation amount of Capital Securities of a
denomination larger than $1,000; provided, however, that before undertaking
the redemption of the Capital Securities on other than a pro rata basis, the
Property Trustee shall have received an opinion of counsel that the status of
the Trust as a grantor trust for federal income tax purposes would not be
adversely affected.
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<PAGE>
The Redemption Price, in the case of a redemption under (i) above, shall
equal the following prices, expressed in percentages of the liquidation amount
of the Capital Securities being redeemed, plus accumulated and unpaid
distributions thereon to the date of redemption, if redeemed during the 12-
month period beginning February 1 of the years indicated:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2007.............................. 104.0950%
2008.............................. 103.6855
2009.............................. 103.2760
2010.............................. 102.8665
2011.............................. 102.4570
2012.............................. 102.0475
2013.............................. 101.6380
2014.............................. 101.2285
2015.............................. 100.8190
2016.............................. 100.4095
</TABLE>
and at 100% on or after February 1, 2017.
The Redemption Price, in the case of a redemption prior to February 1, 2007
upon the occurrence of a Special Event as described under (ii) above, shall
equal for each Capital Security the Make-Whole Amount for a corresponding
$1,000 principal amount of Junior Subordinated Notes plus accumulated and
unpaid distributions thereon to the date of redemption. The "Make-Whole
Amount" shall be equal to the greater of (i) the amount equal to 100% of the
principal amount of the Junior Subordinated Notes being redeemed or (ii) the
amount equal to the sum of the present values of the remaining scheduled
payments of principal of and interest on the Junior Subordinated Notes being
redeemed through February 1, 2007 discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at a discount rate equal to the Treasury Yield plus 100 basis points, in the
case of such a redemption before February 1, 1998, and the Treasury Yield plus
50 basis points, in the case of such a redemption on or after February 1, 1998
but prior to February 1, 2007.
"Treasury Yield" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term through February 1, 2007 of the Junior Subordinated
Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term through
February 1, 2007 of the Junior Subordinated Notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the most recent
weekly statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "H.15 (519)" or (ii) if such release
(or any successor release) is not published or does not contain such prices on
such business day, the Reference Treasury Dealer Quotation for such redemption
date.
"Independent Investment Banker" means an independent investment banking
institution of national standing appointed by Capital and reasonably
acceptable to the Indenture Trustee.
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"Reference Treasury Dealer Quotation" means, with respect to the Reference
Treasury Dealer and any redemption date, the average, as determined by the
Indenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount and
quoted in writing to the Indenture Trustee by such Reference Treasury Dealer
at 5:00 p.m. on the third business day preceding such redemption date).
"Reference Treasury Dealer" means a primary US Government securities dealer
in New York City appointed by Capital and reasonably acceptable to the
Indenture Trustee.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Special Event at any time, Capital will have the
option to redeem the Junior Subordinated Notes in whole (and thus cause the
redemption of the Capital Securities in whole) or cause the distribution of
the Junior Subordinated Notes pro rata to the holders of the Trust Securities.
A Special Event is either an Investment Company Act Event or a Tax Event.
An "Investment Company Act Event" means that the Administrative Trustees,
Southern and Capital shall have received an opinion of independent counsel
(which may be counsel to Southern or Capital) to the effect that, as a result
of a change in law or regulation or a written change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority after February 4, 1997, there is more than an
insubstantial risk that the Trust is or will be considered an investment
company under the 1940 Act.
"Tax Event" means that the Administrative Trustees, Southern and Capital
shall have received an opinion from independent tax counsel experienced in
such matters (which may be counsel to Southern or Capital) to the effect that,
as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein or
(b) any amendment to, or change in, an interpretation or application of such
laws or regulations, there is more than an insubstantial risk that (i) the
Trust would be subject to United States federal income tax with respect to
income accrued or received on the Junior Subordinated Notes, (ii) interest
payable to the Trust on the Junior Subordinated Notes would not be deductible
by a member of Southern's consolidated tax group for United States federal
income tax purposes or (iii) the Trust would be subject to more than a de
minimis amount of other taxes, duties or other governmental charges, which
change or amendment becomes effective on or after February 4, 1997. See "Risk
Factors--Possible Tax Law Changes."
After the date for any distribution of Junior Subordinated Notes upon
termination of the Trust, (i) the Capital Securities and the Capital
Securities Guarantee will no longer be deemed to be outstanding, (ii) the
depositary or its nominee, as the record holder of the Capital Securities,
will receive a registered global certificate or certificates representing the
Junior Subordinated Notes to be delivered upon such distribution and (iii) any
certificates representing Capital Securities and the Capital Securities
Guarantee not held by the depositary or its nominee will be deemed to
represent Junior Subordinated Notes having an aggregate principal amount equal
to the aggregate stated liquidation amount of, with an interest rate identical
to the Securities Rate of, and accrued and unpaid interest equal to accrued
and unpaid distributions on, such Capital Securities, until such certificates
are presented to Capital or its agent for transfer or reissuance.
There can be no assurance as to the market prices for the Capital Securities
or the Junior Subordinated Notes that may be distributed in exchange for the
Capital Securities if a termination and liquidation of the Trust were to
occur. Accordingly, the Capital Securities that an investor may purchase, or
the Junior Subordinated Notes that the investor may receive on termination and
liquidation of the Trust, may trade at a discount to the price that the
investor paid to purchase the Capital Securities offered hereby.
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REDEMPTION PROCEDURES
In the event that fewer than all of the Trust Securities are to be redeemed,
then the aggregate liquidation amount of the Trust Securities to be redeemed
shall be allocated 97% to the Capital Securities and 3% to the Common
Securities.
The Capital Securities redeemed on each redemption date shall be redeemed at
the applicable Redemption Price with the proceeds from the contemporaneous
redemption of the Junior Subordinated Notes. The Redemption Price of Capital
Securities shall be deemed payable on each redemption date only to the extent
that the Trust has funds legally and immediately available for payment of such
Redemption Price.
If the Property Trustee gives a notice of redemption in respect of Capital
Securities (which notice will be irrevocable), then, by 2:00 P.M., New York
City time, on the redemption date, subject to the immediately preceding
paragraph, the Property Trustee will irrevocably deposit with the securities
depositary, so long as the Capital Securities are in book-entry only form,
sufficient funds to pay the applicable Redemption Price. See""--Form,
Denomination, Book-Entry Procedures and Transfer" below. If the Capital
Securities are not in book-entry only form, the Property Trustee, subject to
the immediately preceding paragraph, shall irrevocably deposit with the Paying
Agent funds sufficient to pay the applicable Redemption Price and will give
the Paying Agent irrevocable instructions to pay the Redemption Price to the
holders thereof upon surrender of their Capital Securities certificates. If
notice of redemption shall have been given and funds deposited as required,
then immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue and all rights of holders of such Capital
Securities so called for redemption will cease, except the right of the
holders of such Capital Securities to receive the applicable Redemption Price,
but without interest on such Redemption Price. In the event that any date
fixed for redemption of Capital Securities is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the Redemption Price in
respect of Capital Securities is improperly withheld or refused and not paid
either by the Trust or by Southern pursuant to the Capital Securities
Guarantee or the Notes Guarantee, distributions on such Capital Securities
will continue to accrue at the then applicable rate, from such redemption date
originally established by the Trust for such Capital Securities to the date
such Redemption Price is actually paid. See "--Events of Default" below,
"Relationship Among the Capital Securities, the Junior Subordinated Notes, the
Capital Securities Guarantee and the Notes Guarantee" and "Description of the
Exchange Capital Securities Guarantee--Events of Default."
Subject to the foregoing and to applicable law (including, without
limitation, United States federal securities laws), Southern, Capital or any
of their affiliates may, at any time and from time to time, purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
The Exchange Capital Securities will be issued in blocks having a
liquidation amount of not less than $1,000 and may be transferred or exchanged
in such blocks in the manner and at the offices described below. The Exchange
Capital Securities initially will be represented by one or more Capital
Securities in registered, global form (collectively, the "Global Capital
Securities"). The Global Capital Securities will be deposited upon issuance
with the Property Trustee as custodian for DTC, in New York, New York, and
registered in the name of DTC or its nominee, in each case for credit to an
account of a direct or indirect participant in DTC as described below.
Except as set forth below, the Global Capital Securities may be transferred,
in whole and not in part, only to another nominee of DTC or to a successor of
DTC or its nominee. Beneficial interests in the Global Capital Securities may
not be exchanged for Capital Securities in certificated form except in the
limited circumstances described below.
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Transfers of beneficial interests in the Global Capital Securities will be
subject to the applicable rules and procedures of DTC and its direct or
indirect participants (including, if applicable, those of the Euroclear System
("Euroclear") and Cedel Bank, societe anonyme ("Cedel Bank")), which may
change from time to time.
Depositary Procedures
DTC has advised Southern, Capital and the Trust that DTC is a limited-
purpose trust company created to hold securities for its participants
("Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic book-
entry changes in accounts of its Participants. The Participants include
securities brokers and dealers (including the Initial Purchasers), banks,
trust companies, clearing corporations and certain other organizations. Access
to DTC's system is also available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "Indirect Participants"). Persons who are not Participants may
beneficially own securities held by or on behalf of DTC only through the
Participants or the Indirect Participants. The ownership interest and transfer
of ownership interest of each actual purchaser of each security held by or on
behalf of DTC are recorded on the records of the Participants and Indirect
Participants.
DTC has also advised Southern, Capital and the Trust that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital
Securities, DTC will credit the accounts of Participants designated by the
Initial Purchasers with portions of the liquidation amount of the Global
Capital Securities and (ii) ownership of such interests in the Global Capital
Securities will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect to the
Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Capital
Securities).
Southern and Capital understand that under existing industry practices, if
either Capital or the Property Trustee requests any action of holders of
Capital Securities or if an owner of an interest in the Capital Securities
desires to give or take any action that a holder is entitled to give or take,
DTC would authorize the Participants owning the relevant interests in the
Capital Securities to give or take such action, and such Participants would
authorize Indirect Participants to give or take such action or would otherwise
act upon the instructions of owners of interests in such Capital Securities
holding through them.
Investors in the Global Capital Securities may hold their interests therein
directly through DTC if they are participants in such system, or indirectly
through organizations (including Euroclear and Cedel Bank) which are
participants in such system. Euroclear and Cedel Bank will hold interests in
the Global Capital Securities on behalf of their participants through
customers' securities accounts in their respective names on the books of their
respective depositaries, which are Morgan Guaranty Trust Company of New York,
Brussels office, as operator of Euroclear, and Citibank, N.A., as facilitator
for Cedel Bank's access to DTC. The depositaries, in turn, will hold such
interests in the Global Capital Securities in customers' securities accounts
in the depositaries' names on the books of DTC. All interests in a Global
Capital Security, including those held through Euroclear or Cedel Bank, may be
subject to the procedures and requirements of DTC. Those interests held
through Euroclear or Cedel Bank may also be subject to the procedures and
requirements of such system. The laws of some states require that certain
persons take physical delivery in certificated form of securities that they
own. Consequently, the ability to transfer beneficial interests in a Global
Capital Security to such persons will be limited to that extent. Because DTC
can act only on behalf of Participants, which in turn act on behalf of
Indirect Participants and certain banks, the ability of a person having
beneficial interests in a Global Capital Security to pledge such interests to
persons or entities that do not participate in the DTC system, or otherwise
take actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests.
Except as described below, owners of interests in the Global Capital
Securities will not have Capital Securities registered in their name, will not
receive physical delivery of Capital Securities in certificated form and will
not be considered the registered owners or holders thereof under the Trust
Agreement for any purpose.
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Payments in respect of the Global Capital Security registered in the name of
DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Trust Agreement. Under the terms
of the Trust Agreement, the Property Trustee will treat the persons in whose
names the Capital Securities, including the Global Capital Securities, are
registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently, neither the
Administrative Trustees, Property Trustee nor any agent of either thereof has
or will have any responsibility or liability for (i) any aspect of DTC's
records or any Participant's or Indirect Participant's records relating to or
payments made on account of beneficial ownership interests in the Global
Capital Securities, or for maintaining, supervising or reviewing any of DTC's
records or any Participant's or Indirect Participant's records relating to the
beneficial ownership interests in the Global Capital Securities or (ii) any
other matter relating to the actions and practices of DTC or any of its
Participants or Indirect Participants. DTC has advised Southern, Capital and
the Trust that its current practice, upon receipt of any payment in respect of
securities such as the Capital Securities, is to credit the accounts of the
relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in liquidation amount of beneficial
interests in the relevant security as shown on the records of DTC unless DTC
has reason to believe it will not receive payment on such payment date.
Payments by the Participants and the Indirect Participants to the beneficial
owners of Capital Securities will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee, the Trust, Southern or Capital. Neither the Trust, Southern, Capital
nor the Property Trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the Capital Securities,
and the Trust, Southern, Capital and the Property Trustee may conclusively
rely on and will be protected in relying on instructions from DTC or its
nominee for all purposes.
Except for trades involving only Euroclear and Cedel Bank participants,
interests in the Global Capital Securities will trade in DTC's Same-Day Funds
Settlement System and secondary market trading activity in such interests will
therefore settle in immediately available funds, subject in all cases to the
rules and procedures of DTC and its participants.
Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
participants in Euroclear and Cedel Bank will be effected in the ordinary way
in accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
Capital Securities described herein, cross-market transfers between the
Participants in DTC, on the one hand, and Euroclear and Cedel Bank
participants, on the other hand, will be effected through DTC in accordance
with DTC's rules on behalf of Euroclear or Cedel Bank, as the case may be, by
its respective depositary; however, such cross-market transactions will
require delivery of instructions to Euroclear or Cedel Bank, as the case may
be, by the counterparty in such system in accordance with the rules and
procedures and within the established deadlines (Brussels time) of such
system. Euroclear or Cedel Bank, as the case may be, will, if the transaction
meets its settlement requirements, deliver instructions to its respective
depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant Global Capital Securities in
DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Euroclear participants and Cedel
Bank participants may not deliver instructions directly to the depositaries
for Euroclear and Cedel Bank.
Because of time zone differences, the securities account of a Euroclear or
Cedel Bank participant purchasing an interest in a Global Capital Security
from a participant in DTC will be credited, and any such crediting will be
reported to the relevant Euroclear or Cedel Bank participant, during the
securities settlement processing day (which must be a business day for
Euroclear or Cedel Bank) immediately following the settlement date of DTC.
Cash received in Euroclear or Cedel Bank as a result of sales of interests in
a Global Capital Security by or through a Euroclear or Cedel Bank participant
to a Participant in DTC will be received with value on the settlement date of
DTC but will be available in the relevant Euroclear or Cedel Bank cash account
only as of the business day for Euroclear or Cedel Bank following DTC's
settlement date.
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DTC has advised Southern, Capital and the Trust that it will take any action
permitted to be taken by a holder of Capital Securities only at the direction
of one or more Participants to whose account with DTC interests in the Global
Capital Securities are credited and only in respect of such portion of the
liquidation amount of the Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event
of Default under the Trust Agreement, DTC reserves the right to exchange the
Global Capital Securities for Capital Securities in certificated form and to
distribute such Capital Securities to its Participants.
The information in this section concerning DTC, Euroclear and Cedel Bank and
their book-entry systems has been obtained from sources that Southern, Capital
and the Trust believe to be reliable, but neither Southern, Capital nor the
Trust takes responsibility for the accuracy thereof.
Although DTC, Euroclear and Cedel Bank have agreed to the foregoing
procedures to facilitate transfers of interest in the Global Capital
Securities among participants in DTC, Euroclear and Cedel Bank, they are under
no obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. Neither Southern, Capital, the
Trust nor the Property Trustee will have any responsibility for the
performance by DTC, Euroclear and Cedel Bank or their respective participants
or indirect participants of their respective obligations under the rules and
procedures governing their operations.
Euroclear and Cedel Bank
Euroclear and Cedel Bank each hold securities for their account holders and
facilitate the clearance and settlement of securities transactions by
electronic book-entry transfer between their respective account holders,
thereby eliminating the need for physical movements of certificates and any
risk from lack of simultaneous transfers of securities.
Euroclear and Cedel Bank provide various services including safekeeping,
administration, clearance and settlement of internationally traded securities
lending and borrowing. Euroclear and Cedel Bank also deal with domestic
securities markets in several countries through established depositary and
custodial relationships. Euroclear and Cedel Bank have established an
electronic bridge between their two systems across which their respective
account holders may settle trades with each other.
Account holders in Euroclear and Cedel Bank are world-wide financial
institutions, including underwriters, securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to Euroclear and
Cedel Bank is available to other institutions that clear through or maintain a
custodial relationship with an account holder of either system.
Account holders' overall contractual relations with Euroclear and Cedel Bank
are governed by the respective rules and operating procedures of Euroclear and
Cedel Bank and any applicable laws. Euroclear and Cedel Bank act under such
rules and operating procedures only on behalf of their respective account
holders and have no record of or relationship with persons holding through
their respective account holders.
Exchange of Book-Entry Capital Securities for Certificated Exchange Capital
Securities
A Global Capital Security is exchangeable for Exchange Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor Depositary within 90 days
or (y) has ceased to be a clearing agency registered under the Exchange Act,
(ii) Capital in its sole discretion elects to cause the issuance of the
Exchange Capital Securities in certificated form or (iii) there shall have
occurred and be continuing an Event of Default or any event which after notice
or lapse of time or both would be an Event of Default under the Trust
Agreement. In addition, beneficial interests in a Global Capital Security may
be exchanged for certificated Exchange Capital Securities upon request but
only upon at least 20 days' prior written notice given to the Property Trustee
by or on behalf of DTC in accordance with customary procedures. In all cases,
certificated Exchange Capital Securities delivered in exchange for any Global
Capital Security or beneficial interests therein
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will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the Depositary (in accordance with its customary
procedures).
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the Trust Agreement, the Trust shall terminate on December 31,
2042, or earlier upon (i) the occurrence of a Bankruptcy Event (as defined in
the Trust Agreement) in respect of Capital, dissolution or liquidation of
Capital, or dissolution of the Trust pursuant to a judicial decree; (ii) the
distribution of the Junior Subordinated Notes to the holders of the Trust
Securities in liquidation of the Trust (see "--Special Event Redemption or
Distribution" above); or (iii) the payment at maturity or redemption of all of
the Junior Subordinated Notes, and the consequent payment of the Trust
Securities.
If an early termination occurs as described in clause (i) or (ii) above, the
Trust shall be liquidated, and the Property Trustee shall distribute to each
holder of Capital Securities and Common Securities a like amount of Junior
Subordinated Notes, unless in the case of an event described in clause (i)
such distribution is determined by the Administrative Trustees not to be
practical, in which event such holders will be entitled to receive, out of the
assets of the Trust available for distribution to holders after satisfaction
of liabilities to creditors, an amount equal to the aggregate of the stated
liquidation preference of $1,000 per Trust Security plus accrued and unpaid
distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then subject to the next succeeding
sentence, the amounts payable directly by the Trust on the Trust Securities
shall be paid on a pro rata basis. The holder of the Common Securities will be
entitled to receive distributions upon any such dissolution pro rata with the
holders of the Capital Securities, except that if a Subordinated Note
Indenture Event of Default has occurred and is continuing, the holders of
Capital Securities shall have a preference over the holders of Common
Securities.
EVENTS OF DEFAULT
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement ("Trust Agreement Event of Default") with respect to the Trust
Securities issued thereunder (whatever the reason for such Event of Default,
and whether it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(i) the occurrence of an "Event of Default" as defined in Section 501 of
the Subordinated Note Indenture ("Subordinated Note Indenture Event of
Default") (see "Description of the Exchange Junior Subordinated Notes--
Events of Default"); or
(ii) default by the Trust in the payment of any distribution when it
becomes due and payable, and the continuation of such default for a period
of 30 days; or
(iii) default by the Trust in the payment of any Redemption Price of any
Capital Security or Common Security when it becomes due and payable; or
(iv) default in the performance, or breach, of any covenant or warranty
of the Securities Trustees in the Trust Agreement (other than a covenant or
warranty a default in the performance of which or the breach of which is
dealt with in clause (ii) or (iii) above), and continuation of such default
or breach for a period of 60 days after there has been given, by registered
or certified mail, to such Securities Trustees by the holders of at least
10% in liquidation amount of the outstanding Capital Securities a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" under the Trust
Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Trust.
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Within 90 days after the occurrence of any Trust Agreement Event of Default,
the Property Trustee shall transmit notice of any default known to the
Property Trustee to the holders of Trust Securities, Southern and Capital,
unless such Trust Agreement Event of Default shall have been cured or waived.
If a Trust Agreement Event of Default occurs and is continuing, then,
pursuant to the Trust Agreement, holders of a majority in aggregate
liquidation amount of Capital Securities have the right to direct the exercise
of any trust or power conferred upon the Property Trustee under the Trust
Agreement, including the right to direct the Property Trustee under the Trust
Agreement to exercise the remedies available to it as holder of the Junior
Subordinated Notes and the Notes Guarantee. If the Property Trustee fails to
enforce its rights under the Junior Subordinated Notes and the Notes
Guarantee, a holder of Capital Securities may, to the fullest extent permitted
by applicable law, institute a legal proceeding directly against Southern and
Capital to enforce its rights under the Trust Agreement without first
instituting any legal proceeding against the Property Trustee or the Trust.
Notwithstanding the foregoing, a holder of Capital Securities may institute a
legal proceeding directly against Southern and Capital, without first
instituting a legal proceeding against the Property Trustee or any other
person or entity, for enforcement of payment to such holder of principal of or
interest on the Junior Subordinated Notes having a principal amount equal to
the aggregate stated liquidation amount of the Capital Securities of such
holder on or after the due dates specified in the Junior Subordinated Notes.
See "Relationship Among the Capital Securities, the Junior Subordinated Notes,
the Capital Securities Guarantee and the Notes Guarantee" and "Description of
the Exchange Capital Securities Guarantee--Events of Default."
Unless a Subordinated Note Indenture Event of Default shall have occurred
and be continuing, the Securities Trustees may be removed at any time by act
of the holder of the Common Securities. If a Subordinated Note Indenture Event
of Default has occurred and is continuing, any Securities Trustee may be
removed at such time by act of the holders of a majority in liquidation amount
of the Capital Securities, delivered to the appropriate Securities Trustee (in
its individual capacity and on behalf of the Trust). No resignation or removal
of any Securities Trustee and no appointment of a successor shall be effective
until the acceptance of appointment by the successor Trustee in accordance
with the requirements of the Trust Agreement.
If a Subordinated Note Indenture Event of Default has occurred and is
continuing, the holders of Capital Securities shall have a preference over the
holders of Common Securities upon dissolution of the Trust as described above.
See "--Liquidation Distribution Upon Dissolution."
VOTING RIGHTS
Except as provided below and under "Description of the Exchange Capital
Securities Guarantee--Amendments and Assignment" and as otherwise required by
law and the Trust Agreement, the holders of the Capital Securities will have
no voting rights.
If any proposed amendment to the Trust Agreement provides for, or the
Securities Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Capital
Securities, whether by way of amendment to the Trust Agreement or otherwise,
or (ii) the dissolution, winding-up or termination of the Trust, other than
pursuant to the Trust Agreement, then the holders of outstanding Capital
Securities will be entitled to vote as a class on such amendment or proposal
of the Securities Trustees, and such amendment or proposal shall not be
effective except with the approval of the holders of at least 66 2/3% in
liquidation amount of such outstanding Capital Securities.
So long as any Junior Subordinated Notes are held by the Property Trustee,
the Securities Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee
(as defined herein), or executing any trust or power conferred on the
Indenture Trustee with respect to the Junior Subordinated Notes, (ii) waive
any past default which is waivable under the applicable provisions of the
Subordinated Note Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Junior Subordinated Notes shall be
due and payable, or (iv) consent to any amendment, modification or termination
of the Subordinated Note Indenture or the Junior Subordinated Notes, where
such consent shall be
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required, or to any other action, as the holder of the Junior Subordinated
Notes, under the Subordinated Note Indenture, without, in each case, obtaining
the prior approval of the holders of at least 66 2/3% in liquidation amount of
the outstanding Capital Securities; provided, however, that where a consent
under the Subordinated Note Indenture would require the consent of each holder
of Junior Subordinated Notes affected thereby, no such consent shall be given
by the Securities Trustees without the prior consent of each holder of Capital
Securities. The Securities Trustees shall not revoke any action previously
authorized or approved by a vote of the holders of the Capital Securities,
except pursuant to a subsequent vote of such holders. The Property Trustee
shall notify all holders of the Capital Securities of any notice of default
received from the Indenture Trustee with respect to the Junior Subordinated
Notes. In addition to obtaining the foregoing approvals of the holders of the
Capital Securities, prior to taking any of the foregoing actions, the
Securities Trustees shall obtain an opinion of counsel experienced in such
matters to the effect that the Trust will not be classified as other than a
grantor trust for federal income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given at a
separate meeting of holders of Capital Securities convened for such purpose or
pursuant to written consent. The Administrative Trustees will cause a notice
of any meeting at which holders of Capital Securities are entitled to vote to
be given to each holder of record of Capital Securities in the manner set
forth in the Trust Agreement.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned by Southern, Capital, the Securities Trustees or any
affiliate of Southern, Capital or any Securities Trustee, shall, for purposes
of such vote or consent, be treated as if they were not outstanding.
CO-PROPERTY TRUSTEES AND SEPARATE PROPERTY TRUSTEE
At any time or times, for the purpose of meeting the legal requirements of
the 1939 Act or of any jurisdiction in which any part of the Trust Property
(as defined in the Trust Agreement) may at the time be located, the holder of
the Common Securities and the Property Trustee shall have power to appoint,
and upon the written request of the Property Trustee, Capital, as Depositor,
shall for such purpose join with the Property Trustee in the execution,
delivery and performance of all instruments and agreements necessary or proper
to appoint, one or more persons approved by the Property Trustee either to act
as co-property trustee, jointly with the Property Trustee, of all or any part
of such Trust Property, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such person or persons in such capacity, any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the Trust Agreement. If Capital, as Depositor, does not join in
such appointment within 15 days after the receipt by it of a request so to do,
or in case a Subordinated Note Indenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment.
AMENDMENT OF THE TRUST AGREEMENT
The Trust Agreement may be amended from time to time by Capital and the
Securities Trustees without the consent of the holders of the Trust Securities
(i) to cure any ambiguity, correct or supplement any provision therein which
may be inconsistent with any other provision therein, or to make any other
provisions with respect to matters or questions arising under the Trust
Agreement, which shall not be inconsistent with the other provisions of the
Trust Agreement, provided that the amendment does not adversely affect in any
material respect the interests of any holder of Trust Securities, or (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as shall be necessary to ensure that the Trust will not be classified
as other than a grantor trust for federal income tax purposes. Except as
provided in the succeeding paragraph, other amendments to the Trust Agreement
may be made (i) upon approval of the holders of not less than 66 2/3% in
aggregate liquidation amount of the Trust Securities then outstanding and (ii)
upon receipt by the Securities Trustees of an opinion of counsel to the effect
that such amendment will not affect the Trust's status as a grantor trust or
the Trust's exemption from the 1940 Act.
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Notwithstanding the foregoing, without the consent of each affected holder
of Trust Securities, the Trust Agreement may not be amended to (i) change the
amount or timing of any distribution on the Trust Securities or otherwise
adversely affect the amount of any distribution required to be made in respect
of the Trust Securities as of a specified date, (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date, or (iii) change the consent required to amend
the Trust Agreement.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described below. The Trust may at the request of Capital, with the consent of
the Administrative Trustees and without the consent of the holders of the
Trust Securities, consolidate, amalgamate, merge with or into, or be replaced
by a trust organized as such under the laws of any state; provided, that (i)
such successor entity either (x) expressly assumes all of the obligations of
the Trust with respect to the Trust Securities or (y) substitutes for the
Capital Securities other securities having substantially the same terms as the
Trust Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Trust Securities rank in priority with respect
to distributions and payments upon liquidation, redemption and otherwise, (ii)
Capital expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the Junior
Subordinated Notes, (iii) the Capital Securities or any Successor Securities
are listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on which
the Capital Securities are then listed, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Capital Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation
or replacement does not adversely affect the rights, preferences and
privileges of the holders of the Trust Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
substantially identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation or replacement, Southern has received an opinion
of counsel to the effect that (A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges
of the holders of the Trust Securities (including any Successor Securities) in
any material respect, and (B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor such successor entity will
be required to register as an investment company under the 1940 Act, and
(viii) Southern guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Capital Securities
Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the
consent of holders of 100% in liquidation amount of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger or replacement
would cause the Trust or the successor entity to be classified as other than a
grantor trust for federal income tax purposes.
Any corporation or other body into which any of the Property Trustee, the
Delaware Trustee or any Administrative Trustee that is not a natural person
may be merged or converted or with which it may be consolidated, or any
corporation or other body resulting from any merger, conversion or
consolidation to which any such Securities Trustee shall be a party, or any
corporation or other body succeeding to all or substantially all the corporate
trust business of any such Securities Trustee, shall be the successor of such
Securities Trustee under the Trust Agreement, provided such corporation is
otherwise qualified and eligible under the Trust Agreement.
PAYMENT AND PAYING AGENT
So long as DTC is acting as securities depositary for the Capital
Securities, payments in respect of the Capital Securities in global form shall
be made to DTC, which is to credit the relevant accounts at DTC on the
applicable Distribution Dates. If the Capital Securities are not held by DTC,
such payments shall be made by check mailed to the address of the holder
entitled thereto as such address shall appear on the Securities Register
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(as such term is defined in the Trust Agreement). The Paying Agent shall
initially be the Property Trustee. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Administrative
Trustees and Capital. In such event, the Administrative Trustees shall appoint
a successor to act as Paying Agent.
RESTRICTIONS ON TRANSFER
The Exchange Capital Securities will be issued, and may be transferred only
in minimum denominations of not less than $1,000 and multiples of $1,000 in
excess thereof. Any transfer, sale or other disposition of Exchange Capital
Securities in a denomination of less than $1,000 shall be deemed to be void
and of no legal effect whatsoever. Any such transferee shall be deemed not to
be the holder of such Exchange Capital Securities for any purpose, including
but not limited to the receipt of distributions on such Exchange Capital
Securities, and such transferee shall be deemed to have no interest whatsoever
in such Exchange Capital Securities.
REGISTRAR AND TRANSFER AGENT
It is anticipated that the Property Trustee, or one of its affiliates, will
act as registrar and transfer agent (the "Securities Registrar") for the
Capital Securities.
Registration of transfers of Capital Securities will be effected without
charge by or on behalf of the Trust, but upon payment in respect of any tax or
other governmental charges which may be imposed in relation to it.
The Securities Registrar will not be required to register or cause to be
registered any transfer of Capital Securities after they have been called for
redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a Trust Agreement Event of
Default with respect to the Trust Securities, undertakes to perform only such
duties as are specifically set forth in the Trust Agreement 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 Property Trustee is under no obligation to exercise any of the powers
vested in it by the Trust Agreement at the request of any holder of Capital
Securities, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby.
Bankers Trust Company, the Property Trustee, also serves as Indenture
Trustee and Guarantee Trustee. Southern and certain of its subsidiaries
maintain deposit accounts and banking relationships with Bankers Trust
Company. Bankers Trust Company serves as trustee under other indentures
pursuant to which securities of subsidiaries of Southern are outstanding.
GOVERNING LAW
The Trust Agreement and the Trust Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware;
provided that the immunities and standard of care of the Property Trustee
shall be governed by New York law.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to operate the Trust
so that the Trust will not be deemed to be an "investment company" required to
be registered under the 1940 Act or taxed as other than a grantor trust for
federal income tax purposes and so that the Junior Subordinated Notes will be
treated as indebtedness of Capital for federal income tax purposes. In this
connection, the Administrative Trustees and Capital are authorized to take any
action, not inconsistent with applicable law, the Trust's certificate of trust
or the Trust Agreement, that the Administrative Trustees and Capital determine
in their discretion to be necessary or desirable for such purposes, as long as
such action does not materially and adversely affect the interests of the
holders of the Capital Securities.
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DESCRIPTION OF THE EXCHANGE JUNIOR SUBORDINATED NOTES
Set forth below is a description of the terms of the Exchange Junior
Subordinated Notes. The following description does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the
Subordinated Note Indenture, dated as of February 1, 1997, among Capital,
Southern and Bankers Trust Company, as trustee (the "Indenture Trustee"), as
supplemented by a supplemental indenture thereto (the Subordinated Note
Indenture, as so supplemented, is hereinafter referred to as the "Subordinated
Note Indenture"), which Indenture and Supplemental Indenture are filed as
exhibits to the Registration Statement of which this Prospectus is a part. The
Subordinated Note Indenture has been qualified as an indenture under the 1939
Act. The terms of the Junior Subordinated Notes will include those stated in
the Subordinated Note Indenture and those made a part of the Subordinated Note
Indenture by reference to the 1939 Act. Certain capitalized terms used herein
are defined in the Subordinated Note Indenture.
GENERAL
Concurrently with the issuance of the Common Securities and the Original
Capital Securities, the Trust invested the proceeds thereof in the Original
Junior Subordinated Notes issued by the Trust.
The Original Junior Subordinated Notes were issued and the Exchange Junior
Subordinated Notes will be issued as a series of junior subordinated notes
under the Subordinated Note Indenture. The Junior Subordinated Notes will be
limited in aggregate principal amount to $335,052,000, such amount being the
approximate aggregate liquidation amount of the Trust Securities.
The entire principal amount of the Junior Subordinated Notes will mature and
become due and payable, together with any accrued and unpaid interest thereon,
including Additional Interest, if any, on February 1, 2037, subject to
Capital's right to advance such maturity as described below. The Junior
Subordinated Notes are not subject to any sinking fund provision.
The terms of the Junior Subordinated Notes correspond to those of the
Capital Securities, as described herein.
The Subordinated Note Indenture does not contain provisions that afford
holders of Junior Subordinated Notes protection in the event of a highly
leveraged transaction involving Southern or Capital.
CONDITIONAL RIGHT TO ADVANCE MATURITY
If a Tax Event occurs, Capital will have the right (a) prior to the
dissolution of the Trust, to advance the stated maturity of the Junior
Subordinated Notes to the minimum extent required, but not less than 19 and
one-half years from the date of original issuance thereof, or (b) to direct
the Property Trustee to dissolve the Trust (if not previously dissolved) and
advance the stated maturity of the Junior Subordinated Notes to the minimum
extent required, but not less than 19 and one-half years from the date of
original issuance thereof, in each case such that in the opinion of counsel to
Capital experienced in such matters, after advancing the stated maturity,
interest paid on the Junior Subordinated Notes will be deductible for federal
income tax purposes.
SUBORDINATION
The Junior Subordinated Notes are subordinated and junior in right of
payment to all Senior Indebtedness (as defined below) of Capital. No payment
of principal of (including redemption payments, if any), or premium, if any,
or interest on (including Additional Interest (as defined herein)) the Junior
Subordinated Notes may be made if (a) any Senior Indebtedness is not paid when
due and any applicable grace period with respect to such default has ended
with such default not being cured or waived or otherwise ceasing to exist, or
(b) the maturity of any Senior Indebtedness has been accelerated because of a
default, or (c) notice has been given of the exercise of an option to require
repayment, mandatory payment or prepayment or otherwise. Upon any payment or
distribution of assets of Capital to creditors upon any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors, marshalling of assets or liabilities, or any bankruptcy, insolvency
or
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similar proceedings of Capital, the holders of Senior Indebtedness shall be
entitled to receive payment in full of all amounts due or to become due on or
in respect of all Senior Indebtedness before the holders of the Junior
Subordinated Notes are entitled to receive or retain any payment or
distribution. Subject to the prior payment of all Senior Indebtedness, the
rights of the holders of the Junior Subordinated Notes will be subrogated to
the rights of the holders of Senior Indebtedness to receive payments and
distributions applicable to such Senior Indebtedness until all amounts owing
on the Junior Subordinated Notes are paid in full.
The term "Senior Indebtedness" means, with respect to any person, (i) any
payment due in respect of indebtedness of such person, whether outstanding at
the date of execution of the Subordinated Note Indenture or thereafter
incurred, created or assumed, (a) in respect of money borrowed (including any
financial derivative, hedging or futures contract or similar instrument) and
(b) evidenced by securities, debentures, bonds, notes or other similar
instruments issued by such person that, by their terms, are senior or senior
subordinated debt securities; (ii) all capital lease obligations; (iii) all
obligations issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all obligations of such person under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business and long-term purchase obligations); (iv) all
obligations for the reimbursement of any letter of credit, banker's
acceptance, security purchase facility or similar credit transaction; (v) all
obligations of the type referred to in clauses (i) through (iv) above of other
persons the payment of which such person is responsible or liable as obligor,
guarantor or otherwise; and (vi) all obligations of the type referred to in
clauses (i) through (v) above of other persons secured by any lien on any
property or asset of such person (whether or not such obligation is assumed by
such person), except for (1) any such indebtedness that is by its terms
subordinated to or pari passu with the Junior Subordinated Notes and (2) any
unsecured indebtedness between or among such person or its affiliates. Such
Senior Indebtedness shall continue to be Senior Indebtedness and be entitled
to the benefits of the subordination provisions contained in the Subordinated
Note Indenture irrespective of any amendment, modification or waiver of any
term of such Senior Indebtedness.
The Subordinated Note Indenture does not limit the aggregate amount of
Senior Indebtedness that may be issued by Capital. Capital currently has no
Senior Indebtedness outstanding.
OPTIONAL REDEMPTION
Capital shall have the right to redeem the Junior Subordinated Notes, (i) in
whole or in part, from time to time, on or after February 1, 2007, or (ii) at
any time in whole upon the occurrence of a Special Event as described under
"Description of the Exchange Capital Securities--Special Event Redemption or
Distribution," upon not less than 30 nor more than 60 days' notice, at the
applicable Redemption Price described below.
The Redemption Price, in the case of a redemption under (i) above, shall
equal the following prices, expressed in percentages of the principal amount
of the Junior Subordinated Notes being redeemed, plus accrued and unpaid
interest thereon to the date of redemption, if redeemed during the 12-month
period beginning February 1 of the years indicated:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2007.............................. 104.0950%
2008.............................. 103.6855
2009.............................. 103.2760
2010.............................. 102.8665
2011.............................. 102.4570
2012.............................. 102.0475
2013.............................. 101.6380
2014.............................. 101.2285
2015.............................. 100.8190
2016.............................. 100.4095
</TABLE>
and at 100% on or after February 1, 2017.
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The Redemption Price, in the case of a redemption prior to February 1, 2007
upon the occurrence of a Special Event as described under (ii) above, shall
equal the Make-Whole Amount (as defined under "Description of the Exchange
Capital Securities--Redemption") plus accrued and unpaid interest thereon to
the date of redemption.
INTEREST
Each Junior Subordinated Note shall bear interest at the Securities Rate
from February 4, 1997, payable semi-annually in arrears on February 1 and
August 1 of each year to the person in whose name such Junior Subordinated
Note is registered at the close of business on the fifteenth calendar day
prior to such payment date. The amount of interest payable will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on the Junior Subordinated Notes is not a
Business Day, then payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Capital shall have the right at any time, and from time to time, to defer
payments of interest on the Junior Subordinated Notes by extending the
interest payment period for up to 10 consecutive semi-annual periods, but not
beyond the maturity date. At the end of an Extension Period, Capital shall pay
all interest then accrued and unpaid (including any Additional Interest)
(together with interest thereon at the Securities Rate compounded semi-
annually to the extent permitted by applicable law); provided, that if Capital
shall have given notice of its election to select an Extension Period, subject
to the exceptions described under "--Certain Covenants" below, (a) neither
Southern nor Capital shall declare or pay any dividend or distribution on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any
of its capital stock or make any guarantee payments with respect to the
foregoing, and (b) neither Southern nor Capital shall make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by it which rank pari passu with or junior to the
Junior Subordinated Notes or the Notes Guarantee. Prior to the termination of
any Extension Period, Capital may further defer payments of interest by
extending the interest payment period, provided that such Extension Period,
together with all such previous and further extensions thereof, may not exceed
10 consecutive semi-annual periods. Upon the termination of any Extension
Period and the payment of all amounts then due, Capital may select a new
Extension Period, subject to the above requirements. Capital has no present
intention of exercising its rights to defer payments of interest by extending
the interest payment period on the Junior Subordinated Notes. See "Certain
Federal Income Tax Considerations--Original Issue Discount."
Capital shall give the holder or holders of the Junior Subordinated Notes
and the Indenture Trustee notice of its selection or extension of an Extension
Period at least one Business Day prior to the earlier of (i) the record date
relating to the interest payment date on which the Extension Period is to
commence or relating to the interest payment date on which an Extension Period
that is being extended would otherwise terminate or (ii) the date Capital or
the Trust is required to give notice to any applicable self-regulatory
organization of the record date or the date such distributions are payable.
ADDITIONAL INTEREST
"Additional Interest" is defined in the Subordinated Note Indenture as (i)
such additional amounts as may be required so that the net amounts received
and retained by a holder of Junior Subordinated Notes (if the holder is a
Trust) after paying taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States or
any other taxing authority will not be less than the amounts the holder would
have received had no such taxes, duties, assessments, or other governmental
charges been imposed; and (ii) any interest due and not paid on an interest
payment date, together with interest thereon from such interest payment date
to the date of payment, compounded semi-annually, on each interest payment
date.
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NOTES GUARANTEE
Pursuant to the Subordinated Note Indenture, Southern will irrevocably and
unconditionally guarantee the Junior Subordinated Notes as described under
"Description of the Exchange Notes Guarantee."
CERTAIN COVENANTS
Southern and Capital each covenants in the Subordinated Note Indenture, for
the benefit of the holders of each series of Junior Subordinated Notes, that,
(i) if at such time Capital shall have given notice of its election to extend
an interest payment period for such series of Junior Subordinated Notes and
such extension shall be continuing, (ii) if at such time Southern shall be in
default with respect to its payment or other obligations under (A) the Capital
Securities Guarantee with respect to the Trust Securities, if any, related to
such series of Junior Subordinated Notes or (B) the Notes Guarantee, if any,
related to such series of Junior Subordinated Notes, or (iii) if at such time
an Event of Default thereunder with respect to such series of Junior
Subordinated Notes shall have occurred and be continuing, (a) neither Southern
nor Capital shall declare or pay any dividend or make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, and (b) neither Southern nor Capital
shall make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by it which rank pari passu
with or junior to the Junior Subordinated Notes or the Notes Guarantee. None
of the foregoing, however, shall restrict (i) any of the actions described in
the preceding sentence resulting from any reclassification of Southern's or
Capital's capital stock or the exchange or conversion of one class or series
of Southern's or Capital's capital stock for another class or series of
Southern's or Capital's capital stock, (ii) the purchase of fractional
interests in shares of Southern's or Capital's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iii) dividends, payments or distributions payable in
shares of capital stock, (iv) redemptions, purchases or other acquisitions of
shares of capital stock in connection with any employment contract, incentive
plan, benefit plan or other similar arrangement of Southern or any of its
subsidiaries or in connection with a dividend reinvestment or stock purchase
plan, or (v) any declaration of a dividend in connection with implementation
of any stockholders' rights plan, or the issuance of rights, stock or other
property under any such plan, or the redemption, repurchase or other
acquisition of any such rights pursuant thereto.
The Subordinated Note Indenture further provides that, for so long as the
Trust Securities of any Trust remain outstanding, Capital covenants (i) to
directly or indirectly maintain 100% ownership of the Common Securities of
such Trust; provided, however, that any permitted successor of Capital or
Southern under the Subordinated Note Indenture may succeed to the Capital's
ownership of such Common Securities, and (ii) to use its reasonable efforts to
cause such Trust (a) to remain a statutory business trust, except in
connection with the distribution of Junior Subordinated Notes 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 related Trust Agreement, and (b) to
otherwise continue to be classified as a grantor trust for United States
federal income tax purposes.
EVENTS OF DEFAULT
The Subordinated Note Indenture provides that any one or more of the
following described events with respect to the Junior Subordinated Notes of
any series, which has occurred and is continuing, constitutes an "Event of
Default" with respect to the Junior Subordinated Notes of such series:
(a) failure for 10 days to pay interest on the Junior Subordinated Notes
of such series, including any Additional Interest (as defined in clause
(ii) of the definition thereof in the Subordinated Note Indenture) in
respect thereof, when due on an Interest Payment Date other than at
maturity or upon earlier redemption; provided, however, that a valid
extension of the interest payment period by Capital shall not constitute a
default in the payment of interest for this purpose; or
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(b) failure for 10 days to pay Additional Interest (as defined in clause
(i) of the definition thereof in the Subordinated Note Indenture); or
(c) failure to pay principal or premium, if any, or interest, including
Additional Interest (as defined in clause (ii) of the definition thereof in
the Subordinated Note Indenture), on the Junior Subordinated Notes of such
series when due at maturity or upon earlier redemption; or
(d) failure for three Business Days to deposit any sinking fund payment
when due by the terms of a Junior Subordinated Note of such series; or
(e) failure to observe or perform any other covenant or warranty in the
Subordinated Note Indenture (other than a covenant or warranty which has
expressly been included therein solely for the benefit of one or more
series of Junior Subordinated Notes other than such series) for 90 days
after written notice to Southern and Capital from the Indenture Trustee or
the holders of at least 25% in principal amount of the outstanding Junior
Subordinated Notes of such series; or
(f) certain events of bankruptcy, insolvency, or reorganization of
Southern or Capital.
The holders of not less than a majority in aggregate outstanding principal
amount of the Junior Subordinated Notes of any series have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee with respect to the Junior Subordinated
Notes of such series. If a Subordinated Note Indenture Event of Default occurs
and is continuing with respect to the Junior Subordinated Notes of any series,
then the Indenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Notes of such series
may declare the principal amount thereof due and payable immediately by notice
in writing to Southern and Capital (and to the Indenture Trustee if given by
the holders), and upon any such declaration such principal amount shall become
immediately due and payable. At any time after such a declaration of
acceleration with respect to the Junior Subordinated Notes of any series has
been made and before a judgment or decree for payment of the money due has
been obtained as provided in Article Five of the Subordinated Note Indenture,
the holders of not less than a majority in aggregate outstanding principal
amount of the Junior Subordinated Notes of such series may rescind and annul
such declaration and its consequences if the default has been cured or waived
and Southern or Capital has paid or deposited with the Indenture Trustee a sum
sufficient to pay all matured installments of interest (including any
Additional Interest) and principal due otherwise than by acceleration and all
sums paid or advanced by the Indenture Trustee, including reasonable
compensation and expenses of the Indenture Trustee.
A holder of Capital Securities may institute a legal proceeding directly
against Southern and Capital, without first instituting a legal proceeding
against the Property Trustee or any other person or entity, for enforcement of
payment to such holder of principal of or interest on the Junior Subordinated
Notes of the related series having a principal amount equal to the aggregate
stated liquidation amount of the Capital Securities of such holder on or after
the due dates specified in the Junior Subordinated Notes of such series.
The holders of not less than a majority in aggregate outstanding principal
amount of the Junior Subordinated Notes of any series may, on behalf of the
holders of all the Junior Subordinated Notes of such series, waive any past
default with respect to such series, except (i) a default in the payment of
principal or interest or (ii) a default in respect of a covenant or provision
which under Article Nine of the Subordinated Note Indenture cannot be modified
or amended thereunder without the consent of the holder of each outstanding
Junior Subordinated Note of such series affected thereby.
FORM, REGISTRATION AND TRANSFER
If the Junior Subordinated Notes are distributed to the holders of the Trust
Securities, the Junior Subordinated Notes may be represented by one or more
global certificates registered in the name of Cede & Co. as the nominee of
DTC. The depositary arrangements for such Junior Subordinated Notes are
expected to be substantially similar to those in effect for the Capital
Securities. For a description of DTC and the terms of the depositary
arrangements relating to payments, transfers, voting rights, redemptions and
other
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notices and other matters, see "Description of the Exchange Capital
Securities--Form, Denomination, Book-Entry Procedures and Transfer."
REGISTRATION AND TRANSFER
Capital shall not be required to (i) issue, register the transfer of or
exchange Junior Subordinated Notes of any series during a period of 15 days
immediately preceding the date notice is given identifying the Junior
Subordinated Notes of such series called for redemption, or (ii) register the
transfer of or exchange any Junior Subordinated Notes so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Note being redeemed in part.
RESTRICTIONS ON TRANSFER
The Exchange Junior Subordinated Notes will be issued, and may be
transferred only, in minimum denominations of not less than $1,000 and
multiples of $1,000 in excess thereof. Any transfer, sale or other disposition
of Exchange Junior Subordinated Notes in a denomination of less than $1,000
shall be deemed to be void and of no legal effect whatsoever. Any such
transferee shall be deemed not to be the holder of such Exchange Junior
Subordinated Notes for any purpose, including but not limited to the receipt
of payments on such Exchange Junior Subordinated Notes, and such transferee
shall be deemed to have no interest whatsoever in such Exchange Junior
Subordinated Notes.
PAYMENT AND PAYING AGENT
Payment of principal of any Junior Subordinated Notes will be made only
against surrender to the Paying Agent of such Junior Subordinated Notes.
Principal of and interest on Junior Subordinated Notes will be payable,
subject to any applicable laws and regulations, at the office of such Paying
Agent or Paying Agents as Capital may designate from time to time, except
that, at the option of Capital, payment of any interest may be made by wire
transfer or by check mailed to the address of the person entitled thereto as
such address shall appear in the Security Register with respect to the Junior
Subordinated Notes. Payment of interest on Junior Subordinated Notes on any
interest payment date will be made to the person in whose name the Junior
Subordinated Notes (or predecessor security) are registered at the close of
business on the Record Date for such interest payment (the fifteenth calendar
day before such interest payment date).
The Indenture Trustee will act as Paying Agent with respect to the Junior
Subordinated Notes. Capital 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.
All moneys paid by Capital to a Paying Agent for the payment of the
principal of or interest on the Junior Subordinated Notes of any series which
remain unclaimed at the end of two years after such principal or interest
shall have become due and payable will be repaid to Capital, and the holder of
such Junior Subordinated Notes will thereafter look only to Capital for
payment thereof.
MODIFICATION
The Subordinated Note Indenture contains provisions permitting Capital,
Southern and the Indenture Trustee, with the consent of the holders of not
less than a majority in principal amount of the outstanding Junior
Subordinated Notes of each series affected thereby, to modify the Subordinated
Note Indenture or the rights of the holders of the Junior Subordinated Notes
of such series; provided, that no such modification may, without the consent
of the holder of each outstanding Junior Subordinated Note affected thereby,
(i) change the stated maturity of the principal of, or any installment of
principal of or interest on, any Junior Subordinated Note, or reduce the
principal amount thereof or the rate of interest (including Additional
Interest) thereon or any premium payable upon the redemption thereof, or
change the method of calculating the rate of interest thereon, or impair the
right to institute suit for the enforcement of any such payment on or after
the stated maturity thereof (or, in
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the case of redemption, on or after the redemption date), or (ii) reduce the
percentage of principal amount of the outstanding Junior Subordinated Notes of
any series, the consent of whose holders is required for any such supplemental
indenture, or the consent of whose holders is required for any waiver (of
compliance with certain provisions of the Subordinated Note Indenture or
certain defaults thereunder and their consequences) provided for in the
Subordinated Note Indenture, or (iii) modify any of the provisions of the
Subordinated Note Indenture relating to supplemental indentures, waiver of
past defaults, or waiver of certain covenants, except to increase any such
percentage or to provide that certain other provisions of the Subordinated
Note Indenture cannot be modified or waived without the consent of the holder
of each outstanding Junior Subordinated Note affected thereby, or (iv) reduce
any amount payable under, delay or defer the required time of payment under,
or impair the right to institute suit to enforce any payment under the Notes
Guarantee, or (v) modify the provisions of the Subordinated Note Indenture
with respect to the subordination of the Junior Subordinated Notes or the
Notes Guarantee in a manner adverse to such holder.
In addition, Capital, Southern and the Indenture Trustee may execute,
without the consent of any holders of Junior Subordinated Notes, any
supplemental indenture for certain other usual purposes, including the
creation of any new series of junior subordinated notes.
CONSOLIDATION, MERGER AND SALE
Neither Southern nor Capital shall consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any person, unless (1) such other corporation
or person is a corporation organized and existing under the laws of the United
States, any state thereof or the District of Columbia and such other
corporation or person expressly assumes, by supplemental indenture executed
and delivered to the Indenture Trustee, the payment of the principal of (and
premium, if any) and interest (including Additional Interest) on all the
Junior Subordinated Notes and the performance of every covenant of the
Subordinated Note Indenture and the Notes Guarantee on the part of Southern or
Capital, as the case may be, to be performed or observed; (2) immediately
after giving effect to such transactions, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing; and (3) Southern or Capital,
as the case may be, has delivered to the Indenture Trustee an officers'
certificate and an opinion of counsel, each stating that such transaction
complies with the provisions of the Subordinated Note Indenture governing
consolidation, merger, conveyance, transfer or lease and that all conditions
precedent thereto have been complied with.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to an Event of Default with respect to Junior
Subordinated Notes of any series, undertakes to perform, with respect to
Junior Subordinated Notes of such series, only such duties as are specifically
set forth in the Subordinated Note Indenture and, in case an Event of Default
with respect to Junior Subordinated Notes of any series has occurred and is
continuing, shall exercise, with respect to Junior Subordinated Notes of such
series, 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 Indenture
Trustee is under no obligation to exercise any of the powers vested in it by
the Subordinated Note Indenture at the request of any holder of Junior
Subordinated Notes of any series, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The Indenture Trustee is not required to expend or risk its own funds
or otherwise incur any financial liability in the performance of its duties if
the Indenture Trustee reasonably believes that repayment or adequate indemnity
is not reasonably assured to it.
Bankers Trust Company, the Indenture Trustee, also serves as Property
Trustee and as Guarantee Trustee. Southern and certain of its subsidiaries
maintain deposit accounts and banking relationships with Bankers Trust
Company. Bankers Trust Company also serves as trustee under other indentures
pursuant to which securities of subsidiaries of Southern are outstanding.
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GOVERNING LAW
The Subordinated Note Indenture and the Junior Subordinated Notes will be
governed by, and construed in accordance with, the internal laws of the State
of New York.
MISCELLANEOUS
Each of Southern and Capital will have the right at all times to assign any
of its rights or obligations under the Subordinated Note Indenture to a direct
or indirect wholly-owned subsidiary of Southern; provided, that, in the event
of any such assignment, Southern or Capital, as the case may be, will remain
primarily liable for all such obligations. Subject to the foregoing, the
Subordinated Note Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns.
DESCRIPTION OF THE EXCHANGE CAPITAL SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Exchange Capital
Securities Guarantee that will be executed and delivered by Southern in
connection with the issuance by the Trust of the Exchange Capital Securities
for the benefit of the holders of Exchange Capital Securities from time to
time. The Original Capital Securities Guarantee was executed and delivered by
Capital concurrently with the issuance of the Original Capital Securities by
the Trust for the benefit of the holders from time to time of the Original
Capital Securities. As soon as practicable after the date hereof, the Original
Capital Securities Guarantee will be exchanged by Capital for the Exchange
Capital Securities Guarantee. The Exchange Capital Securities Guarantee has
been qualified as an indenture under the 1939 Act. Bankers Trust Company will
act as indenture trustee under the Exchange Capital Securities Guarantee (the
"Guarantee Trustee") for purposes of the 1939 Act. The terms of the Exchange
Capital Securities Guarantee will be those set forth therein and those made
part thereof by the 1939 Act. 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 Exchange Capital Securities Guarantee,
which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part, and
the 1939 Act. The Exchange Capital Securities Guarantee will be held by the
Guarantee Trustee for the benefit of holders of the Exchange Capital
Securities.
GENERAL
Pursuant to the Capital Securities Guarantee, Southern will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full, to the
holders of the Capital Securities, the Guarantee Payments (as defined herein),
to the extent not paid by, or on behalf of, the Trust, regardless of any
defense, right of set-off or counterclaim that Southern may have or assert
against any person. The following payments or distributions with respect to
the Capital Securities to the extent not paid or made by, or on behalf of, the
Trust will be subject to the Capital Securities Guarantee (without
duplication): (i) any accrued and unpaid distributions required to be paid on
the Capital Securities but if and only if and to the extent that the Trust has
funds legally and immediately available therefor, (ii) the applicable
Redemption Price with respect to any Capital Securities called for redemption
by the Trust, but if and only to the extent the Trust has funds legally and
immediately available therefor, and (iii) upon a dissolution, winding-up or
termination of the Trust (other than in connection with the distribution of
Junior Subordinated Notes to the holders of Trust Securities or the redemption
of all of the Capital Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the Capital
Securities to the date of payment, to the extent the Trust has funds legally
and immediately available therefor, and (b) the amount of assets of the Trust
remaining available for distribution to holders of Capital Securities in
liquidation of the Trust (the "Guarantee Payments"). Southern's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by Southern to the holders of the Capital Securities or by causing the
Trust to pay such amounts to such holders.
The Capital Securities Guarantee will be a guarantee of the Guarantee
Payments with respect to the Capital Securities from the time of issuance of
the Capital Securities, but will not apply to the payment of distributions
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and other payments on the Capital Securities when the Trust does not have
sufficient funds legally and immediately available to make such distributions
or other payments. IF CAPITAL DOES NOT MAKE INTEREST PAYMENTS ON THE JUNIOR
SUBORDINATED NOTES HELD BY THE PROPERTY TRUSTEE, THE TRUST WILL NOT MAKE
DISTRIBUTIONS ON THE CAPITAL SECURITIES.
SUBORDINATION
Southern's obligations under the Capital Securities Guarantee to make the
Guarantee Payments will constitute an unsecured obligation of Southern and
will rank (i) subordinate and junior in right of payment to all other
liabilities of Southern, except those obligations or liabilities made pari
passu or subordinate by their terms, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by Southern and with any
guarantee now or hereafter entered into by Southern in respect of any
preferred or preference securities of any affiliate of Southern, and (iii)
senior to all common stock of Southern. The terms of the Capital Securities
will provide that each holder of Capital Securities by acceptance thereof
agrees to the subordination provisions and other terms of the Capital
Securities Guarantee.
The Capital Securities Guarantee will constitute a guarantee of payment and
not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under the
guarantee without first instituting a legal proceeding against any other
person or entity).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially and adversely
affect the rights of holders of the Capital Securities (in which case no
consent will be required), the Capital Securities Guarantee may be amended
only with the prior approval of the holders of not less than 66 2/3% in
liquidation amount of the outstanding Capital Securities. The manner of
obtaining any such approval of holders of the Capital Securities is set forth
under "Description of the Exchange Capital Securities--Voting Rights." All
guarantees and agreements contained in the Capital Securities Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of
Southern and shall inure to the benefit of the holders of the Capital
Securities then outstanding.
TERMINATION
The Capital Securities Guarantee will terminate and be of no further force
and effect as to the Capital Securities upon full payment of the applicable
Redemption Price of all Capital Securities, upon distribution of Junior
Subordinated Notes to the holders of such Capital Securities, or upon full
payment of the amounts payable upon liquidation of the Trust. The Capital
Securities Guarantee will continue to be effective or will be reinstated, as
the case may be, if at any time any holder of the Capital Securities must
restore payment of any sums paid with respect to the Capital Securities or
under the Capital Securities Guarantee.
EVENTS OF DEFAULT
An event of default under the Capital Securities Guarantee will occur upon
the failure by Southern to perform any of its payment obligations thereunder.
The holders of a majority in liquidation amount of the Capital Securities have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of the Capital
Securities Guarantee or to direct the exercise of any trust or power conferred
upon the Guarantee Trustee under the Capital Securities Guarantee. Any holder
of Capital Securities may institute a legal proceeding directly against
Southern to enforce its rights under the Capital Securities Guarantee without
first instituting a legal proceeding against the Guarantee Trustee or any
other person or entity. The holders of a majority in liquidation amount of
Capital Securities may, by vote, on behalf of the holders of all the Capital
Securities, waive any past event of default and its consequences.
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INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of any event of default with
respect to the Capital Securities Guarantee and after the curing or waiving of
all events of default with respect to the Capital Securities Guarantee,
undertakes to perform only such duties as are specifically set forth in the
Capital Securities Guarantee and, in case an event of default has occurred,
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 Capital Securities Guarantee at the request of any holder of the
Capital Securities, unless offered reasonable indemnity against the costs,
expenses and liabilities which might be incurred thereby.
Bankers Trust Company, the Guarantee Trustee, also serves as Property
Trustee and as Indenture Trustee. Southern and certain of its subsidiaries
maintain deposit accounts and banking relationships with Bankers Trust
Company. Bankers Trust Company serves as trustee under other indentures
pursuant to which securities of subsidiaries of Southern are outstanding.
GOVERNING LAW
The Capital Securities Guarantee will be governed by, and construed in
accordance with, the internal laws of the State of New York.
THE AGREEMENT AS TO EXPENSES AND LIABILITIES
Pursuant to an Agreement as to Expenses and Liabilities entered into by
Southern under the Trust Agreement, Southern will irrevocably and
unconditionally guarantee to each person or entity to whom the Trust becomes
indebted or liable the full payment of any indebtedness, expenses or
liabilities of the Trust, other than obligations of the Trust to pay to the
holders of the Capital Securities or other similar interests in the Trust the
amounts due such holders pursuant to the terms of the Capital Securities or
such other similar interests, as the case may be.
DESCRIPTION OF THE EXCHANGE NOTES GUARANTEE
Pursuant to the Subordinated Note Indenture, Southern will irrevocably and
unconditionally guarantee the due and punctual payment of principal, premium,
if any, and interest on the Junior Subordinated Notes when and as the same
shall become due and payable, whether at maturity, upon redemption or
otherwise. The Original Notes Guarantee was executed and delivered by Southern
concurrently with the issuance of the Original Junior Subordinated Notes by
Capital. As soon as practicable after the date hereof, the Original Notes
Guarantee will be exchanged by Southern for the Exchange Notes Guarantee. The
Exchange Notes Guarantee will constitute an unsecured obligation of Southern
and will rank subordinate and junior to all Senior Indebtedness that may be
issued by Southern. As of March 31, 1997, Senior Indebtedness of Southern
aggregated approximately $794,000,000. Since Southern is a holding company,
the right of Southern and, hence, the right of creditors of Southern
(including the holders of the Junior Subordinated Notes) to participate in any
distribution of the assets of any subsidiary of Southern, whether upon
liquidation, reorganization or otherwise, is subject to prior claims of
creditors of each such subsidiary.
DESCRIPTION OF THE ORIGINAL SECURITIES
The terms of the Original Securities are identical in all material respects
to the Exchange Securities, except that (i) the Original Securities have not
been registered under the Securities Act, are subject to certain restrictions
on transfer and are entitled to certain rights under the Registration Rights
Agreement (which rights will terminate upon consummation of the Exchange
Offer, except under limited circumstances), (ii) the Exchange Capital
Securities will not contain the $100,000 minimum liquidation amount transfer
restriction and certain
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other restrictions on transfer applicable to Original Capital Securities, (iii)
the Exchange Capital Securities will not provide for any increase in the
distribution rate thereon and (iv) the Exchange Junior Subordinated Notes will
not provide for any increase in the interest rate thereon. The Original
Securities provide that, in the event that a registration statement relating to
the Exchange Offer has not been filed and been declared effective within certain
specified periods, or, in certain limited circumstances, in the event a shelf
registration statement (the "Shelf Registration Statement") with respect to the
resale of the Original Capital Securities is not declared effective by the time
required by the Registration Rights Agreement, then liquidated damages will
accrue at the rate of 0.25% per annum on the principal amount of the Original
Junior Subordinated Notes and Additional Distributions will accrue at the rate
of 0.25% per annum on the liquidation amount of the Original Capital Securities,
for the period from the occurrence of such event until such time as such
registration statement has been filed or declared effective, as the case may be.
The Exchange Securities are not, and upon consummation of the Exchange Offer the
Original Securities will not be, entitled to any such additional interest or
distributions. Accordingly, holders of Original Capital Securities should review
the information set forth under "Risk Factors--Consequences of a Failure to
Exchange Original Capital Securities" and "Description of the Exchange Capital
Securities."
RELATIONSHIP AMONG THE CAPITAL SECURITIES,
THE SUBORDINATED NOTES, THE CAPITAL SECURITIES GUARANTEE AND THE NOTES
GUARANTEE
As long as payments of interest and other payments are made when due on the
Junior Subordinated Notes, such payments will be sufficient to cover
distributions and payments due on the Trust Securities primarily because (i)
the aggregate principal amount of Junior Subordinated Notes will be equal to
the sum of the aggregate stated liquidation amount of the Trust Securities;
(ii) the interest rate and interest and other payment dates on the Junior
Subordinated Notes will match the distribution rate and distribution and other
payment dates for the Capital Securities; (iii) Southern shall pay for all
costs and expenses of the Trust pursuant to the Agreement as to Expenses and
Liabilities; and (iv) the Trust Agreement provides that the Securities
Trustees shall not cause or permit the Trust to, among other things, engage in
any activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are legally and
immediately available) and other payments due on the Capital Securities (to
the extent funds therefor are legally and immediately available) are
guaranteed by Southern as and to the extent set forth under "Description of
the Exchange Capital Securities Guarantee." If Capital does not make interest
payments on the Junior Subordinated Notes, it is not expected that the Trust
will have sufficient funds to pay distributions on the Capital Securities. The
Capital Securities Guarantee is a guarantee from the time of its issuance, but
does not apply to any payment of distributions unless and until the Trust has
sufficient funds legally and immediately available for the payment of such
distributions.
If Capital fails to make interest or other payments on the Junior
Subordinated Notes when due (taking into account any Extension Period), the
Trust Agreement provides a mechanism whereby the holders of the Capital
Securities may appoint a substitute Property Trustee. Such holders may also
direct the Property Trustee to enforce its rights under the Junior
Subordinated Notes and the Notes Guarantee, including proceeding directly
against Capital to enforce the Junior Subordinated Notes and Southern to
enforce the Notes Guarantee. If the Property Trustee fails to enforce its
rights under the Junior Subordinated Notes or the Notes Guarantee, to the
fullest extent permitted by applicable law, any holder of Capital Securities
may institute a legal proceeding directly against Capital to enforce the
Property Trustee's rights under the Junior Subordinated Notes and against
Southern to enforce such rights under the Notes Guarantee without first
instituting any legal proceeding against the Property Trustee or any other
person or entity. Notwithstanding the foregoing, a holder of Capital
Securities may institute a legal proceeding directly against Southern and
Capital, without first instituting a legal proceeding against the Property
Trustee or any other person or entity, for enforcement of payment to such
holder of principal of or interest on the Junior Subordinated Notes having a
principal amount equal to the aggregate stated
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liquidation amount of the Capital Securities of such holder on or after the
due dates specified in the Junior Subordinated Notes.
If Southern fails to make payments under the Capital Securities Guarantee,
the Capital Securities Guarantee provides a mechanism whereby the holders of
the Capital Securities may direct the Guarantee Trustee to enforce its rights
thereunder. In addition, any holder of Capital Securities may institute a
legal proceeding directly against Southern to enforce the Guarantee Trustee's
rights under the Capital Securities Guarantee without first instituting a
legal proceeding against the Guarantee Trustee or any other person or entity.
The Notes Guarantee, the Capital Securities Guarantee, the Subordinated Note
Indenture, the Junior Subordinated Notes, the Trust Agreement and the
Agreement as to Expenses and Liabilities, as described above, constitute a
full and unconditional guarantee by Southern and Capital of the payments due
on the Capital Securities.
Upon any voluntary or involuntary dissolution, winding-up or termination of
the Trust, unless the Junior Subordinated Notes are distributed in connection
therewith, the holders of Capital Securities will be entitled to receive, out
of assets legally available for distribution to holders, the Liquidation
Distribution in cash. See "Description of the Exchange Capital Securities--
Liquidation Distribution Upon Dissolution." Upon any voluntary or involuntary
liquidation or bankruptcy of Capital, the Property Trustee, as holder of the
Junior Subordinated Notes, would be a subordinated creditor of Capital,
subordinated in right of payment to all Senior Indebtedness, but entitled to
receive payment in full of principal and interest, before any stockholders of
Capital receive payments or distributions. Because Southern is guarantor under
the Capital Securities Guarantee and the Notes Guarantee and has agreed to pay
for all costs, expenses and liabilities of the Trust (other than the Trust's
obligations to holders of the Capital Securities) pursuant to the Agreement as
to Expenses and Liabilities, the positions of a holder of Capital Securities
and a holder of Junior Subordinated Notes relative to other creditors and to
stockholders of Southern in the event of liquidation or bankruptcy of Southern
would be substantially the same.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Subordinated Note
Indenture. However, in the event of payment defaults under, or acceleration
of, Senior Indebtedness, the subordination provisions of the Junior
Subordinated Notes provide that no payments may be made in respect of the
Junior Subordinated Notes until such Senior Indebtedness has been paid in full
or any payment default thereunder has been cured or waived. Failure to make
required payments on the Junior Subordinated Notes would constitute an Event
of Default under the Subordinated Note Indenture except that failure to make
interest payments on the Junior Subordinated Notes will not be an Event of
Default during an Extension Period; provided, however, that any Extension
Period may not exceed 10 consecutive semi-annual periods or extend beyond the
maturity of the Junior Subordinated Notes.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain material United States federal income
tax consequences of the ownership and disposition of the Capital Securities
and constitutes the opinion of Troutman Sanders LLP, counsel to Southern,
Capital and the Trust, insofar as it relates to matters of law and legal
conclusions. This summary deals only with Capital Securities held as capital
assets within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended to the date hereof (the "Code"), by Holders (as defined
herein). Moreover, it does not discuss all of the tax consequences that may be
relevant to a Holder in light of his particular circumstances or to Holders
subject to special rules, such as certain financial institutions, insurance
companies, dealers in securities, individual retirement and certain tax
deferred accounts, and persons who engage in a straddle or a hedge relating to
a Capital Security. Prospective investors should consult their own tax
advisors with regard to the application of the tax considerations discussed
below to their particular situations as well as the application of any state,
local or other tax laws. This summary is based on laws, existing and proposed
regulations, and applicable judicial and administrative determinations, all of
which are subject to change at any time, and any such changes may be
retroactively applied in a manner that could adversely affect Holders. As used
herein, the term "Holder" means a beneficial owner of a Capital Security that
for United States federal income tax purposes is (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, or (iii) a trust that is not a foreign trust or an estate
the income of which is subject to United States federal income taxation
regardless of its source. Thus, the following summary does not address any tax
consequences that apply specifically to nonresident aliens or foreign
entities.
EXCHANGE OF CAPITAL SECURITIES
The exchange of Original Capital Securities for Exchange Capital Securities
should not be a taxable event for United States federal income tax purposes,
and the tax attributes of the Original Capital Securities immediately before
the exchange should carry over to the Exchange Capital Securities. For
example, a U.S. Holder should have the same issue price, tax basis, holding
period and market discount or bond premium in the Exchange Capital Securities
as the holder did in the Original Capital Securities immediately before the
exchange.
TREATMENT OF THE TRUST AND CAPITAL SECURITIES FOR FEDERAL INCOME TAX PURPOSES
The Trust will be treated as a "grantor trust" and not as an association
taxable as a corporation for federal income tax purposes. Thus, for federal
income tax purposes, each Holder will be treated as the beneficial owner of a
pro rata undivided interest in the Junior Subordinated Notes and,
consequently, will be required to include in income the Holder's pro rata
share of the entire income from the Junior Subordinated Notes. Each Holder
generally will determine its net income or loss with respect to the Trust in
accordance with its own method of accounting, although income arising from
OID, if any, must be taken into account under the accrual method of accounting
even if the Holder otherwise would use the cash receipts and disbursements
method.
PAYMENTS OF INTEREST
Except as set forth below, stated interest on a Junior Subordinated Note
will generally be taxable to a Holder as ordinary income at the time it is
paid or accrued in accordance with the Holder's own method of accounting.
ORIGINAL ISSUE DISCOUNT
Under applicable income tax regulations, Southern and Capital believe that
the Junior Subordinated Notes will not be treated as issued with OID. It
should be noted that these regulations have not yet been addressed in any
rulings or other interpretations by the Internal Revenue Service (the "IRS").
Accordingly, it is possible that the IRS could take a position contrary to the
interpretations described herein.
The terms of the Junior Subordinated Notes permit Capital to defer the
payment of interest on the Junior Subordinated Notes at any time and from time
to time by extending the interest payment period for up to 10
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consecutive semi-annual periods with respect to each Extension Period;
provided, however, that no Extension Period may extend beyond the maturity
date of the Junior Subordinated Notes. Should Capital exercise this option to
defer payments of interest, the Junior Subordinated Notes would at that time
be treated as reissued with OID and interest would be taxable on an economic
accrual basis. As a result, all Holders would, in effect, be required to
accrue interest income even if such Holders are on a cash method of
accounting. Consequently, in the event that the payment of interest is
deferred, a Holder could be required to include OID in income on an economic
accrual basis, notwithstanding that Capital will not make any interest
payments during such period on the Junior Subordinated Notes.
MARKET DISCOUNT
A purchaser of a Capital Security at a discount from the liquidation amount
at maturity of such purchaser's pro rata share of the Junior Subordinated
Notes acquires such Capital Security with "market discount." However, market
discount with respect to a Capital Security will be considered to be zero if
it is de minimis. Market discount will be de minimis with respect to a Capital
Security if it is less than the product of (i) 0.25% of the adjusted issue
price of the purchaser's pro rata share of the Junior Subordinated Notes
multiplied by (ii) the number of complete years to maturity of such Junior
Subordinated Notes after the date of purchase. The purchaser of a Capital
Security with more than a de minimis amount of market discount generally will
be required to treat any gain on the sale, exchange, redemption or other
disposition of all or part of the Capital Securities (or related Junior
Subordinated Notes) as ordinary income to the extent of accrued (but not
previously taxed) market discount. Market discount generally will accrue
ratably during the period from the date of purchase of such Capital Security
to the maturity date of the Junior Subordinated Notes, unless the Holder
irrevocably elects to accrue such market discount on the basis of a constant
interest rate.
A Holder who has acquired a Capital Security at a market discount generally
will be required to defer any deductions of interest expense attributable to
any indebtedness incurred or continued to purchase or carry the Capital
Security, to the extent such interest expense exceeds the related interest
income. Any such deferred interest expense generally will be allowable as a
deduction not later than the year in which the related market discount income
is recognized. As an alternative to the inclusion of market discount in income
upon disposition of all or a portion of a Capital Security or the related
Junior Subordinated Notes (including redemptions thereof), a Holder may make
an election (which may not be revoked without the IRS's consent) to include
market discount in income as it accrues on all market discount instruments
acquired by the Holder during or after the taxable year for which the election
is made. In that case, the preceding deferral rule for interest expense will
not apply.
In lieu of the foregoing treatment of market discount and interest expense,
a Holder may elect to treat any market discount (including a de minimis
amount) as OID and accrue such discount on a constant-yield basis in the same
manner as the Holder accrues OID.
SALE OF CAPITAL SECURITIES
Upon the sale, retirement (including redemption) or other taxable
disposition of all or part of a Capital Security, a Holder thereof will
recognize gain or loss equal to the difference between the amount realized on
such sale, retirement or other disposition and such Holder's adjusted tax
basis in the Capital Security or part thereof. If the Holder disposes of a
Capital Security prior to the occurrence of an Extension Period, any portion
of the amount received that is attributable to accrued interest will be
treated as interest income to the Holder and will not be treated as part of
the amount realized for purposes of determining gain or loss on the
disposition of the Capital Security. Any recognized gain or loss will be
capital gain or loss, except to the extent of any accrued market discount (see
"Market Discount" above), and such capital gain or loss will be long-term if
the holding period for the Capital Security is more than one year at the time
of sale, retirement or other disposition. A Holder's adjusted tax basis in a
Capital Security acquired by purchase will equal the cost of such Capital
Security to the Holder, increased by the amount of any related accrued OID and
market discount included in taxable income by the Holder and reduced by any
prior payments on the Junior Subordinated Notes which are not qualified stated
interest. The redemption of only part of a Capital Security will require an
allocation of the
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Holder's adjusted tax basis in his pro rata share of the related Junior
Subordinated Notes between the portion of the Junior Subordinated Notes
redeemed and retained by the Holder in order to determine gain or loss.
RECEIPT OF JUNIOR SUBORDINATED NOTES UPON LIQUIDATION OF THE TRUST
As described under "Description of the Exchange Capital Securities--Special
Event Redemption or Distribution," Junior Subordinated Notes may be
distributed to Holders in exchange for the Capital Securities and in
liquidation of the Trust. Such a distribution would be treated as a non-
taxable event to each Holder and each Holder would receive an aggregate tax
basis in the Holder's Junior Subordinated Notes equal to the Holder's
aggregate tax basis in its Capital Securities. A Holder's holding period with
respect to the Junior Subordinated Notes so received in liquidation of the
Trust would include the period for which the Capital Securities were held by
such Holder.
INFORMATION REPORTING TO HOLDERS
Income on the Capital Securities will be reported to Holders on Form 1099,
which form should be mailed to Holders of Capital Securities by January 31
following each calendar year.
BACKUP WITHHOLDING
A Holder may be subject to "backup withholding" under certain circumstances.
Backup withholding applies to a Holder if the Holder, among other things, (i)
fails to furnish his social security number or other taxpayer identification
number ("TIN") to the payor responsible for backup withholding (for example,
the Holder's securities broker), (ii) furnishes such payor an incorrect TIN,
(iii) fails to provide such payor with a certified statement, signed under
penalties of perjury, that the TIN provided to the payor is correct and that
the Holder is not subject to backup withholding, or (iv) fails to report
properly interest and dividends on his tax return. Backup withholding,
however, does not apply to payments made to certain exempt recipients, such as
corporations and tax-exempt organizations. The backup withholding rate is 31%
of "reportable payments," which generally will include distributions of
interest and principal payments on the Junior Subordinated Notes.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE MAY NOT BE APPLICABLE TO A
HOLDER, DEPENDING UPON A HOLDER'S PARTICULAR SITUATION, AND THEREFORE EACH
HOLDER SHOULD CONSULT HIS TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF
THE OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAW.
61
<PAGE>
CERTAIN ERISA CONSIDERATIONS
A fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), (an "ERISA Plan") should consider the fiduciary standards of ERISA
in the context of the ERISA Plan's particular circumstances before authorizing
an investment in the Capital Securities. Among other factors, the fiduciary
should consider whether such an investment is in accordance with the documents
governing the ERISA Plan and whether the investment is appropriate for the
ERISA Plan in view of its overall investment policy and diversification of its
portfolio.
Certain provisions of ERISA and the Code prohibit ERISA Plans, as well as
individual retirement accounts and Keogh plans subject to section 4975 of the
Code (collectively, "Plans"), from engaging in certain transactions involving
"plan assets" with parties that are "parties in interest" under ERISA or
"disqualified persons" under the Code with respect to the Plan. The U.S.
Department of Labor has issued a final regulation (the "Regulation") with
regard to whether the underlying assets of an entity in which employee benefit
plans acquire equity interests are deemed to be plan assets.
Under such Regulation, for purposes of ERISA and section 4975 of the Code,
the assets of the Trust would be deemed to be "plan assets" of a Plan whose
assets were used to purchase Capital Securities if the Capital Securities were
considered to be equity interests in the Trust and no exception to plan asset
status were applicable under the Regulation.
If the assets of the Trust were deemed to be plan assets of Plans that are
holders of the Capital Securities, a Plan's investment in the Capital
Securities might be deemed to constitute a delegation under ERISA of the duty
to manage plan assets by a fiduciary investing in Capital Securities. In
addition, Southern or Capital might be considered a "party in interest" or
"disqualified person" with respect to Plans whose assets were used to purchase
Capital Securities. If this were the case, an investment in Capital Securities
by a Plan might constitute or, in the course of the operation of the Trust,
give rise to a prohibited transaction under ERISA or the Code. In particular,
it is likely that, under such circumstances, a prohibited "extension of
credit" to Southern or Capital would be considered to occur under ERISA and
the Code.
Because of the possibility that the assets of the Trust would be considered
plan assets of Plans whose assets were invested in the Capital Securities, and
the likelihood that under such circumstances a prohibited extension of credit
would occur, the Capital Securities may not be purchased or held by any Plan
or any person investing "plan assets" of any Plan, unless such purchaser or
holder is eligible for the exemptive relief available under Prohibited
Transaction Class Exemption ("PTCE") 96-23 (for certain transactions
determined by in-house asset managers), PTCE 95-60 (for certain transactions
involving insurance company general accounts), PTCE 91-38 (for certain
transactions involving bank collective investment funds), PTCE 90-1 (for
certain transactions involving insurance company separate accounts) or PTCE
84-14 (for certain transactions determined by independent qualified asset
managers). Any purchaser of the Capital Securities or any interest therein
will be deemed to have represented that either (a) it is not a Plan and is not
purchasing such securities (or interest therein) on behalf of or with "plan
assets" of any Plan or (b) its purchase and holding of the Capital Securities
(or interest therein) is eligible for the exemptive relief available under
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
Due to the complexity of these rules and the penalties imposed upon persons
involved in prohibited transactions, it is important that any person
considering the purchase of Capital Securities with Plan assets consult with
its counsel regarding the consequences under ERISA and the Code of the
acquisition and ownership of Capital Securities and the availability of
exemptive relief under the class exemptions listed above. Employee benefit
plans which are governmental plans (as defined in Section 3(32) of ERISA) and
certain church plans (as defined in Section 3(33) of ERISA) generally are not
subject to ERISA requirements.
62
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
This Prospectus, as it may be amended or supplemented from time to time, may
be used by a broker-dealer during the period referred to below in connection
with resales of Exchange Capital Securities received in exchange for Capital
Securities where such Capital Securities were acquired by such broker-dealer
for its own account as a result of market-making activities or other trading
activities. The Trust, Capital and Southern have agreed that, for a period not
exceeding 90 days after the Expiration Date, they will make this Prospectus,
as amended or supplemented, available to any broker-dealer for use in
connection with any such resale. In addition, until November 3, 1997, all
dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.
The Trust, Capital and Southern will not receive any proceeds from any sale
of Exchange Capital Securities offered hereby. Exchange Capital Securities
received by broker-dealers for their own accounts pursuant to the Exchange
Offer may be sold from time to time in one or more transactions, in the over-
the-counter market, in negotiated transactions, through the writing of options
on the Exchange Capital Securities or a combination of such methods of resale,
at market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such broker-
dealer and/or the purchasers of any such Exchange Capital Securities. Any
broker-dealer that resells Exchange Capital Securities that were received by
it for its own account pursuant to the Exchange Offer and any broker or dealer
that participates in a distribution of such Exchange Capital Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Capital Securities and any commissions
or concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that
by acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
The National Association of Securities Dealers, Inc. ("NASD") is expected to
view the Exchange Capital Securities as interests in a "direct participation
program" (as defined in Rule 2810 of the NASD's Conduct Rules). Broker-dealers
who are members of the NASD may participate in a public offering of a direct
participation program only in accordance with the terms of said Rule 2810.
VALIDITY OF EXCHANGE CAPITAL SECURITIES
Certain matters of Delaware law relating to the validity of the Exchange
Capital Securities will be passed upon on behalf of Capital and the Trust by
Richards, Layton & Finger, Wilmington, Delaware, special Delaware counsel to
Capital and the Trust. The validity of the Junior Subordinated Notes, the
Capital Securities Guarantee and the Notes Guarantee and certain matters
relating thereto will be passed upon on behalf of Southern and Capital by
Troutman Sanders LLP, Atlanta, Georgia. Troutman Sanders LLP will also pass
upon certain matters relating to United States federal income tax
considerations.
EXPERTS
The consolidated financial statements and schedule of Southern included in
Southern's Annual Report on Form 10-K for the year ended December 31, 1996,
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
with respect thereto, and are incorporated herein in reliance upon the
authority of said firm as experts in giving said reports.
63
<PAGE>
================================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY SOUTHERN, CAPITAL OR THE TRUST. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CRE-
ATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF SOUTHERN,
CAPITAL OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTI-
TUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OF-
FER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
-----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information..................................................... 7
Incorporation of Certain Documents by Reference........................... 7
Summary................................................................... 9
Risk Factors.............................................................. 18
The Southern Company...................................................... 21
Southern Company Capital Funding, Inc. ................................... 22
Southern Company Capital Trust I.......................................... 22
Accounting Treatment...................................................... 23
Use of Proceeds........................................................... 23
Recent Results of Operations.............................................. 23
The Exchange Offer........................................................ 23
Description of the Exchange Capital
Securities............................................................... 34
Description of the Exchange Junior
Subordinated Notes....................................................... 47
Description of the Exchange Capital Securities Guarantee.................. 54
Description of the Exchange Notes
Guarantee................................................................ 56
Description of the Original Securities.................................... 56
Relationship Among the Capital Securities, the Subordinated Notes, the
Capital Securities Guarantee and the Notes Guarantee..................... 57
Certain Federal Income Tax Considerations................................. 59
Certain ERISA Considerations.............................................. 62
Plan of Distribution...................................................... 63
Validity of Exchange Capital Securities................................... 63
Experts................................................................... 63
</TABLE>
================================================================================
================================================================================
$325,000,000
SOUTHERN COMPANY
CAPITAL TRUST I
8.19% EXCHANGE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER
EXCHANGE CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED,
AS DESCRIBED HEREIN, BY
[LOGO OF SOUTHERN COMPANY APPEARS HERE]
-----------------
PROSPECTUS
AUGUST 4, 1997
-----------------
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of Title 8 of the Delaware Code gives a corporation power to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or
in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The same Section also
gives a corporation power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to
the extent that the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper. Also, the
Section states that, to the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in defense of
any such action, suit or proceeding, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
The By-Laws of Southern provide in substance that no present or future
director or officer of Southern shall be liable for any act, omission, step or
conduct taken or had in good faith which is required, authorized or approved
by order issued pursuant to the Public Utility Holding Company Act of 1935,
the Federal Power Act, or any state statute regulating Southern or its
subsidiaries by reason of their being public utility companies or public
utility holding companies, or any amendment to any thereof. In the event that
such provisions are found by a court not to constitute a valid defense, each
such director and officer shall be reimbursed for, or indemnified against, all
expenses and liabilities incurred by him or imposed on him in connection with,
or arising out of, any such action, suit or proceeding based on any act,
omission, step or conduct taken or had in good faith as in such By-Laws
described.
The By-Laws of Southern further provide as follows:
"Each person who is or was a director or officer of the Corporation and who
was or is a party or was or is threatened to be made a party to any
threatened, pending or completed claim, action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee,
agent or trustee of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, shall be indemnified by the
Corporation as a matter of right against any and all expenses (including
attorneys' fees) actually and reasonably incurred by him and against any
and all claims, judgments, fines, penalties, liabilities and amounts paid
in settlement actually incurred by him in defense of
II-1
<PAGE>
such claim, action, suit or proceeding, including appeals, to the full
extent permitted by applicable law. The indemnification provided by this
Section shall inure to the benefit of the heirs, executors and
administrators of such person.
Expenses (including attorneys' fees) incurred by a director or officer of
the Corporation with respect to the defense of any such claim, action, suit
or proceeding may be advanced by the Corporation prior to the final
disposition of such claim, action, suit or proceeding, as authorized by the
Board of Directors in the specific case, upon receipt of an undertaking by
or on behalf of such person to repay such amount unless it shall ultimately
be determined that such person is entitled to be indemnified by the
Corporation under this Section or otherwise; provided, however, that the
advancement of such expenses shall not be deemed to be indemnification
unless and until it shall ultimately be determined that such person is
entitled to be indemnified by the Corporation."
Southern has an insurance policy covering its liabilities and expenses which
might arise in connection with its lawful indemnification of its directors and
officers for certain of their liabilities and expenses and also covering its
officers and directors against certain other liabilities and expenses.
Paragraph 10 of the Certificate of Incorporation of Capital provides as
follows:
No director of the corporation shall be personally liable to the
corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, or (iii) for any transaction from which the
director received an improper personal benefit.
Article VII of the By-Laws of Capital provides in pertinent part:
Section 1. The corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorney's fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe such conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendre or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
he or she reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his or her conduct was unlawful.
Section 2. The corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that such person
is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorneys' fees) actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if he or she acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interest of
the corporation and except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of
his or her duty to the
II-2
<PAGE>
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 3. To the extent that a director, officer, employee or agent of
the corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in Sections 1. and 2., or in
defense of any claim, issue or matter therein, such individual shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
Section 4. Any indemnification under Sections 1. and 2. (unless ordered
by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in Sections 1. and 2.
Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to
such action, suit or proceeding, or (2) if such a quorum is not obtainable,
or, even if obtainable a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (3) by the stockholders.
Section 5. Expenses incurred by an officer or director in defending a
civil or criminal action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding as
authorized by the board of directors in the specific case upon receipt of
an undertaking by or on behalf of such director or officer to repay such
amount unless it shall ultimately be determined that such individual is
entitled to be indemnified by the corporation as authorized in this
Section. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
Section 6. The indemnification provided by this Article VII shall not be
exclusive of any other rights to which those seeking indemnification may be
entitled under any agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in such individual's official
capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
Section 7. The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against such person and incurred by such in any such
capacity, or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify against such liability under
the provisions of this section.
II-3
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
4.1 Subordinated Note Indenture of The Southern Company and Southern
Company Capital Funding, Inc. relating to the Junior Subordinated
Notes
4.2 First Supplemental Indenture to Subordinated Note Indenture of
Southern Company Capital Funding, Inc. and The Southern Company
relating to the Junior Subordinated Notes
4.3 Form of Certificate of Junior Subordinated Notes (included as Ex-
hibit A to Exhibit 4.2)
4.4 Certificate of Trust of Southern Company Capital Trust I*
4.5 Trust Agreement of Southern Company Capital Trust I*
4.6 Form of Amended and Restated Trust Agreement of Southern Company
Capital Trust I
4.7 Form of Exchange Capital Security Certificate for Southern Com-
pany Capital Trust I (included as Exhibit E to Exhibit 4.6)
4.8 Form of Exchange Capital Securities Guarantee of Southern Company
Capital Funding, Inc. relating to the Exchange Capital Securities
4.9 Registration Rights Agreement
4.10 Capital Securities Guarantee of The Southern Company relating to
the Original Capital Securities
4.11 Agreement as to Expenses and Liabilities (included as Exhibit D
to Exhibit 4.6)
5.1 Opinion of Troutman Sanders LLP to Southern Company Capital Fund-
ing, Inc. as to legality of the Exchange Junior Subordinated
Notes to be issued by Southern Company Capital Funding, Inc.
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel,
as to legality of the Exchange Capital Securities to be issued by
Southern Company Capital Trust I
5.3 Opinion of Troutman Sanders LLP to The Southern Company as to le-
gality of the Exchange Capital Securities Guarantee and the Ex-
change Notes Guarantee to be issued by The Southern Company (in-
cluded in Exhibit 5.1)
8.1 Opinion of Troutman Sanders LLP, special tax counsel, as to
certain United States federal income tax matters
12.1 Computation of ratio of earnings to fixed charges (Designated in
Registration No. 333-28187 as Exhibit 12.1)*
12.2 Computation of ratio of earnings to fixed charges plus preferred
dividend requirements (Designated in Registration No. 333-28187
as Exhibit 12.2)*
21.1 List of Subsidiaries of The Southern Company (Designated in Form
10-K for the year ended December 31, 1996, File No. 1-3536, as
Exhibit 21)*
23.1 Consent of Arthur Andersen LLP*
23.2 Consent of Troutman Sanders LLP (included in Exhibit 5.1)
23.3 Consent of Richards, Layton & Finger (included in Exhibit 5.2)
23.4 Consent of Troutman Sanders LLP (included in Exhibit 5.3)
23.5 Consent of Troutman Sanders LLP (included in Exhibit 8.1)
24.1 Power of Attorney of certain officers and directors of The
Southern Company (Designated in Registration No. 333-28187 as
Exhibit 24.1)*
24.2 Resolution of The Southern Company re: Power of Attorney
(Designated in Registration No. 333-28187 as Exhibit 24.2)*
25.1 Form T-1 Statement of Eligibility of Bankers Trust Company*
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
</TABLE>
Exhibits listed above which have heretofore been filed with the Commission
and which were designated as noted above are hereby incorporated by reference
and made a part hereof with the same effect as if filed herewith.
- --------
* Previously filed.
II-4
<PAGE>
ITEM 22. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, 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
each undersigned Registrant pursuant to the foregoing provisions, or
otherwise, each Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by each undersigned Registrant of expenses incurred or paid by a
director, officer of controlling person of each 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, each Registrant will, unless in the opinion of its counsel the
matter has been settled by the controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired or involved therein, that was not the subject of and included
in the registration statement when it became effective.
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
THE SOUTHERN COMPANY, A DELAWARE CORPORATION, HAS DULY CAUSED THIS AMENDMENT TO
THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF ATLANTA, STATE OF GEORGIA, ON THE 4TH
DAY OF AUGUST, 1997.
The Southern Company
A.W. DAHLBERG
By: CHAIRMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
By: /s/ Wayne Boston
-----------------------------------
WAYNE BOSTON
ATTORNEY-IN-FACT
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING DIRECTORS AND
OFFICERS OF THE SOUTHERN COMPANY IN THE CAPACITIES AND ON THE DATE INDICATED:
SIGNATURE TITLE DATE
A.W. Dahlberg Chairman of the
Board, President,
Chief Executive
Officer and
Director
(Principal
Executive Officer)
W.L. Westbrook Financial Vice
President, Chief
Financial Officer
and Treasurer
(Principal
Financial and
Accounting
Officer)
John C. Adams
A.D. Correll
Paul J. DeNicola
Jack Edwards
H. Allen Franklin
Bruce S. Gordon
L.G. Hardman III Directors
Elmer B. Harris
William A. Parker, Jr.
William J. Rushton, Jr.
Gloria M. Shatto
Gerald J. St. Pe
Herbert Stockham
II-6
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Wayne Boston August 4, 1997
- -------------------------------------
WAYNE BOSTON
Attorney-in-Fact
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
SOUTHERN COMPANY CAPITAL FUNDING, INC., A DELAWARE CORPORATION, HAS DULY
CAUSED THIS AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ATLANTA, STATE
OF GEORGIA, ON THE 4TH DAY OF AUGUST, 1997.
Southern Company Capital Funding,
Inc.
By: /s/ W.L. Westbrook
---------------------------------
W.L. WESTBROOK
Director
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING DIRECTOR AND
OFFICERS OF SOUTHERN COMPANY CAPITAL FUNDING, INC. IN THE CAPACITIES AND ON
THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
By: /s/ W.L. Westbrook President, Chief August 4, 1997
--------------------------------- Executive Officer
W.L. WESTBROOK and Director
(Principal
Executive Officer)
By: /s/ C.O. Rawlins Vice President and August 4, 1997
--------------------------------- Chief Financial
C.O. RAWLINS Officer (Principal
Financial and
Accounting Officer)
</TABLE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SOUTHERN COMPANY
CAPITAL TRUST I HAS DULY CAUSED THIS AMENDMENT TO THE REGISTRATION STATEMENT
TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
THE CITY OF ATLANTA, STATE OF GEORGIA, ON THE 4TH DAY OF AUGUST, 1997.
Southern Company Capital Trust I
By: /s/ Wayne Boston
---------------------------------
WAYNE BOSTON
ADMINISTRATIVE TRUSTEE
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
4.1 Subordinated Note Indenture of The Southern Company and Southern
Company Capital Funding, Inc. relating to the Junior Subordinated
Notes
4.2 First Supplemental Indenture to Subordinated Note Indenture of
Southern Company Capital Funding, Inc. and The Southern Company
relating to the Junior Subordinated Notes
4.3 Form of Certificate of Junior Subordinated Notes (included as Ex-
hibit A to Exhibit 4.2)
4.4 Certificate of Trust of Southern Company Capital Trust I*
4.5 Trust Agreement of Southern Company Capital Trust I*
4.6 Form of Amended and Restated Trust Agreement of Southern Company
Capital Trust I
4.7 Form of Exchange Capital Security Certificate for Southern Com-
pany Capital Trust I (included as Exhibit E to Exhibit 4.6)
4.8 Form of Exchange Capital Securities Guarantee of Southern Company
Capital Funding, Inc. relating to the Exchange Capital Securities
4.9 Registration Rights Agreement
4.10 Capital Securities Guarantee of The Southern Company relating to
the Original Capital Securities
4.11 Agreement as to Expenses and Liabilities (included as Exhibit D
to Exhibit 4.6)
5.1 Opinion of Troutman Sanders LLP to Southern Company Capital Fund-
ing, Inc. as to legality of the Exchange Junior Subordinated
Notes to be issued by Southern Company Capital Funding, Inc.
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel,
as to legality of the Exchange Capital Securities to be issued by
Southern Company Capital Trust I
5.3 Opinion of Troutman Sanders LLP to The Southern Company as to le-
gality of the Exchange Capital Securities Guarantee and the Ex-
change Notes Guarantee to be issued by The Southern Company (in-
cluded in Exhibit 5.1)
8.1 Opinion of Troutman Sanders LLP, special tax counsel, as to
certain United States federal income tax matters
12.1 Computation of ratio of earnings to fixed charges (Designated in
Registration No. 333-28187 as Exhibit 12.1)*
12.2 Computation of ratio of earnings to fixed charges plus preferred
dividend requirements (Designated in Registration No. 333-28187
as Exhibit 12.2)*
21.1 List of Subsidiaries of The Southern Company (Designated in Form
10-K for the year ended December 31, 1996, File No. 1-3536, as
Exhibit 21)*
23.1 Consent of Arthur Andersen LLP*
23.2 Consent of Troutman Sanders LLP (included in Exhibit 5.1)
23.3 Consent of Richards, Layton & Finger (included in Exhibit 5.2)
23.4 Consent of Troutman Sanders LLP (included in Exhibit 5.3)
23.5 Consent of Troutman Sanders LLP (included in Exhibit 8.1)
24.1 Power of Attorney of certain officers and directors of The
Southern Company (Designated in Registration No. 333-28187 as
Exhibit 24.1)*
24.2 Resolution of The Southern Company re: Power of Attorney
(Designated in Registration No. 333-28187 as Exhibit 24.2)*
25.1 Form T-1 Statement of Eligibility of Bankers Trust Company*
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
</TABLE>
Exhibits listed above which have heretofore been filed with the Commission
and which were designated as noted above are hereby incorporated by reference
and made a part hereof with the same effect as if filed herewith.
- --------
* Previously filed.
Exhibit 4.1
SOUTHERN COMPANY CAPITAL FUNDING, INC.
AND
THE SOUTHERN COMPANY
TO
BANKERS TRUST COMPANY,
TRUSTEE.
SUBORDINATED NOTE INDENTURE
DATED AS OF FEBRUARY 1, 1997
<PAGE>
SOUTHERN COMPANY CAPITAL FUNDING, INC.
THE SOUTHERN COMPANY
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
SUBORDINATED NOTE INDENTURE, DATED AS OF FEBRUARY 1, 1997
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
(S) 310(a)(1)...........................................609
(a)(2)...........................................609
(a)(3)................................Not Applicable
(a)(4)................................Not Applicable
(b)..............................................608
610
(S) 311(a)..................................................613
311(b)(4)........................................613(a)
(b)(6)........................................613(b)
(S) 312(a)..............................................701
702(a)
(c)...........................................702(b)
(S) 313(a)...........................................703(a)
313(b)...........................................703(b)
313(c)...........................................703(c)
704
(d)...........................................703(c)
(S) 314(a)........................................704, 1007
(b)...................................Not Applicable
(c)(1)...........................................102
(c)(2)...........................................102
(c)(3)................................Not Applicable
(d)...................................Not Applicable
(e)..............................................102
(S) 315(a)...........................................601(a)
(b)..............................................602
(c)...........................................601(b)
(d)...........................................601(c)
(d)(1).....................................601(a)(1)
(d)(2).....................................601(c)(2)
(d)(3).....................................601(c)(3)
(e)..............................................514
(S) 316(a)..............................................101
(a)(1)(A)........................................502
512
(a)(1)(B)........................................513
(a)(2)................................Not Applicable
(b)..............................................508
(S) 317(a)(1)...........................................503
(a)(2)...........................................504
(b).............................................1003
(S) 318(a)..............................................107
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Parties.........................................................................................1
Recitals of the Company.........................................................................1
ARTICLE ONE.....................................................................................1
SECTION 101. DEFINITIONS...............................................................2
Act...........................................................................3
Additional Interest...........................................................3
Affiliate.....................................................................3
Authenticating Agent..........................................................3
Board of Directors............................................................3
Board Resolution..............................................................3
Business Day..................................................................4
Certificate of a Firm of Independent Public Accountants.......................4
Commission....................................................................4
Company.......................................................................4
Company Request" or "Company Order............................................4
Corporate Trust Office........................................................5
Corporation...................................................................5
Defaulted Interest............................................................5
Depositary....................................................................5
Event of Default..............................................................5
Global Security...............................................................5
Guarantee Agreement...........................................................5
Guarantor.....................................................................5
Holder........................................................................6
Indenture.....................................................................6
Interest Payment Date.........................................................6
Junior Subordinated Note......................................................6
Maturity......................................................................6
Notes Guarantee...............................................................6
Officers' Certificate.........................................................6
Opinion of Counsel............................................................7
Outstanding...................................................................7
Paying Agent..................................................................8
Person........................................................................8
Predecessor Security..........................................................8
Property Trustee..............................................................8
Redemption Date...............................................................9
Redemption Price..............................................................9
Regular Record Date...........................................................9
Responsible Officer...........................................................9
Securities Trust..............................................................9
Security Register" and "Security Registrar....................................9
Senior Indebtedness...........................................................9
Special Record Date..........................................................10
Stated Maturity..............................................................10
Trust Agreement..............................................................11
Trust Indenture Act..........................................................11
Trust Securities.............................................................11
Trustee......................................................................11
Vice President...............................................................11
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.....................................11
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE...................................12
SECTION 104. ACTS OF HOLDERS..........................................................13
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY....................................15
SECTION 106. NOTICE TO HOLDERS OF JUNIOR SUBORDINATED NOTES; WAIVER...................15
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT........................................16
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.................................16
SECTION 109. SUCCESSORS AND ASSIGNS...................................................16
SECTION 110. SEPARABILITY CLAUSE......................................................16
SECTION 111. BENEFITS OF INDENTURE....................................................17
SECTION 112. GOVERNING LAW............................................................17
SECTION 113. LEGAL HOLIDAYS...........................................................17
ARTICLE TWO....................................................................................18
SECTION 201. FORMS GENERALLY..........................................................18
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION..........................19
SECTION 203. JUNIOR SUBORDINATED NOTES ISSUABLE IN THE FORM OF A GLOBAL
SECURITY.....................................................................19
ARTICLE THREE..................................................................................22
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.....................................22
SECTION 302. EXECUTION, AUTHENTICATION, DELIVERY AND DATING...........................25
SECTION 303. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE......................27
SECTION 304. MUTILATED, DESTROYED, LOST AND STOLEN JUNIOR SUBORDINATED
NOTES........................................................................29
SECTION 305. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED...........................30
SECTION 306. PERSONS DEEMED OWNERS....................................................32
SECTION 307. CANCELLATION.............................................................32
SECTION 308. COMPUTATION OF INTEREST..................................................33
ARTICLE FOUR...................................................................................33
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE..................................33
SECTION 402. APPLICATION OF TRUST MONEY...............................................35
ARTICLE FIVE...................................................................................36
SECTION 501. EVENTS OF DEFAULT........................................................36
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.......................38
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE......................................................................40
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.........................................41
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF JUNIOR
SUBORDINATED NOTES...........................................................42
SECTION 506. APPLICATION OF MONEY COLLECTED...........................................42
SECTION 507. LIMITATION ON SUITS......................................................43
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.................................................................44
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.......................................45
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE...........................................45
SECTION 511. DELAY OR OMISSION NOT WAIVER.............................................46
SECTION 512. CONTROL BY HOLDERS OF JUNIOR SUBORDINATED NOTES..........................46
SECTION 513. WAIVER OF PAST DEFAULTS..................................................46
SECTION 514. UNDERTAKING FOR COSTS....................................................47
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.........................................48
ARTICLE SIX....................................................................................48
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES......................................48
SECTION 602. NOTICE OF DEFAULTS.......................................................50
SECTION 603. CERTAIN RIGHTS OF TRUSTEE................................................50
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF JUNIOR
SUBORDINATED NOTES...........................................................52
SECTION 605. MAY HOLD JUNIOR SUBORDINATED NOTES.......................................53
SECTION 606. MONEY HELD IN TRUST......................................................53
SECTION 607. COMPENSATION AND REIMBURSEMENT...........................................53
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS..................................54
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY..................................55
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR........................55
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR...................................57
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS..............59
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY........................60
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT......................................60
ARTICLE SEVEN..................................................................................63
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS................63
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS...................63
SECTION 703. REPORTS BY TRUSTEE.......................................................64
SECTION 704. REPORTS BY COMPANY.......................................................64
ARTICLE EIGHT..................................................................................65
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.....................65
SECTION 802. SUCCESSOR CORPORATION SUBSTITUTED........................................67
ARTICLE NINE...................................................................................67
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.......................67
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS..........................69
SECTION 903. GENERAL PROVISIONS REGARDING SUPPLEMENTAL INDENTURE......................70
SECTION 904. EXECUTION OF SUPPLEMENTAL INDENTURES.....................................71
SECTION 905. EFFECT OF SUPPLEMENTAL INDENTURES........................................71
SECTION 906. CONFORMITY WITH TRUST INDENTURE ACT......................................72
SECTION 907. REFERENCE IN JUNIOR SUBORDINATED NOTES TO SUPPLEMENTAL
INDENTURES...................................................................72
ARTICLE TEN....................................................................................72
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.......................................72
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.........................................73
SECTION 1003. MONEY FOR JUNIOR SUBORDINATED NOTES PAYMENTS TO BE HELD IN
TRUST........................................................................74
SECTION 1004. ADDITIONAL INTEREST.....................................................76
SECTION 1005. CORPORATE EXISTENCE.....................................................76
SECTION 1006. LIMITATIONS ON DIVIDEND AND CERTAIN OTHER PAYMENTS......................77
SECTION 1007. STATEMENT AS TO COMPLIANCE..............................................78
SECTION 1008. WAIVER OF CERTAIN COVENANTS.............................................78
SECTION 1009. COVENANTS REGARDING TRUST...............................................79
ARTICLE ELEVEN.................................................................................79
SECTION 1101. APPLICABILITY OF ARTICLE................................................79
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE...................................79
SECTION 1103. SELECTION BY TRUSTEE OF JUNIOR SUBORDINATED NOTES TO BE
REDEEMED.....................................................................80
SECTION 1104. NOTICE OF REDEMPTION....................................................81
SECTION 1105. DEPOSIT OF REDEMPTION PRICE.............................................82
SECTION 1106. JUNIOR SUBORDINATED NOTES PAYABLE ON REDEMPTION DATE....................82
SECTION 1107. JUNIOR SUBORDINATED NOTES REDEEMED IN PART..............................83
ARTICLE TWELVE.................................................................................83
SECTION 1201. APPLICABILITY OF ARTICLE................................................83
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH JUNIOR
SUBORDINATED NOTES...........................................................84
SECTION 1203. REDEMPTION OF JUNIOR SUBORDINATED NOTES FOR SINKING FUND................84
ARTICLE THIRTEEN...............................................................................85
SECTION 1301. JUNIOR SUBORDINATED NOTES SUBORDINATE TO SENIOR INDEBTEDNESS............85
SECTION 1302. PAYMENT OF PROCEEDS UPON DISSOLUTION, ETC...............................85
SECTION 1303. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT..........................87
SECTION 1304. PAYMENT PERMITTED IF NO DEFAULT.........................................88
SECTION 1305. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.................88
SECTION 1306. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.............................89
SECTION 1307. TRUSTEE TO EFFECTUATE SUBORDINATION.....................................89
SECTION 1308. NO WAIVER OF SUBORDINATION PROVISIONS...................................90
SECTION 1309. TRUST MONEYS NOT SUBORDINATED...........................................91
SECTION 1310. NOTICE TO THE TRUSTEE...................................................91
SECTION 1311. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT........................................................................92
SECTION 1312. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS................93
SECTION 1313. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS.............................................93
SECTION 1314. ARTICLE APPLICABLE TO PAYING AGENTS.....................................93
SECTION 1315. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON SUBORDINATION
PROVISIONS...................................................................94
ARTICLE FOURTEEN...............................................................................94
SECTION 1401. GUARANTEE...............................................................94
SECTION 1402. WAIVER OF NOTICE AND DEMAND.............................................95
SECTION 1403. GUARANTOR OBLIGATIONS NOT AFFECTED......................................95
SECTION 1404. FORM OF GUARANTEE.......................................................96
SECTION 1405. EXECUTION OF GUARANTEE..................................................98
SECTION 1406. SUBROGATION.............................................................98
SECTION 1407. INDEPENDENT OBLIGATIONS.................................................99
SECTION 1408. SUBORDINATION...........................................................99
ARTICLE FIFTEEN................................................................................99
SECTION 1501. NO RECOURSE AGAINST OTHERS..............................................99
SECTION 1502. SET-OFF................................................................100
SECTION 1503. ASSIGNMENT; BINDING EFFECT.............................................100
SECTION 1504. ADDITIONAL INTEREST....................................................101
</TABLE>
<PAGE>
SUBORDINATED NOTE INDENTURE
THIS SUBORDINATED NOTE INDENTURE is made as of February 1, 1997, among
SOUTHERN COMPANY CAPITAL FUNDING, INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company"),
having its principal office at 270 Peachtree Street, N.W., Atlanta, Georgia
30303, THE SOUTHERN COMPANY, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Guarantor"), having its
principal office at 270 Peachtree Street, N.W., Atlanta, Georgia 30303, and
BANKERS TRUST COMPANY, a banking corporation duly organized and existing under
the laws of the State of New York, having its principal corporate trust office
at Four Albany Street, New York, New York 10006, as Trustee (herein called the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the execution and delivery of
this Subordinated Note Indenture to provide for the issuance from time to time
of its unsecured subordinated debentures, notes or other evidences of
indebtedness (herein called the "Junior Subordinated Notes"), to be issued in
one or more series as in this Subordinated Note Indenture provided; and
WHEREAS, the Guarantor has duly authorized the execution and delivery
of this Subordinated Note Indenture to provide for the guarantee of the Junior
Subordinated Notes as herein provided; and
WHEREAS, all things necessary to make this Subordinated Note Indenture
a valid agreement of each of the Company and the Guarantor, in accordance with
its terms, have been done.
NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Junior Subordinated Notes by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Junior Subordinated Notes or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Subordinated Note Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America, and, except as
otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are
generally accepted in the United States of America at the date of such
computation;
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Subordinated Note Indenture as a
whole and not to any particular Article, Section or other subdivision;
and
(5) Trust Securities related to a particular series of Junior
Subordinated Notes means the series of Trust Securities the proceeds of
the sale of which were loaned to the Company in exchange for such
series of Junior Subordinated Notes, and the guarantee agreement
related to such series of Trust Securities means the guarantee
agreement pursuant to which the Guarantor has guaranteed, to the extent
stated therein, the payment of distributions and certain other amounts
with respect to such series of Trust Securities.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act" when used with respect to any Holder of a Junior Subordinated
Note, has the meaning specified in Section 104.
"Additional Interest" means (i) such additional amounts as may be
required so that the net amounts received and retained by the Holder (if the
Holder is a Securities Trust) after paying taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States or any other taxing authority will not be less than the
amounts the Holder would have received had no such taxes, duties, assessments,
or other governmental charges been imposed; and (ii) any interest due and not
paid on an Interest Payment Date, together with interest thereon from such
Interest Payment Date to the date of payment, compounded quarterly, on each
Interest Payment Date.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. Notwithstanding the foregoing, any Securities Trust organized by the
Company shall not be deemed to be an Affiliate of the Company or the Guarantor.
"Authenticating Agent" means any Person or Persons authorized by the
Trustee to authenticate one or more series of Junior Subordinated Notes.
"Board of Directors" means either the board of directors of the Company
or the Guarantor, as applicable, or any duly authorized committee of the
officers and/or directors of the Company or the Guarantor appointed by that
board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or the Guarantor, as
applicable, to have been duly adopted by its Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii)
a day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed, or (iii) a day on which the Trustee's
Corporate Trust Office or Property Trustee's principal corporate trust office is
closed for business.
"Certificate of a Firm of Independent Public Accountants" means a
certificate signed by an independent public accountant or a firm of independent
public accountants who may be the independent public accountants regularly
retained by the Company or the Guarantor or who may be other independent public
accountants. Such accountant or firm shall be entitled to rely upon an Opinion
of Counsel as to the interpretation of any legal matters relating to such
certificate.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Subordinated Note Indenture,
and thereafter "Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee in the Borough
of Manhattan, New York City, at which at any particular time its corporate trust
business shall be principally administered, which office at the date of
execution of this Subordinated Note Indenture is located at Four Albany Street,
New York, New York 10006.
"Corporation" includes corporations, partnerships, limited liability
companies, associations, companies and business trusts.
"Defaulted Interest" has the meaning specified in Section 305.
"Depositary" means, unless otherwise specified by the Company pursuant
to either Section 203 or 301, with respect to Junior Subordinated Notes of any
series issuable or issued as a Global Security, The Depository Trust Company,
New York, New York, or any successor thereto registered as a clearing agency
under the Securities Exchange Act of 1934, as amended, or other applicable
statute or regulation.
"Event of Default" has the meaning specified in Section 501.
"Global Security" means, with respect to any series of Junior
Subordinated Notes issued hereunder, a Junior Subordinated Note that is executed
by the Company and authenticated and delivered by the Trustee to the Depositary
or pursuant to the Depositary's instruction, all in accordance with Section 203
of this Indenture and any indenture supplemental hereto.
"Guarantee Agreement" means a Guarantee Agreement, if any, executed and
delivered by the Guarantor for the benefit of the holders from time to time of
all or a portion of the Trust Securities of a Securities Trust.
"Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Subordinated Note Indenture,
and thereafter "Guarantor" shall mean such successor corporation.
"Holder", when used with respect to any Junior Subordinated Note, means
the Person in whose name the Junior Subordinated Note is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of the particular series of Junior Subordinated
Notes established as contemplated by Section 301.
"Interest Payment Date", when used with respect to any series of Junior
Subordinated Notes, means the dates established for the payment of interest
thereon, as provided in the supplemental indenture for such series.
"Junior Subordinated Note" has the meaning stated in the first recital
of this Indenture and more particularly means any Junior Subordinated Notes
authenticated and delivered under this Indenture.
"Maturity", when used with respect to any Junior Subordinated Note,
means the date on which the principal of such Junior Subordinated Note or an
installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for
redemption or otherwise.
"Notes Guarantee" means the agreement of the Guarantor set forth in Section
1401.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or the Guarantor, and who shall be acceptable to the
Trustee.
"Outstanding", when used with respect to Junior Subordinated Notes,
means, as of the date of determination, all Junior Subordinated Notes
theretofore authenticated and delivered under this Indenture, except:
(i) Junior Subordinated Notes theretofore canceled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Junior Subordinated Notes for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Junior Subordinated
Notes; provided that if such Junior Subordinated Notes are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Junior Subordinated Notes that have been paid or in
exchange for or in lieu of which other Junior Subordinated Notes have
been authenticated and delivered pursuant to this Indenture, other than
any such Junior Subordinated Notes in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Junior
Subordinated Notes are held by a bona fide purchaser in whose hands
such Junior Subordinated Notes are valid obligations of the Company;
and
(iv) Junior Subordinated Notes, or portions thereof, converted
into or exchanged for another security if the terms of such Junior
Subordinated Notes provide for such conversion or exchange;
provided, however, that in determining, during any period in which any Junior
Subordinated Notes of a series are owned by any Person other than the Company,
the Guarantor or any Affiliate thereof, whether the Holders of the requisite
principal amount of Outstanding Junior Subordinated Notes of such series have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Junior Subordinated Notes of such series owned by the Company, the
Guarantor or any Affiliate thereof shall be disregarded and deemed not to be
Outstanding. In determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Junior Subordinated Notes that the Trustee knows to be so owned by
the Company, the Guarantor or an Affiliate of the Company or the Guarantor in
the above circumstances shall be so disregarded. Junior Subordinated Notes so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Junior Subordinated Notes and that the pledgee is not
the Company, the Guarantor or any Affiliate of the Company or the Guarantor.
"Paying Agent means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Junior Subordinated Notes
on behalf of the Company.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Junior Subordinated Note means
every previous Junior Subordinated Note evidencing all or a portion of the same
debt as that evidenced by such particular Junior Subordinated Note; and, for the
purposes of this definition, any Junior Subordinated Note authenticated and
delivered under Section 304 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Junior Subordinated Note shall be deemed to evidence
the same debt as the mutilated, destroyed, lost or stolen Junior Subordinated
Note.
"Property Trustee", when used with respect to the Junior Subordinated
Notes of any series, means the Person designated as such in the related Trust
Agreement.
"Redemption Date", when used with respect to any Junior Subordinated
Note to be redeemed, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Junior Subordinated
Note to be redeemed, means the price at which it is to be redeemed pursuant to
this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Junior Subordinated Notes of any series means the date specified for
that purpose as contemplated by Section 301, whether or not a Business Day.
"Responsible Officer", when used with respect to the Trustee, means any
managing director, any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer, or any other officer of the
Corporate Trust and Agency Group of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Securities Trust" means any statutory business trust formed by the
Company or an Affiliate to issue Trust Securities, the proceeds of which will be
used to purchase Junior Subordinated Notes of one or more series.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 303.
"Senior Indebtedness" means, with respect to any Person, (i) any
payment due in respect of indebtedness of such Person, whether outstanding at
the date of execution of this Subordinated Note Indenture or thereafter
incurred, created, or assumed, (a) in respect of money borrowed (including any
financial derivative, hedging or futures contract or similar instrument) and (b)
evidenced by securities, debentures, bonds, notes or other similar instruments
issued by such Person which, by their terms, are senior or senior subordinated
debt securities including, without limitation, all obligations under its
indentures with various trustees; (ii) all capital lease obligations; (iii) all
obligations issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business and long-term purchase obligations); (iv) all
obligations for the reimbursement of any letter of credit, banker's acceptance,
security purchase facility or similar credit transaction; (v) all obligations of
the type referred to in clauses (i) through (iv) above of other Persons the
payment of which such Person is responsible or liable as obligor, guarantor or
otherwise; and (vi) all obligations of the type referred to in clauses (i)
through (v) above of other Persons secured by any lien on any property or asset
of such Person (whether or not such obligation is assumed by such Person),
except for (1) any such indebtedness that is by its terms subordinated to or
pari passu with the Junior Subordinated Notes and (2) any unsecured indebtedness
between or among the such Person or its Affiliates. Such Senior Indebtedness
shall continue to be entitled to the benefits of the subordination provisions
contained in Article Thirteen irrespective of any amendment, modification or
waiver of any term of such Senior Indebtedness.
"Special Record Date" for the payment of any Defaulted Interest on the
Junior Subordinated Notes of any series means a date fixed by the Trustee
pursuant to Section 305.
"Stated Maturity", when used with respect to any Junior Subordinated
Note or any installment of principal thereof or interest thereon, means the date
specified in such Junior Subordinated Note as the fixed date on which the
principal of such Junior Subordinated Note or such installment of principal or
interest is due and payable.
"Trust Agreement", when used with respect to a Securities Trust, means
the agreement or instrument that governs the affairs of such Securities Trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, and any reference herein to the Trust Indenture Act or a particular
provision thereof shall mean such Trust Indenture Act or provision, as the case
may be, as amended or replaced from time to time.
"Trust Securities" means the securities issued by a Securities Trust
evidencing the entire beneficial interest therein.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
with respect to one or more series of Junior Subordinated Notes pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Junior
Subordinated Notes of any series shall mean the Trustee with respect to Junior
Subordinated Notes of that series.
"Vice President", when used with respect to the Company, the Guarantor
or the Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president."
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent, shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The principal amount and serial numbers of Junior Subordinated
Notes held by any Person, and the date of holding the same, shall be proved by
the Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Junior Subordinated Note
shall bind every future Holder of the same Junior Subordinated Note and the
Holder of every Junior Subordinated Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Junior Subordinated Note.
(e) The fact and date of execution of any such instrument or writing
and the authority of the Person executing the same may also be proved in any
other manner which the Trustee deems sufficient; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in
this Section.
(f) If the Company shall solicit from the Holders of Junior
Subordinated Notes of any series any Act, the Company may, at its option, by
Board Resolution, fix in advance a record date for the determination of Holders
of Junior Subordinated Notes entitled to take such Act, but the Company shall
have no obligation to do so. Any such record date shall be fixed at the
Company's discretion. If such a record date is fixed, such Act may be sought or
given before or after the record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders of Junior
Subordinated Notes for the purpose of determining whether Holders of the
requisite proportion of Junior Subordinated Notes of such series Outstanding
have authorized or agreed or consented to such Act, and for that purpose the
Junior Subordinated Notes of such series Outstanding shall be computed as of
such record date.
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder of a Junior Subordinated Note or by
the Company shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust and Agency Group,
or
(2) the Company or the Guarantor by the Trustee or by any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company or the Guarantor addressed
to the attention of its Secretary, 270 Peachtree Street, N.W., Atlanta,
Georgia 30303, with a copy to Southern Company Services, Inc., 270
Peachtree Street, N.W., Atlanta, Georgia 30303, Attention: Corporate
Finance Department, or at any other address previously furnished in
writing to the Trustee by the Company or the Guarantor.
SECTION 106. NOTICE TO HOLDERS OF JUNIOR SUBORDINATED NOTES; WAIVER.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Junior Subordinated Notes of any event, such
notice shall be sufficiently given if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at his address as it appears in
the Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such Notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Junior Subordinated Notes shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required to be a part of and govern this
Indenture, such required provision shall control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Junior Subordinated
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Junior Subordinated Notes, express or
implied, shall give to any Person, other than the parties hereto, their
successors hereunder and the Holders of Junior Subordinated Notes and, to the
extent provided in Section 1403, the holders of Senior Indebtedness or Trust
Securities, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE, THE JUNIOR SUBORDINATED NOTES AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK. THE COMPANY AND THE GUARANTOR EACH HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND ANY COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY
OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO
OR IN CONNECTION WITH THIS INDENTURE OR THE TRANSACTIONS CONTEMPLATED THEREBY,
AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY AND THE GUARANTOR
EACH HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS INDENTURE OR ANY DOCUMENT OR ANY
INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED
IN OR BY SUCH COURTS. THE COMPANY AND THE GUARANTOR EACH AGREES THAT SERVICE OF
PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR
NOTICES SET FORTH IN THIS INDENTURE OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW
YORK.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Junior Subordinated Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Junior
Subordinated Notes) payment of interest or principal (and premium, if any) need
not be made on such date, but may be made on the next succeeding Business Day,
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
FORMS OF JUNIOR SUBORDINATED NOTES
SECTION 201. FORMS GENERALLY.
The Junior Subordinated Notes of each series shall be in substantially
the form appended to the supplemental indenture authorizing such series, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Junior Subordinated Notes, as evidenced by their
execution of the Junior Subordinated Notes.
The Junior Subordinated Notes of each series shall be issuable in
registered form without coupons.
The definitive Junior Subordinated Notes may be printed, typewritten,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Junior
Subordinated Notes, as evidenced by their execution of such Junior Subordinated
Notes.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The form of the Trustee's Certificate of Authentication for a series of
Junior Subordinated Notes shall be in substantially the form appended to the
Supplemental Indenture authorizing such series.
SECTION 203.JUNIOR SUBORDINATED NOTES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Section 301 that the
Junior Subordinated Notes of a particular series are to be issued in whole or in
part in the form of one or more Global Securities, then the Company shall
execute and the Trustee shall, in accordance with Section 302 and the Company
Order delivered to the Trustee thereunder, authenticate and deliver such Global
Security or Securities, which (i) shall represent, and shall be denominated in
an amount equal to the aggregate principal amount of the Outstanding Junior
Subordinated Notes of such series to be represented by such Global Security or
Securities, (ii) may provide that the aggregate amount of Outstanding Junior
Subordinated Notes represented thereby may from time to time be increased or
reduced to reflect exchanges, (iii) shall be registered in the name of the
Depositary for such Global Security or Securities or its nominee, (iv) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction and (v) shall bear a legend in accordance with the requirements of
the Depositary.
(b) Notwithstanding any other provision of this Section 203 or of
Section 303, subject to the provisions of paragraph (c) below, unless the terms
of a Global Security expressly permit such Global Security to be exchanged in
whole or in part for individual Junior Subordinated Notes, a Global Security may
be transferred, in whole but not in part and in the manner provided in Section
303, only to a nominee of the Depositary for such Global Security, or to the
Depositary, or to a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.
(c) (1) If at any time the Depositary for a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary
for such Global Security or if at any time the Depositary for the
Junior Subordinated Notes for such series shall no longer be eligible
or in good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Company shall
appoint a successor Depositary with respect to such Global Security. If
a successor Depositary for such Global Security is not appointed by the
Company within 90 days after the Company receives such notice or
becomes aware of such ineligibility, the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and
delivery of individual Junior Subordinated Notes of such series in
exchange for such Global Security, will authenticate and deliver
individual Junior Subordinated Notes of such series of like tenor and
terms in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global
Security.
(2) The Company may at any time and in its sole discretion
determine that the Junior Subordinated Notes of any series issued or
issuable in the form of one or more Global Securities shall no longer
be represented by such Global Security or Securities. In such event the
Company will execute, and the Trustee, upon receipt of a Company
Request for the authentication and delivery of individual Junior
Subordinated Notes of such series in exchange in whole or in part for
such Global Security, will authenticate and deliver individual Junior
Subordinated Notes of such series of like tenor and terms in definitive
form in an aggregate principal amount equal to the principal amount of
such Global Security or Securities representing such series in exchange
for such Global Security or Securities.
(3) If specified by the Company pursuant to Section 301 with
respect to Junior Subordinated Notes issued or issuable in the form of
a Global Security, the Depositary for such Global Security may
surrender such Global Security in exchange in whole or in part for
individual Junior Subordinated Notes of such series of like tenor and
terms in definitive form on such terms as are acceptable to the Company
and such Depositary. Thereupon the Company shall execute, and the
Trustee shall authenticate and deliver, without service charge, (A) to
each Person specified by such Depositary a new Junior Subordinated Note
or Notes of the same series of like tenor and terms and of any
authorized denomination as requested by such Person in aggregate
principal amount equal to and in exchange for such Person's beneficial
interest in the Global Security; and (B) to such Depositary a new
Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Junior Subordinated Notes delivered to Holders thereof.
(4) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee will authenticate
and deliver individual Junior Subordinated Notes in definitive form in
authorized denominations. Upon the exchange of the entire principal
amount of a Global Security for individual Junior Subordinated Notes,
such Global Security shall be cancelled by the Trustee. Except as
provided in the preceding paragraph, Junior Subordinated Notes issued
in exchange for a Global Security pursuant to this Section shall be
registered in such names and in such authorized denominations as the
Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the
Trustee. Provided that the Company and the Trustee have so agreed, the
Trustee shall deliver such Junior Subordinated Notes to the Persons in
whose names the Junior Subordinated Notes are registered.
(5) Any endorsement of a Global Security to reflect the
amount, or any increase or decrease in the amount, or changes in the
rights of Holders, of Outstanding Junior Subordinated Notes represented
thereby shall be made in such manner and by such Person or Persons as
shall be specified therein or in the Company Order to be delivered
pursuant to Section 302 with respect thereto. Subject to the provisions
of Section 302, the Trustee shall deliver and redeliver any such Global
Security in the manner and upon instructions given by the Person or
Persons specified therein or in the applicable Company Order. If a
Company Order pursuant to Section 302 has been, or simultaneously is,
delivered, any instructions by the Company with respect to such Global
Security shall be in writing but need not be accompanied by or
contained in an Officers' Certificate and need not be accompanied by an
Opinion of Counsel.
ARTICLE THREE
THE JUNIOR SUBORDINATED NOTES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Junior Subordinated Notes which may
be authenticated and delivered under this Indenture is unlimited.
The Junior Subordinated Notes may be issued in one or more series.
There may be established, pursuant to one or more indentures supplemental
hereto, prior to the issuance of Junior Subordinated Notes of any series,
(1) the title of the Junior Subordinated Notes of the series
(which shall distinguish the Junior Subordinated Notes of the series
from Junior Subordinated Notes of all other series);
(2) any limit upon the aggregate principal amount of the
Junior Subordinated Notes of the series which may be authenticated and
delivered under this Indenture (except for Junior Subordinated Notes
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Junior Subordinated Notes of the
series pursuant to Sections 203, 303, 304, 907 or 1107);
(3) the Person to whom interest on a Junior Subordinated Note
of the series shall be payable if other than the Person in whose name
that Junior Subordinated Note (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for
such interest;
(4) the date or dates on which the principal of the Junior
Subordinated Notes of the series is payable, and the right, if any, to
extend or advance the Stated Maturity of the Junior Subordinated Notes
and the conditions to such extension or advancement;
(5) the rate or rates at which the Junior Subordinated Notes
of the series shall bear interest, if any, or any method by which such
rate or rates shall be determined, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which such
interest shall be payable, the Regular Record Date for the interest
payable on Junior Subordinated Notes on any Interest Payment Date and
the basis upon which interest shall be calculated if other than that of
a 360-day year consisting of twelve 30-day months;
(6) the place or places where the principal of (and premium, if
any) and interest, if any, on Junior Subordinated Notes of the series
shall be payable;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which Junior Subordinated Notes
of the series may be redeemed, in whole or in part, at the option of
the Company;
(8) the obligation, if any, of the Company to redeem or
purchase Junior Subordinated Notes of the series pursuant to any
sinking fund 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 terms and conditions upon which, Junior Subordinated
Notes of the series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;
(9) the denominations in which Junior Subordinated Notes of the
series shall be issuable;
(10) if the amount of payments of principal of (and premium,
if any) or interest (including Additional Interest) on the Junior
Subordinated Notes of the series may be determined with reference to an
index or formula, the manner in which such amounts shall be determined;
(11) if other than the principal amount thereof, the portion
of the principal amount of Junior Subordinated Notes of the series
which shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502;
(12) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company as provided herein
pertaining to the Junior Subordinated Notes of the series, and any
change in the rights of the Trustee or Holders of such series pursuant
to Section 901 or 902;
(13) any additions to the definitions currently set forth in this
Indenture with respect to such series;
(14) whether the Junior Subordinated Notes of the series shall
be issued in whole or in part in the form of a Global Security or
Securities; the terms and conditions, if any, upon which such Global
Security or Securities may be exchanged in whole or in part for
certificated Junior Subordinated Notes of such series and of like tenor
of any authorized denomination and the circumstances under which such
exchange may occur, if other than in the manner provided for in Section
203; the Depositary for such Global Security or Securities; and the
form of any legend or legends to be borne by any such Global Security
in addition to or in lieu of the legend referred to in Section 203;
(15) the right, if any, of the Company to extend the interest
payment periods of such series of Junior Subordinated Notes, including
the maximum duration of any such extension or extensions, the
Additional Interest, if any, payable on such Junior Subordinated Notes
during any extension of the interest payment period and any notice
(which shall include notice to the Trustee) that must be given upon the
exercise of such right to extend interest payment periods;
(16) any restriction or condition on the transferability of such
Junior Subordinated Notes;
(17) the terms of any right to convert or exchange such Junior
Subordination Notes into or for other securities or property of the
Company; and
(18) any other terms of the series.
All Junior Subordinated Notes of any one series shall be substantially
identical except as to the date or dates from which interest, if any, shall
accrue and denomination and except as may otherwise be provided in the terms of
such Junior Subordinated Notes determined or established as provided above. All
Junior Subordinated Notes of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened for issuances of
additional Junior Subordinated Notes of such series.
SECTION 302. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Junior Subordinated Notes shall be executed on behalf of the
Company by its Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Junior Subordinated Notes may be manual or facsimile.
Junior Subordinated Notes bearing the manual or facsimile signatures of
individuals who were at the time relevant to the authorization thereof the
proper officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Junior Subordinated Notes or did not hold
such offices at the date of such Junior Subordinated Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Junior Subordinated Notes of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Junior Subordinated
Notes, and the Trustee, in accordance with the Company Order, shall authenticate
and deliver such Junior Subordinated Notes. If all of the Junior Subordinated
Notes of any series are not to be issued at one time and if the supplemental
indenture establishing such series shall so permit, such Company Order may set
forth procedures acceptable to the Trustee for the issuance of such Junior
Subordinated Notes and determining the terms of particular Junior Subordinated
Notes of such series, such as interest rate, maturity date, date of issuance and
date from which interest shall accrue. In authenticating Junior Subordinated
Notes hereunder, and accepting the additional responsibilities under this
Indenture in relation to such Junior Subordinated Notes, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon:
(1) an Opinion of Counsel, to the effect that:
(a) the form and terms of such Junior
Subordinated Notes or the manner of determining such
terms have been established in conformity with the
provisions of this Indenture; and
(b) such Junior Subordinated Notes, when
authenticated and delivered by the Trustee and issued
by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of
the Company, enforceable in accordance with their
terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting the
enforcement of creditors' rights and to general
equity principles; and
(2) an Officers' Certificate stating, to the best knowledge of
each signer of such certificate, that no event which is, or after
notice or lapse of time would become, an Event of Default with respect
to any of the Junior Subordinated Notes shall have occurred and be
continuing.
The Trustee shall not be required to authenticate such Junior Subordinated Notes
if the issue of such Junior Subordinated Notes pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Junior
Subordinated Notes and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
If all the Junior Subordinated Notes of any series are not to be issued
at one time, it shall not be necessary to deliver an Opinion of Counsel and
Officers' Certificate at the time of issuance of each such Junior Subordinated
Note, but such opinion and certificate shall be delivered at or before the time
of issuance of the first Junior Subordinated Note of such series to be issued.
Each Junior Subordinated Note shall be dated the date of its
authentication.
No Junior Subordinated Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Junior Subordinated Note a certificate of authentication substantially in the
form provided for herein executed by the Trustee by manual signature, and such
certificate upon any Junior Subordinated Note shall be conclusive evidence, and
the only evidence, that such Junior Subordinated Note has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.
SECTION 303. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the office of the Security
Registrar designated pursuant to this Section 303 or Section 1002 a register
(referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Junior Subordinated Notes and of transfers of Junior Subordinated Notes. The
Trustee is hereby initially appointed as Security Registrar for the purpose of
registering Junior Subordinated Notes and transfers of Junior Subordinated Notes
as herein provided.
Subject to Section 203, upon surrender for registration of transfer of
any Junior Subordinated Note of any series at the office or agency maintained
for such purpose for such series, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Junior Subordinated Notes of the same series,
Stated Maturity and original issue date, of any authorized denominations and of
like tenor and aggregate principal amount.
Subject to Section 203, Junior Subordinated Notes of any series may be
exchanged, at the option of the Holder, for Junior Subordinated Notes of the
same series, Stated Maturity and original issue date, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Junior Subordinated Notes to be exchanged at any such office or agency.
Whenever any Junior Subordinated Notes are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Junior Subordinated Notes that the Holder making the exchange is entitled to
receive.
All Junior Subordinated Notes issued upon any registration of transfer
or exchange of Junior Subordinated Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Junior Subordinated Notes surrendered upon such registration
of transfer or exchange.
Every Junior Subordinated Note presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Junior Subordinated Notes, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Junior
Subordinated Notes, other than exchanges pursuant to Section 304, 907 or 1107
not involving any transfer.
The Company shall not be required (i) to issue, to register the
transfer of or to exchange Junior Subordinated Notes of any series during a
period of 15 days immediately preceding the date notice is given identifying the
serial numbers of the Junior Subordinated Notes of that series called for
redemption, or (ii) to issue, to register the transfer of or to exchange any
Junior Subordinated Notes so selected for redemption in whole or in part, except
the unredeemed portion of any Junior Subordinated Note being redeemed in part.
None of the Company, the Guarantor, the Trustee, any Paying Agent or
the Security Registrar will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 304. MUTILATED, DESTROYED, LOST AND STOLEN JUNIOR SUBORDINATED NOTES.
If any mutilated Junior Subordinated Note is surrendered to the
Trustee, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Junior Subordinated Note of the same series,
Stated Maturity and original issue date, and of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Junior
Subordinated Note and (ii) such security or indemnity as may be required by them
to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Junior Subordinated
Note has been acquired by a bona fide purchaser, the Company shall execute and
upon its request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Junior Subordinated Note, a new Junior Subordinated
Note of the same series, Stated Maturity and original issue date, and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Junior
Subordinated Note has become or is about to become due and payable, the Company
in its discretion may, instead of issuing a new Junior Subordinated Note, pay
such Junior Subordinated Note.
Upon the issuance of any new Junior Subordinated Note under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Junior Subordinated Note of any series issued pursuant to
this Section in lieu of any destroyed, lost or stolen Junior Subordinated Note
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Junior Subordinated Note shall be
at any time enforceable by anyone, and any such new Junior Subordinated Note
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Junior Subordinated Notes of that series
duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Junior Subordinated Notes.
SECTION 305. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Junior Subordinated Notes, interest (including Additional
Interest) on any Junior Subordinated Note that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Junior Subordinated Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest (including Additional Interest) on any Junior Subordinated
Note of any series that is payable, but is not punctually paid or duly provided
for on any Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in Clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Junior Subordinated Notes of
such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Junior Subordinated Note
of such series and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Junior Subordinated Notes of such series at
the address of such Holder as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Junior Subordinated Notes of such
series (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer
be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest
(including Additional Interest, if any) on the Junior Subordinated
Notes of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Junior
Subordinated Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Junior
Subordinated Note delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Junior Subordinated Note shall
carry the rights to interest accrued (including Additional Interest, if any) and
unpaid, and to accrue (including Additional Interest, if any), which were
carried by such other Junior Subordinated Note.
SECTION 306. PERSONS DEEMED OWNERS.
Prior to due presentment of a Junior Subordinated Note for registration
of transfer, the Company, the Guarantor, the Trustee and any agent of the
Company, the Guarantor or the Trustee may treat the Person in whose name such
Junior Subordinated Note is registered as the absolute owner of such Junior
Subordinated Note for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Section 305) interest (including Additional
Interest, if any) on such Junior Subordinated Note and for all other purposes
whatsoever, whether or not such Junior Subordinated Note be overdue, and neither
the Company, the Guarantor, the Trustee nor any agent of the Company, the
Guarantor or the Trustee shall be affected by notice to the contrary.
SECTION 307. CANCELLATION.
All Junior Subordinated Notes surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly cancelled by the Trustee. The Company may
at any time deliver to the Trustee for cancellation any Junior Subordinated
Notes previously authenticated and delivered hereunder which the Company may
have acquired in any manner whatsoever, and all Junior Subordinated Notes so
delivered shall be canceled by the Trustee. No Junior Subordinated Notes shall
be authenticated in lieu of or in exchange for any Junior Subordinated Notes
canceled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Junior Subordinated Notes held by the Trustee shall be
disposed of in accordance with a Company Order or, in the absence of such a
Company Order, in accordance with the Trustee's usual procedures and the Trustee
shall promptly deliver a certificate of disposition to the Company.
SECTION 308. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for Junior
Subordinated Notes of any series, interest on the Junior Subordinated Notes of
each series shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Junior Subordinated Notes herein expressly provided for) and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Junior Subordinated Notes theretofore
authenticated and delivered (other than (i) Junior
Subordinated Notes that have been destroyed, lost or stolen
and that have been replaced as provided for in Section 304 and
(ii) Junior Subordinated Notes for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have
been delivered to the Trustee for cancellation; or
(B) all such Junior Subordinated Notes not
theretofore delivered to the Trustee for cancellation have
become due and payable, or have been called for redemption,
and the Company, in the case of (B) above, has deposited or caused to
be deposited with the Trustee as funds in trust for the purpose
described above an amount sufficient to pay and discharge the entire
indebtedness on such Junior Subordinated Notes not theretofore
delivered to the Trustee for cancellation, for principal (and premium,
if any) and interest to the date of the Stated Maturity or Redemption
Date, as the case may be, or if later, the date of payment;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
In the event there are Junior Subordinated Notes of two or more series
hereunder, the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to Junior Subordinated Notes of all series as to which it is Trustee and
if the other conditions thereto are met. In the event there are two or more
Trustees hereunder, then the effectiveness of any such instrument shall be
conditioned upon receipt of such instruments from all Trustees hereunder.
If, subsequent to the date a discharge is effected pursuant to this
Section 401, Additional Interest (in excess of that established as of the date
such discharge is effected) becomes payable in respect of the series of Junior
Subordinated Notes discharged, in order to preserve the benefits of the
discharge established hereunder, the Company shall irrevocably deposit or cause
to be irrevocably deposited in accordance with the provisions of this Section
401, within ten Business Days prior to the date the first payment in respect of
any portion of such excess Additional Interest becomes due, such additional
funds as are necessary to satisfy the provisions of this Section 401 as if a
discharge were being effected as of the date of such subsequent deposit. Failure
to comply with the requirements of this paragraph shall result in the
termination of the benefits of the discharge established by this Section 401.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Junior Subordinated
Notes, and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company or an Affiliate acting as its own Paying Agent) as
the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Junior
Subordinated Notes of any series, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body or occasioned by the operation of Article
Thirteen):
(1) default in the payment of any interest upon any Junior
Subordinated Note of that series when it becomes due and payable on an
Interest Payment Date other than at Maturity, including Additional
Interest (as defined in clause (ii) of the definition thereof) in
respect thereof, and continuance of such default for a period of ten
(10) days; provided, however, that (i) a valid extension of the
interest payment period by the Company pursuant to the terms of a
supplemental indenture authorizing the Junior Subordinated Notes of
that series shall not constitute a default in the payment of interest
for this purpose and (ii) no such default shall be deemed to exist if,
on or prior to the date on which such interest became due, the
Guarantor shall have made a payment sufficient to pay such interest
pursuant to the Guarantee Agreement related to the Trust Securities of
the Securities Trust owning such series of Junior Subordinated Notes,
and shall have delivered a notice to the Trustee to that effect; or
(2) default in payment of Additional Interest (as defined in
clause (i) of the definition thereof) and the continuance of such
default for a period of ten (10) days; or
(3) default in the payment of the principal of, (or premium,
if any) or interest (including Additional Interest as defined in clause
(ii) of the definition thereof) on any Junior Subordinated Note of that
series at its Maturity; provided, however, that no such default in the
payment of principal (or premium, if any) or interest (including
Additional Interest as defined in clause (ii) of the definition
thereof) shall be deemed to exist if, on or prior to the date such
principal (and premium, if any) or interest (including Additional
Interest as defined in clause (ii) of the definition thereof) became
due, the Guarantor shall have made a payment sufficient to pay such
principal (and premium, if any) or interest (including Additional
Interest as defined in clause (ii) of the definition thereof) pursuant
to the Guarantee Agreement related to the Trust Securities of the
Securities Trust owning such series of Junior Subordinated Notes, and
shall have delivered a notice to the Trustee to that effect; or
(4) default in the deposit of any sinking fund payment, when
and as due by the terms of a Junior Subordinated Note of that series
and continuance of such default for a period of 3 Business Days; or
(5) default in the performance or breach of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of one or more series
of Junior Subordinated Notes other than that series), and continuance
of such default or breach for a period of 90 days after there has been
given, by registered or certified mail, to the Company by the Trustee,
or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Junior Subordinated Notes of that
series, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(6) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company or the
Guarantor in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company or the
Guarantor a bankrupt or insolvent, or approving as properly filed a
petition by one or more Persons other than the Company or the Guarantor
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company or the Guarantor under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official for the Company or the
Guarantor or for any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 90 consecutive days; or
(7) the commencement by the Company or the Guarantor of a case
or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
the Company or the Guarantor to the entry of a decree or order for
relief in respect of it in a case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or the Guarantor or of any substantial part of
its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company or the Guarantor in furtherance of any such
action; or
(8) any other Event of Default provided with respect to Junior
Subordinated Notes of that series in the supplemental indenture
authorizing such series.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Junior Subordinated Notes of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Junior Subordinated Notes of that series may declare the principal
amount (or such portion of the principal amount as may be specified in the terms
of that series) of all of the Junior Subordinated Notes of that series to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Junior Subordinated Notes of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of not less than a majority in
principal amount of the Outstanding Junior Subordinated Notes of that series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Additional Interest)
on all Junior Subordinated Notes of that series,
(B) the principal of (and premium, if any) any Junior
Subordinated Notes of that series which have become due
otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in
such Junior Subordinated Notes,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest (including any
Additional Interest) at the rate or rates prescribed therefor
in such Junior Subordinated Notes, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due to the Trustee under
Section 607; and
(2) all Events of Default with respect to Junior Subordinated
Notes of that series, other than the non-payment of the principal of
Junior Subordinated Notes of that series which have become due solely
by such declaration of acceleration, have been cured or waived as
provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if an Event of Default occurs under Section
501(1), (2), (3) or (4) with respect to any Junior Subordinated Notes the
Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Junior Subordinated Notes, the whole amount then due and payable
on such Junior Subordinated Notes for principal (and premium, if any) and
interest (including Additional Interest, if any) and, to the extent that payment
of such interest shall be legally enforceable, interest on any overdue principal
(and premium, if any) and on any overdue interest (including Additional
Interest, if any), at the rate or rates prescribed therefor in such Junior
Subordinated Notes, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due to the Trustee under Section
607.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Junior Subordinated Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Junior
Subordinated Notes, wherever situated.
If an Event of Default with respect to Junior Subordinated Notes of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Junior
Subordinated Notes of such series by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Junior
Subordinated Notes or the property of the Company or of such other obligor or
their creditors, the Trustee (irrespective of whether the principal of the
Junior Subordinated Notes shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Junior Subordinated Notes and to file such other papers
or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due to the Trustee under
Section 607) and of the Holders of Junior Subordinated Notes allowed in
such judicial proceeding, and
(2) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Junior Subordinated Notes to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Junior Subordinated Notes, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Junior
Subordinated Note any plan of reorganization, arrangement, adjustment or
composition affecting the Junior Subordinated Notes or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of a Junior Subordinated Note in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF JUNIOR
SUBORDINATED NOTES.
All rights of action and claims under this Indenture or the Junior
Subordinated Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Junior Subordinated Notes or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Junior
Subordinated Notes in respect of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Junior Subordinated Notes, and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
First: To the payment of all amounts due the Trustee under
Section 607; and
Second: Subject to Article Thirteen, to the payment of the
amounts then due and unpaid for principal of (and premium, if any) and
interest (including Additional Interest, if any) on the Junior
Subordinated Notes in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Junior
Subordinated Notes for principal (and premium, if any) and interest
(including Additional Interest, if any), respectively; and
Third: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Junior Subordinated Note of any series shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Junior
Subordinated Notes of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Junior Subordinated Notes of that series shall have
made written request to the Trustee to institute proceedings in respect
of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Junior Subordinated
Notes of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all of such Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision in this Indenture but subject to
Article Thirteen, (1) the Holder of any Junior Subordinated Notes shall have the
right, which is absolute and unconditional, to receive payment of the principal
of (and premium, if any) and (subject to Section 305) interest (including any
Additional Interest) on such Junior Subordinated Note on the due dates expressed
in such Junior Subordinated Note (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder; and
(2) so long as the Junior Subordinated Notes of any series are held by a
Securities Trust, a registered holder of preferred or capital securities issued
by such Securities Trust may institute a legal proceeding directly against the
Company (or against the Guarantor pursuant to the Notes Guarantee), without
first instituting a legal proceeding directly against or requesting or directing
that action be taken by the Property Trustee of such Securities Trust or any
other Person, for enforcement of payment to such registered holder of principal
of or interest on Junior Subordinated Notes of such series having a principal
amount equal to the aggregate stated liquidation amount of such preferred or
capital securities of such registered holder on or after the due dates therefor
specified or provided for in the Junior Subordinated Notes of such series.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of a Junior Subordinated Note has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company, the
Guarantor, the Trustee and the Holders of Junior Subordinated Notes shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Junior Subordinated Notes in the last
paragraph of Section 304, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Junior Subordinated Notes is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Junior
Subordinated Note to exercise any right or remedy upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders of Junior Subordinated Notes
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders of Junior Subordinated Notes.
SECTION 512. CONTROL BY HOLDERS OF JUNIOR SUBORDINATED NOTES.
The Holders of not less than a majority in principal amount of the
Outstanding Junior Subordinated Notes of any series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Junior Subordinated Notes of such series, provided
that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and could not involve the Trustee in
personal liability in circumstances where reasonable indemnity would
not be adequate, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Junior Subordinated Notes of any series may, on behalf of the
Holders of all the Junior Subordinated Notes of such series, waive any past
default hereunder with respect to such series and its consequences, except a
default
(1) in the payment of the principal of (or premium, if any) or
interest (including Additional Interest) on any Junior Subordinated
Note of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Junior Subordinated Note of such series
affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Junior
Subordinated Note by his acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company or the Guarantor, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Junior Subordinated Notes of any
series, or to any suit instituted by any Holder of any Junior Subordinated Note
for the enforcement of the payment of the principal of (or premium, if any) or
interest (including Additional Interest) on any Junior Subordinated Note on or
after the Stated Maturity or Maturities expressed in such Junior Subordinated
Note (or, in the case of redemption, on or after the Redemption Date).
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default with respect to
Junior Subordinated Notes of any series,
(1) the Trustee undertakes to perform, with respect to Junior
Subordinated Notes of such series, such duties and only such duties as
are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
and
(2) in the absence of bad faith on its part, the Trustee may,
with respect to Junior Subordinated Notes of such series, conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to Junior Subordinated
Notes of any series has occurred and is continuing, the Trustee shall exercise,
with respect to Junior Subordinated Notes of such series, such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Junior Subordinated Notes of any series relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Junior
Subordinated Notes of such series; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any default hereunder with
respect to the Junior Subordinated Notes of any series, the Trustee shall
transmit by mail to all Holders of Junior Subordinated Notes of such series
entitled to receive reports pursuant to Section 313(c) of the Trust Indenture
Act, notice of all defaults hereunder known to the Trustee, unless such default
shall have been cured or waived; provided, however, that, except in the case of
a default in the payment of the principal of (or premium, if any) or interest
(including Additional Interest) on any Junior Subordinated Note of such series
or in the payment of any sinking fund installment with respect to Junior
Subordinated Notes of such series, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the
Holders of Junior Subordinated Notes of such series; and provided, further, that
in the case of any default of the character specified in Section 501(5) with
respect to Junior Subordinated Notes of such series, no such notice to Holders
shall be given until at least 45 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Junior Subordinated Notes of such series.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and a resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders of Junior Subordinated Notes of any
series pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity satisfactory to
the Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be charged with knowledge of any
Event of Default with respect to the Junior Subordinated Notes of any
series for which it is acting as Trustee unless either (1) a
Responsible Officer of the Trustee shall have actual knowledge of the
Event of Default or (2) written notice of such Event of Default shall
have been given to the Trustee by the Company, any other obligor on
such Junior Subordinated Notes or by any Holder of such Junior
Subordinated Notes.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF JUNIOR SUBORDINATED
NOTES.
The recitals contained herein and in the Junior Subordinated Notes
(except the Trustee's certificates of authentication) shall be taken as the
statements of the Company, and the Trustee or any Authenticating Agent assumes
no responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Junior Subordinated
Notes. The Trustee or any Authenticating Agent shall not be accountable for the
use or application by the Company of Junior Subordinated Notes or the proceeds
thereof.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Trust Securities and shall be entitled to rely on the delivery to it
of a written notice by a Person representing himself to be a holder of a Trust
Security to establish that such Person is such a holder. The Trustee may
conclusively rely on an Officers' Certificate as evidence that the holders of
the necessary percentage of liquidation preference of Trust Securities have
taken any action contemplated hereunder and shall have no duty to investigate
the truth or accuracy of any statement contained therein.
SECTION 605. MAY HOLD JUNIOR SUBORDINATED NOTES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Junior Subordinated Notes and,
subject to Sections 608 and 613, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence, willful misconduct or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence,
willful misconduct or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Junior Subordinated
Notes upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of, premium, if any, or
interest, if any, on particular Junior Subordinated Notes.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire any conflicting interest, within
the meaning of the Trust Indenture Act, it shall, within 90 days after
ascertaining that it has such conflicting interest, either eliminate such
conflicting interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by federal or
state authority and qualified and eligible under this Article and otherwise
permitted by the Trust Indenture Act to act as Trustee under an Indenture
qualified under the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Junior
Subordinated Notes of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Junior Subordinated Notes of such series.
(c) The Trustee may be removed at any time with respect to the Junior
Subordinated Notes of any series by Act of the Holders of a majority in
principal amount of the Outstanding Junior Subordinated Notes of such series
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder of a Junior
Subordinated Note who has been a Holder of a Junior Subordinated Note
for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Junior Subordinated Notes, or (ii) subject to
Section 514, any Holder of a Junior Subordinated Note who has been a bona fide
Holder of a Junior Subordinated Note for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Junior
Subordinated Notes and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Junior Subordinated Notes of one or more series, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Junior Subordinated Notes of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Junior Subordinated Notes of one or more or all of such series and that at any
time there shall be only one Trustee with respect to the Junior Subordinated
Notes of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Junior Subordinated Notes of any series shall be appointed by Act
of the Holders of a majority in principal amount of the Outstanding Junior
Subordinated Notes of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Junior Subordinated Notes
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Junior Subordinated
Notes of any series shall have been so appointed by the Company or the Holders
of Junior Subordinated Notes and accepted appointment in the manner required by
Section 611, any Holder of a Junior Subordinated Note who has been a bona fide
Holder of a Junior Subordinated Note of such series for at least six months may,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Junior Subordinated Notes of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Junior Subordinated Notes of any series and
each appointment of a successor Trustee with respect to the Junior Subordinated
Notes of any series by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders of such series of Junior Subordinated Notes as
their names and addresses appear in the Security Register.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Junior Subordinated Notes, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Junior Subordinated Notes of one or more (but not all) series,
the Company, the retiring Trustee and each successor Trustee with respect to the
Junior Subordinated Notes of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Junior Subordinated Notes of that or those series to which the appointment
of such successor Trustee relates, (2) if the retiring Trustee is not retiring
with respect to all Junior Subordinated Notes, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Junior
Subordinated Notes of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Junior Subordinated Notes
of that or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect to the
Junior Subordinated Notes of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Junior Subordinated Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Junior Subordinated Notes so authenticated
with the same effect as if such successor Trustee had itself authenticated such
Junior Subordinated Notes.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Junior Subordinated Notes), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Company (or any such other obligor). For purposes of Section
311(b)(4) and (6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Company (or any such obligor) for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or merchandise previously
constituting the security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the Company
(or any such obligor) arising from the making, drawing, negotiating or incurring
of the draft, bill of exchange, acceptance or obligation.
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
At any time when any of the Junior Subordinated Notes remain
Outstanding the Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Junior Subordinated Notes that shall be
authorized to act on behalf of the Trustee to authenticate Junior Subordinated
Notes of such series issued upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 304, and Junior Subordinated Notes so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Junior Subordinated Notes by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of Junior
Subordinated Notes, if any, of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
The provisions of Sections 306, 604 and 605 shall be applicable to each
Authenticating Agent.
If an appointment with respect to one or more series is made pursuant
to this Section, the Junior Subordinated Notes of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This is one of the Junior Subordinated Notes of the series
designated therein referred to in the within-mentioned Indenture.
As Trustee
By
As Authenticating Agent
By
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than June 1 and December 1, in
each year, a list, in such form as the Trustee may reasonably require,
containing all the information in the possession or control of the
Company, or any of its Paying Agents other than the Trustee, as to the
names and addresses of the Holders of Junior Subordinated Notes as of
the preceding May 15 or November 15, as the case may be, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of the most recent Regular Record
Date;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall comply with the obligations imposed on it pursuant to
Section 312 of the Trust Indenture Act.
(b) Every Holder of Junior Subordinated Notes, by receiving and holding
the same, agrees with the Company, the Guarantor and the Trustee that neither
the Company, the Guarantor nor the Trustee nor any agent of any of them shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Junior Subordinated Notes in accordance
with Section 312(b) of the Trust Indenture Act, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 312(b) of the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with the first
May 15 after the first issuance of Junior Subordinated Notes pursuant to this
Indenture, if required by Section 313(a) of the Trust Indenture Act, the Trustee
shall transmit a brief report dated as of such May 15 with respect to any of the
events specified in such Section 313(a) that may have occurred since the later
of the immediately preceding May 15 and the date of this Indenture.
(b) The Trustee shall transmit the reports required by Section 313(b)
of the Trust Indenture Act at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted in the manner
and to the Persons required by Sections 313(c) and (d) of the Trust Indenture
Act.
SECTION 704. REPORTS BY COMPANY.
The Company, pursuant to Section 314(a) of the Trust Indenture Act,
shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended; or,
if the Company is not required to file information, documents or
reports pursuant to either of said Sections, then it shall file with
the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Securities Exchange Act of
1934, as amended, in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations;
(3) transmit, within 30 days after the filing thereof with the
Trustee, to the Holders of Junior Subordinated Notes, in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act,
such summaries of any information, documents and reports required to be
filed by the Company pursuant to paragraphs (1) and (2) of this Section
704 as may be required by rules and regulations prescribed from time to
time by the Commission; and
(4) notify the Trustee when and as the Junior Subordinated
Notes of any series become admitted to trading on any national
securities exchange.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. COMPANY AND GUARANTOR MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
Neither the Company nor the Guarantor shall consolidate with or merge
into any other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, unless
(1) in case the Company or the Guarantor shall consolidate
with or merge into another corporation or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, the
corporation formed by such consolidation or into which the Company or
the Guarantor is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company or
the Guarantor substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest
(including Additional Interest) on all the Junior Subordinated Notes
and the performance of every covenant of this Indenture on the part of
the Company or the Guarantor, as the case may be, to be performed or
observed;
(2) immediately after giving effect to such transactions, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company or the Guarantor, as the case may be, has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease complies with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
SECTION 802. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation by the Company or the Guarantor with or merger
by the Company or the Guarantor into any corporation or any conveyance, transfer
or lease of the properties and assets of the Company or the Guarantor
substantially as an entirety in accordance with Section 801, the successor
corporation formed by such consolidation or into which the Company or the
Guarantor is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or the Guarantor, as the case may be, under this Indenture with the
same effect as if such successor corporation had been named as the Company or
the Guarantor, as the case may be, herein, and thereafter, except in the case of
a lease, the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Junior Subordinated Notes.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders of Junior Subordinated Notes, the
Company and the Guarantor, when authorized by a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another corporation to the
Company or the Guarantor and the assumption by any such successor of
the covenants of the Company or the Guarantor herein and in the Junior
Subordinated Notes; or
(2) to add to the covenants of the Company or the Guarantor
for the benefit of the Holders of all or any series of Junior
Subordinated Notes (and if such covenants are to be for the benefit of
less than all series of Junior Subordinated Notes, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company or the Guarantor; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture, to change or eliminate any restrictions on the payment of
principal (or premium, if any) on Junior Subordinated Notes or to
permit the issuance of Junior Subordinated Notes in uncertificated
form, provided any such action shall not adversely affect the interests
of the Holders of Junior Subordinated Notes of any series in any
material respect; or
(5) to change or eliminate any of the provisions of this
Indenture with respect to any series of Junior Subordinated Notes
theretofore unissued; or
(6) to secure the Junior Subordinated Notes; or
(7) to establish the form or terms of Junior Subordinated Notes
of any series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Junior
Subordinated Notes of one or more series and to add to or change any of
the provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more than
one Trustee, pursuant to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make provisions with respect to matters or questions
arising under this Indenture, provided such action shall not adversely
affect the interests of the Holders of Junior Subordinated Notes of any
series or holders of outstanding Trust Securities in any material
respect; or
(10) subject to Section 903(a), to make any change in Articles
Thirteen and Fourteen that would limit or terminate the benefits
available to any holder of Senior Indebtedness under such Articles; or
(11) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the Trust Indenture Act or under
any similar federal statute hereafter enacted, and to add to this
Indenture such other provisions as may be expressly required by the
Trust Indenture Act; or
(12) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted security legends, if any,
to be placed on the Junior Subordinated Notes and other matters
required pursuant to applicable provisions herein and in any
supplemental indentures hereto which relate to the transfer and
exchange of the Junior Subordinated Notes or are otherwise necessary,
desirable or appropriate in connection with the issuance of the Junior
Subordinated Notes to holders of the Trust Securities in the event of a
distribution of Junior Subordinated Notes to such holders.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Junior Subordinated Notes of each series
affected by such supplemental indenture, by Act of said Holders delivered to the
Company, the Guarantor and the Trustee, the Company and the Guarantor, when
authorized by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Junior Subordinated
Notes of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Junior Subordinated Note affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Junior Subordinated
Note, or reduce the principal amount thereof or the rate of interest
(including Additional Interest) thereon or any premium payable upon the
redemption thereof, or change the method of calculating the rate of
interest thereon, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Junior Subordinated Notes of any series, the consent of
whose Holders is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults hereunder and
their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section 902, Section
513 or Section 1008, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Junior Subordinated Note affected thereby, provided,
however, that this clause shall not be deemed to require the consent of
any Holder of a Junior Subordinated Note with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 1008, or the deletion of this proviso, in accordance with the
requirements of Sections 611(b) and 901(8), or
(4) reduce any amount payable under, delay or defer the
required time of payment under, or impair the right to institute suit
to enforce any payment under the Notes Guarantee, or
(5) modify the provisions of this Indenture with respect to
the subordination of the Junior Subordinated Notes or the Notes
Guarantee in a manner adverse to such Holder.
SECTION 903. GENERAL PROVISIONS REGARDING SUPPLEMENTAL INDENTURE.
(a) A supplemental indenture entered into pursuant to Section 901 or
Section 902 may not make any change that adversely affects the rights under
Article Thirteen or Article Fourteen of any holder of Senior Indebtedness of the
Company or the Guarantor then outstanding unless the holders of such Senior
Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.
(b) A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Junior Subordinated Notes,
or which modifies the rights of the Holders of Junior Subordinated Notes of such
series with respect to such covenant or other provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Junior Subordinated
Notes of any other series.
(c) It shall not be necessary for any Act of Holders of Junior
Subordinated Notes under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act or
action shall approve the substance thereof.
SECTION 904. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.
SECTION 905. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Junior Subordinated Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 906. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 907. REFERENCE IN JUNIOR SUBORDINATED NOTES TO SUPPLEMENTAL INDENTURES.
Junior Subordinated Notes of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to this Article may,
and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Junior Subordinated Notes of any series so
modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding Junior
Subordinated Notes of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Junior Subordinated Notes that it will duly and punctually pay the principal of
(and premium, if any) and interest, including Additional Interest (subject to
the right of the Company to extend an interest payment period pursuant to the
terms of a supplemental indenture authorizing the Junior Subordinated Notes of
that series), on the Junior Subordinated Notes of that series in accordance with
the terms of the Junior Subordinated Notes and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company or its Affiliate will maintain an office or agency where
Junior Subordinated Notes of each series may be presented or surrendered for
payment, where Junior Subordinated Notes of that series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Junior Subordinated Notes of that series and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency in respect of any series of Junior Subordinated Notes or shall
fail to furnish the Trustee with the address thereof, such presentations and
surrenders of Junior Subordinated Notes of that series may be made and notices
and demands may be made or served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent to receive such
respective presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Junior Subordinated Notes of one or more series
may be presented or surrendered for any or all such purposes and may from time
to time rescind such designations. The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 1003. MONEY FOR JUNIOR SUBORDINATED NOTES PAYMENTS TO BE HELD IN TRUST.
If the Company or one of its Affiliates shall at any time act as its
own Paying Agent with respect to any series of Junior Subordinated Notes, it
will, on or before each due date of the principal of (and premium, if any) or
interest (including Additional Interest, if any) on any of the Junior
Subordinated Notes of that series, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or interest (including Additional Interest, if any) so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so
to act.
Whenever the Company shall have one or more Paying Agents for any
series of Junior Subordinated Notes, it will, prior to each due date of the
principal of (and premium, if any) or interest (including Additional Interest,
if any) on any Junior Subordinated Notes of that series, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium, if any) or interest
(including Additional Interest, if any) so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal, premium or
interest (including Additional Interest, if any), and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent for any series of Junior
Subordinated Notes other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest (including Additional Interest, if
any) on Junior Subordinated Notes of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Junior Subordinated Notes of that series) in
the making of any payment of principal of (and premium, if any) or
interest (including Additional Interest, if any) on the Junior
Subordinated Notes of that series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest (including Additional Interest, if any) on any Junior
Subordinated Note of any series and remaining unclaimed for two years after such
principal (and premium, if any) or interest (including Additional Interest, if
any) has become due and payable shall be paid to the Company on Company Request,
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Junior Subordinated Note shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in a newspaper of general circulation in New York City notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. ADDITIONAL INTEREST.
If the Junior Subordinated Notes of a series provide for the payment of
Additional Interest (for purposes of this Section 1004, as defined in clause (i)
of the definition thereof) to the Holders of such Junior Subordinated Notes,
then the Company shall pay to each Holder of such Securities the Additional
Interest as provided therein.
Except as otherwise provided in or pursuant to this Indenture, if the
Junior Subordinated Notes of a series provide for the payment of Additional
Interest, at least 10 days prior to the first Interest Payment Date with respect
to that series of Junior Subordinated Notes upon which such Additional Interest
shall be payable (or, if the Junior Subordinated Notes of that series shall not
bear interest prior to Maturity, the first day on which a payment of principal
and any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company will furnish the Trustee and the Company's Paying Agents, if other than
the Trustee or the Company, with an Officers' Certificate stating the amount of
the Additional Interest payable per minimum authorized denomination of such
Junior Subordinated Notes (and, if such Additional Interest is payable only with
respect to particular Junior Subordinated Notes, then the names of the Holders
of such Junior Subordinated Notes).
SECTION 1005. CORPORATE EXISTENCE.
Subject to Article Eight, each of the Company and the Guarantor will do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and its rights (charter and statutory) and
franchises; provided, however, that neither the Company nor the Guarantor shall
be required to preserve any such right or franchise if its Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of its business, and that the loss thereof is not disadvantageous in any
material respect to the Holders.
SECTION 1006. LIMITATIONS ON DIVIDEND AND CERTAIN OTHER PAYMENTS.
The Company and the Guarantor each covenants, for the benefit of the
Holders of each series of Junior Subordinated Notes, that, subject to the next
succeeding sentence, (a) neither the Company nor the Guarantor shall declare or
pay any dividend or make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock,
and (b) neither the Company nor the Guarantor shall make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by it which rank pari passu with
or junior to the Junior Subordinated Notes or the Notes Guarantee, (a) if at
such time the Company shall have given notice of its election to extend an
interest payment period for such series of Junior Subordinated Notes and such
extension shall be continuing, (b) if at such time the Guarantor shall be in
default with respect to its payment or other obligations under (A) the Guarantee
Agreement with respect to the series of Trust Securities, if any, related to
such series of Junior Subordinated Notes or (B) the Notes Guarantee related to
such series of Junior Subordinated Notes, or (C) if at such time an Event of
Default hereunder with respect to such series of Junior Subordinated Notes shall
have occurred and be continuing. The preceding sentence, however, shall not
restrict (i) any of the actions described in the preceding sentence resulting
from any reclassification of the Company's or the Guarantor's capital stock or
the exchange or conversion of one class or series of the Company's or the
Guarantor's capital stock for another class or series of the Company's or the
Guarantor's capital stock, (ii) the purchase of fractional interests in shares
of the Company's or the Guarantor's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iii) dividends, payments or distributions payable in shares of
capital stock, (iv) redemptions, purchases or other acquisitions of shares of
capital stock in connection with any employment contract, incentive plan,
benefit plan or other similar arrangement of the Guarantor or any of its
subsidiaries or in connection with a dividend reinvestment or stock purchase
plan, or (v) any declaration of a dividend in connection with implementation of
any stockholders' rights plan, or the issuance of rights, stock or other
property under any such plan, or the redemption, repurchase or other acquisition
of any such rights pursuant thereto.
SECTION 1007. STATEMENT AS TO COMPLIANCE.
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, a written statement, which need not comply with Section
102, signed by the principal executive officer, the principal financial officer
or the principal accounting officer of the Company, as to his or her knowledge
of the Company's compliance with all conditions and covenants under this
Indenture. For purposes of this Section 1007, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
(b) The Company shall deliver to the Trustee, no later than the
Business Day on which the event occurs, written notice of the liquidation,
dissolution or winding-up of a Securities Trust if such liquidation, dissolution
or winding-up would occur earlier than the Stated Maturity of the Junior
Subordinated Notes owned by such Securities Trust.
(c) The Company shall deliver to the Trustee, within five days after
the occurrence thereof, written notice of any event which after notice or lapse
of time or both would become an Event of Default pursuant to Section 501.
SECTION 1008. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1005 and 1006 with respect to
the Junior Subordinated Notes of any series if before the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Junior Subordinated Notes of such series shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
SECTION 1009. COVENANTS REGARDING TRUST.
For so long as the Trust Securities remain outstanding, the Company
covenants (i) to directly or indirectly maintain 100% ownership of the Common
Securities (as defined in the Trust Agreement relating to such securities) of
the Trust; provided, however, that any permitted successor of the Company
hereunder may succeed to the Company's ownership of such Common Securities, and
(ii) to use its reasonable efforts to cause the Trust (a) to remain a statutory
business trust, except in connection with the distribution of Junior
Subordinated Notes to the holders of Trust Securities in liquidation of the
Trust, the redemption of all of the Trust Securities of the Trust, or certain
mergers, consolidations or amalgamations, each as permitted under the Trust
Agreement, and (b) to otherwise continue to be classified as a grantor trust for
United States federal income tax purposes.
ARTICLE ELEVEN
REDEMPTION OF JUNIOR SUBORDINATED NOTES
SECTION 1101. APPLICABILITY OF ARTICLE.
Junior Subordinated Notes of any series which are redeemable before
their Stated Maturity shall be redeemable in accordance with their terms and
(except as otherwise specified as contemplated by Section 301 for Junior
Subordinated Notes of any series) in accordance with this Article.
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Junior Subordinated Notes
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of all of the Junior Subordinated Notes of any series,
the Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee and the
related Property Trustee), notify the Trustee and the related Property Trustee
in writing of such Redemption Date. In case of any redemption at the election of
the Company of less than all the Junior Subordinated Notes of any series, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee and the
related Property Trustee), notify the Trustee and the related Property Trustee
in writing of such Redemption Date and of the principal amount of Junior
Subordinated Notes of such series to be redeemed. In the case of any redemption
of Junior Subordinated Notes (i) prior to the expiration of any restriction on
such redemption provided in the terms of such Junior Subordinated Notes or
elsewhere in this Indenture, or (ii) pursuant to an election of the Company
which is subject to a condition specified in the terms of such Junior
Subordinated Notes, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction or condition.
SECTION 1103. SELECTION BY TRUSTEE OF JUNIOR SUBORDINATED NOTES TO BE REDEEMED.
If the Junior Subordinated Notes are registered in the name of only one
Holder, any partial redemptions shall be pro rata. If the Junior Subordinated
Notes are held in definitive form by more than one Holder and if less than all
the Junior Subordinated Notes of any series are to be redeemed, the particular
Junior Subordinated Notes to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Junior
Subordinated Notes of such series not previously called for redemption, by lot
or other such method as the Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Junior Subordinated Notes of that series or any
integral multiple thereof) of the principal amount of Junior Subordinated Notes
of such series of a denomination larger than the minimum authorized denomination
for Junior Subordinated Notes of that series.
The Trustee shall promptly notify the Company in writing of the Junior
Subordinated Notes selected for redemption and, in the case of any Junior
Subordinated Notes selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Junior Subordinated Notes
shall relate, in the case of any Junior Subordinated Notes redeemed or to be
redeemed only in part, to the portion of the principal amount of such Junior
Subordinated Notes which has been or is to be redeemed.
SECTION 1104. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in Section
106 to the Holders of Junior Subordinated Notes to be redeemed not less than 30
nor more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Junior Subordinated Notes
of any series are to be redeemed, the identification (and, in the case
of partial redemption, the principal amounts) of the particular Junior
Subordinated Notes to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Junior Subordinated Note to be
redeemed and, if applicable, that interest thereon will cease to accrue
on and after said date,
(5) the place or places where such Junior Subordinated Notes are
to be surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Junior Subordinated Notes to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 1105. DEPOSIT OF REDEMPTION PRICE.
Except as otherwise provided in a supplemental indenture pursuant to
Section 301, prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company or its Affiliate is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 1003)
an amount of money sufficient to pay the Redemption Price of and accrued
interest, if any, on all the Junior Subordinated Notes which are to be redeemed
on that date.
SECTION 1106. JUNIOR SUBORDINATED NOTES PAYABLE ON REDEMPTION DATE
Notice of redemption having been given as aforesaid, the Junior
Subordinated Notes so to be redeemed shall, on the Redemption Date, become due
and payable at the Redemption Price therein specified together with any accrued
interest (including any Additional Interest) thereon, and from and after such
date (unless the Company shall default in the payment of the Redemption Price
and accrued interest) such Junior Subordinated Notes shall cease to bear
interest. Upon surrender of any such Junior Subordinated Note for redemption in
accordance with such notice, such Junior Subordinated Note shall be paid by the
Company at the Redemption Price, together with accrued interest, if any, and any
Additional Interest to the Redemption Date; provided, however, that, except as
otherwise provided in a supplemental indenture pursuant to Section 301,
installments of interest on Junior Subordinated Notes whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Junior Subordinated Notes, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 305.
If any Junior Subordinated Note called for redemption shall not be so
paid upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Junior Subordinated Note.
SECTION 1107. JUNIOR SUBORDINATED NOTES REDEEMED IN PART.
Any Junior Subordinated Note that is to be redeemed only in
part shall be surrendered at an office or agency of the Company therefor (with,
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Junior Subordinated Note without service charge, a new Junior
Subordinated Note of the same series, Stated Maturity and original issue date of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Junior Subordinated Note so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Junior Subordinated Notes of a series except as otherwise
specified as contemplated by Section 301 for Junior Subordinated Notes of such
series.
The minimum amount of any sinking fund payment provided for by the
terms of Junior Subordinated Notes of any series is herein referred to as a
"mandatory sinking fund payment", and any payment in excess of such minimum
amount provided for by the terms of Junior Subordinated Notes of any series is
herein referred to as an "optional sinking fund payment". If provided for by the
terms of Junior Subordinated Notes of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 1202. Each
sinking fund payment shall be applied to the redemption of Junior Subordinated
Notes of any series as provided for by the terms of Junior Subordinated Notes of
such series.
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH JUNIOR SUBORDINATED
NOTES.
The Company (1) may deliver Outstanding Junior Subordinated Notes of a
series (other than any previously called for redemption), and (2) may apply as a
credit Junior Subordinated Notes of a series which have been redeemed either at
the election of the Company pursuant to the terms of such Junior Subordinated
Notes or through the application of permitted optional sinking fund payments
pursuant to the terms of such Junior Subordinated Notes, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Junior Subordinated Notes of such series required to be made pursuant to the
terms of such Junior Subordinated Notes as provided for by the terms of such
series; provided that such Junior Subordinated Notes have not been previously so
credited. Such Junior Subordinated Notes shall be received and credited for such
purpose by the Trustee at the Redemption Price specified in such Junior
Subordinated Notes for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly.
SECTION 1203. REDEMPTION OF JUNIOR SUBORDINATED NOTES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date for any
series of Junior Subordinated Notes, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Junior
Subordinated Notes of that series pursuant to Section 1202 and stating the basis
for such credit and that such Junior Subordinated Notes have not previously been
so credited and will also deliver to the Trustee any Junior Subordinated Notes
to be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Junior Subordinated Notes to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Junior Subordinated Notes shall be made upon
the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 1301. JUNIOR SUBORDINATED NOTES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder of a Junior
Subordinated Note, by his acceptance thereof, likewise covenants and agrees,
that, to the extent and in the manner hereinafter set forth in this Article
(subject to Article Four), the payment of the principal of, premium, if any, and
interest (including Additional Interest) on each and all of the Junior
Subordinated Notes are hereby expressly made subordinate and subject in right of
payment to the prior payment in full in cash of all Senior Indebtedness. The
term "Senior Indebtedness" when used in this Article Thirteen shall be deemed to
mean the Senior Indebtedness of the Company.
SECTION 1302. PAYMENT OF PROCEEDS UPON DISSOLUTION, ETC.
Upon any payment or distribution of assets of the Company to creditors
upon any liquidation, dissolution, winding-up, reorganization, assignment for
the benefit of creditors, marshalling of assets or liabilities or any
bankruptcy, insolvency or similar proceedings of the Company (each such event,
if any, referred to as a "Proceeding"), the holders of Senior Indebtedness shall
be entitled to receive payment in full of all amounts due on or to become due on
or in respect of all Senior Indebtedness (including any interest accruing
thereon after the commencement of any such Proceeding, whether or not allowed as
a claim against the Company in such Proceeding), before the Holders of the
Junior Subordinated Notes are entitled to receive any payment or distribution
(excluding any payment described in Section 1309) on account of the principal
of, premium, if any, or interest (including Additional Interest, if any) on the
Junior Subordinated Notes or on account of any purchase, redemption or other
acquisition of Junior Subordinated Notes by the Company (all such payments,
distributions, purchases, redemptions and acquisitions, whether or not in
connection with a Proceeding, herein referred to, individually and collectively,
as a "Payment").
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing shall be received by the
Trustee or the Holders of the Junior Subordinated Notes before all Senior
Indebtedness is paid in full, or provision is made for such payment in money in
accordance with its terms, such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness or to the trustee or trustees under any indenture pursuant to which
any instruments evidencing any such Senior Indebtedness may have been issued, as
their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness.
For purposes of this Article, "assets of the Company" shall not be
deemed to include shares of stock of the Company as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least to
the extent provided in this Article with respect to the Junior Subordinated
Notes to the payment of all Senior Indebtedness that may at the time be
outstanding, provided, however, that (i) the Senior Indebtedness is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Eight hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 1302 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
Eight hereof. Nothing in Section 1303 or in this Section 1302 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 607.
SECTION 1303. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT
No payment of any principal, including redemption payments, if any,
premium, if any, or interest on (including Additional Interest) the Junior
Subordinated Notes shall be made if
(i) any Senior Indebtedness is not paid when due whether at
the stated maturity of any such payment or by call for redemption and
any applicable grace period with respect to such default has ended,
with such default remaining uncured and such default has not been
waived or otherwise ceased to exist;
(ii) the maturity of any Senior Indebtedness has been accelerated
because of a default; or
(iii) notice has been given of the exercise of an option to
require repayment, mandatory payment or prepayment or otherwise.
In the event that, notwithstanding the foregoing, the Company shall
make any Payment to the Trustee or any Holder prohibited by the foregoing
provisions of this Section, then in such event such Payment shall be held in
trust and paid over and delivered forthwith to the holders of the Senior
Indebtedness.
The provisions of this Section shall not apply to any Payment with
respect to which Section 1302 hereof would be applicable.
SECTION 1304. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Junior Subordinated Notes shall prevent the Company, at any time
except during the pendency of any Proceeding referred to in Section 1302 hereof
or under the conditions described in Section 1303 hereof, from making Payments.
Nothing in this Article shall have any effect on the right of the Holders or the
Trustee to accelerate the maturity of the Junior Subordinated Notes upon the
occurrence of an Event of Default, but, in that event, no payment may be made in
violation of the provisions of this Article with respect to the Junior
Subordinated Notes. If payment of the Junior Subordinated Notes is accelerated
because of an Event of Default, the Company shall promptly notify the holders of
the Senior Indebtedness (or their representatives) of such acceleration.
SECTION 1305. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
The rights of the Holders of the Junior Subordinated Notes shall be
subrogated to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of, premium, if any, and interest
(including Additional Interest) on the Junior Subordinated Notes shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Junior Subordinated Notes or the Trustee would be entitled
except for the provisions of this Article, and no payments pursuant to the
provisions of this Article to the holders of Senior Indebtedness by Holders of
the Junior Subordinated Notes or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Junior Subordinated Notes, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
SECTION 1306. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Junior Subordinated Notes is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Junior Subordinated Notes,
the obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the holders of Senior Indebtedness,
is intended to rank equally with all other general obligations of the Company),
to pay to the Holders of the Junior Subordinated Notes the principal of,
premium, if any, and interest (including Additional Interest) on the Junior
Subordinated Notes as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of the Junior Subordinated Notes and creditors of the
Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder of any Junior Subordinated Note from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness to receive cash, property and securities otherwise payable
or deliverable to the Trustee or such Holder or, under the conditions specified
in Section 1303, to prevent any payment prohibited by such Section or enforce
their rights pursuant to the penultimate paragraph in Section 1303.
SECTION 1307. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Junior Subordinated Note by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee his attorney-in-fact for any and all such
purposes, including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company, whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the indebtedness of the Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved.
SECTION 1308. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Indebtedness to
enforce the subordination provisions provided herein shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or any failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the Junior
Subordinated Notes, without incurring responsibility to the Holders of the
Junior Subordinated Notes and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of the
Junior Subordinated Notes to the holders of Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness, or
otherwise amend or supplement in any manner Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) permit the Company to borrow, repay and then reborrow any
or all of the Senior Indebtedness; (iii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iv) release any Person liable in any manner for the collection of
Senior Indebtedness; (v) exercise or refrain from exercising any rights against
the Company and any other Person; or (vi) apply any sums received by them to
Senior Indebtedness.
SECTION 1309. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments
from money held in trust by the Trustee under Article Four for the payment of
the principal of, premium, if any, and interest (including Additional Interest)
on any series of Junior Subordinated Notes shall not be subordinated to the
prior payment of any Senior Indebtedness or subject to the restrictions set
forth in this Article and no Holder of such Junior Subordinated Notes nor the
Trustee shall be obligated to pay over such amount to the Company, any holder of
Senior Indebtedness (or a designated representative of such holder) or any other
creditor of the Company.
SECTION 1310. NOTICE TO THE TRUSTEE.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Junior
Subordinated Notes pursuant to the provisions of this Article. Notwithstanding
the provisions of this Article or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Junior Subordinated Notes pursuant to the provisions of this
Article unless and until a Responsible Officer of the Trustee shall have
received written notice thereof at the Corporate Trust Office of the Trustee
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 601, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 1310 at
least two Business Days prior to the date upon which, by the terms hereof, any
money may become payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on any Junior
Subordinated Note), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 601, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 1311. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 601 hereof,
and the Holders of the Junior Subordinated Notes shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Junior Subordinated Notes, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
the Senior Indebtedness, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article, provided that the foregoing shall apply only if such court has
been apprised of the provisions of this Article.
SECTION 1312. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the provisions of Section 601, the Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Junior Subordinated Notes or to the Company or to
any other Person cash, property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 1313. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS; PRESERVATION
OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607 hereof.
SECTION 1314. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee (or the
Company or an Affiliate of the Company) shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee.
SECTION 1315. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON SUBORDINATION
PROVISIONS.
Each Holder by accepting a Junior Subordinated Note acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Junior Subordinated Notes, to acquire and continue to hold, or
to continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or to continue to hold, such
Senior Indebtedness.
ARTICLE FOURTEEN
NOTES GUARANTEE
SECTION 1401. GUARANTEE.
The Guarantor hereby irrevocably and unconditionally guarantees to each
Holder of a Junior Subordinated Note of each series the due and punctual payment
of the principal of and any premium and interest (including Additional Interest)
on such Junior Subordinated Note when and as the same shall become due and
payable, whether at the Stated Maturity, by declaration of acceleration, call
for redemption or otherwise, in accordance with the terms of such Junior
Subordinated Note and this Indenture, regardless of any defense, right of
set-off or counterclaim that the Guarantor may have or assert, except the
defense of payment. The Guarantor's obligation to make a payment under this
Article XIV may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Company to pay such amounts to the
Holders.
The Notes Guarantee set forth in this Section 1401 shall not be valid
or become obligatory for any purpose with respect to a Junior Subordinated Note
until the certificate of authentication on such Junior Subordinated Note shall
have been authenticated by or on behalf of the Trustee by manual signature.
SECTION 1402. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of the Notes Guarantee
and of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Company or any
other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 1403. GUARANTOR OBLIGATIONS NOT AFFECTED.
The obligations of the Guarantor under this Article XIV shall in no way
be affected or impaired by reason of the happening from time to time of any of
the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Company of any express or
implied agreement, covenant, term or condition relating to the Junior
Subordinated Notes to be performed or observed by the Company;
(b) the extension of time for the payment by the Company of
all or any portion of the interest on the Junior Subordinated Notes,
the Redemption Price or any other sums payable under the terms of the
Junior Subordinated Notes or the extension of time for the performance
of any other obligation under, arising out of, or in connection with,
the Junior Subordinated Notes (other than an extension of time for
payment of interest or any other sums payable that results from the
extension of any interest payment period on the Junior Subordinated
Notes of any series permitted by this Indenture).
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Junior Subordinated Notes, or any action on the part of
the Company granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Company or any of the assets of the Company;
(e) any invalidity of, or defect or deficiency in, the Junior
Subordinated Notes;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor
(other than payment of the underlying obligation), it being the intent
of this Article XIV that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 1404. FORM OF GUARANTEE.
A notation of the Notes Guarantee shall be set forth on each Junior
Subordinated Note in substantially the following form:
FOR VALUE RECEIVED, THE SOUTHERN COMPANY, a corporation duly organized
and existing under the laws of the State of Delaware (the "Guarantor", which
term includes any successor Person under the Indenture referred to herein)
hereby irrevocably and unconditionally guarantees to the Holder of this Junior
Subordinated Note issued by Southern Company Capital Funding, Inc. (the
"Company"), pursuant to the terms of the Notes Guarantee contained in Article
XIV of the Indenture, the due and punctual payment of the principal of and
premium, if any, and interest (including Additional Interest) on this Junior
Subordinated Note, when and as the same shall become due and payable, whether at
the Stated Maturity, by declaration of acceleration, call for redemption or
otherwise, in accordance with the terms of this Junior Subordinated Note and the
Indenture.
The obligations of the Guarantor to the Holders of the Junior
Subordinated Notes and to the Trustee pursuant to the Notes Guarantee and the
Indenture are expressly set forth in Article XIV of the Indenture, and reference
is hereby made to such Article and Indenture for the precise terms of the Notes
Guarantee.
Notwithstanding anything to the contrary in this Notes Guarantee, all
payments in respect of the Notes Guarantee are subordinate and subject in right
of payment to the prior payment in full of all Senior Indebtedness (as defined
in the Indenture) of the Guarantor.
THIS NOTES GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
The Notes Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Junior Subordinated Note upon
which this notation of the Notes Guarantee is endorsed shall have been executed
by the Trustee under the Indenture by the manual signature of one of its
authorized officers.
(SEAL) THE SOUTHERN COMPANY,
Attest:
By:
Name:
Title
SECTION 1405. EXECUTION OF GUARANTEE.
To evidence the Notes Guarantee to the Holders specified in Section
1401, the Guarantor hereby agrees to execute the notation of the Notes
Guarantee, in substantially the form set forth in Section 1404, to be endorsed
on each Junior Subordinated Note authenticated and delivered by the Trustee. The
Guarantor hereby agrees that the Notes Guarantee set forth in Section 1401 shall
remain in full force and effect notwithstanding any failure to endorse on each
Junior Subordinated Note a notation of the Notes Guarantee. Each such notation
of the Notes Guarantee shall be signed on behalf of the Guarantor, by a director
or officer, prior to the authentication of the Junior Subordinated Note on which
it is endorsed, and the delivery of such Junior Subordinated Note by the
Trustee, after the due authentication thereof by the Trustee hereunder, shall
constitute due delivery of the Notes Guarantee on behalf of the Guarantor. Such
signature upon the notation of the Notes Guarantee may be a manual or facsimile
signature of any such director or officer and may be imprinted or otherwise
reproduced below the notation of the Notes Guarantee, and in case any such
director or officer who shall have signed the notation of the Notes Guarantee
shall cease to be such director or officer before the Junior Subordinated Note
on which such notation is endorsed shall have been authenticated and delivered
by the Trustee or disposed of by the Company, such Junior Subordinated Note
nevertheless may be authenticated and delivered or disposed of as though the
person who signed the notation of the Notes Guarantee had not ceased to be such
director or officer of the Guarantor.
SECTION 1406. SUBROGATION.
The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Company in respect of any amounts paid to the Holders by the
Guarantor under this Article XIV with respect to any series of Junior
Subordinated Notes; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Article XIV with respect to a series of Junior Subordinated Notes if, at the
time of any such payment, any amounts are due and unpaid under such series of
Junior Subordinated Notes. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
SECTION 1407. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Company with respect to the Junior
Subordinated Notes and that the Guarantor shall be liable as principal and as
debtor hereunder to make payments pursuant to the terms of the Notes Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 1403 hereof.
SECTION 1408. SUBORDINATION.
The Guarantor covenants and agrees, and each Holder of a Junior
Subordinated Note, by his acceptance thereof, likewise covenants and agrees,
that, to the same extent and in the same manner set forth in Article XIII with
respect to subordination and relative rights of the Junior Subordinated Notes,
all payments in respect of the Notes Guarantee are hereby expressly made
subordinate and subject in right of payment to the prior payment in full in cash
of all Senior Indebtedness of the Guarantor.
ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
SECTION 1501. NO RECOURSE AGAINST OTHERS.
An incorporator or any past, present or future director, officer,
employee or stockholder, as such, of the Company or the Guarantor shall not have
any liability for any obligations of the Company or the Guarantor under the
Junior Subordinated Notes or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Junior Subordinated Note, each Holder shall waive and release all such
liability. Such waiver and release shall be part of the consideration for the
issue of the Junior Subordinated Notes.
SECTION 1502. SET-OFF.
Notwithstanding anything to the contrary in this Indenture or in any
Junior Subordinated Note of any series, prior to the dissolution of any
Securities Trust that has issued Trust Securities related to a series of Junior
Subordinated Notes, the Company shall have the right to set-off and apply
against any payment it is otherwise required to make hereunder or thereunder
with respect to the principal of or interest (including any Additional Interest)
on the Junior Subordinated Notes of such series with and to the extent the
Company has theretofore made, or is concurrently on the date of such payment
making, a payment with respect to the Trust Securities of the series related to
such series of Junior Subordinated Notes under the applicable Guarantee.
Contemporaneously with, or as promptly as practicable after, any such payment
under such Guarantee, the Company shall deliver to the Trustee an Officers'
Certificate (upon which the Trustee shall be entitled to rely conclusively
without any requirement to investigate the facts contained therein) to the
effect that such payment has been made and that, as a result of such payment,
the corresponding payment under the related series of Junior Subordinated Notes
has been set-off in accordance with this Section 1502.
SECTION 1503. ASSIGNMENT; BINDING EFFECT.
The Company shall have the right at all times to assign any of its
rights or obligations under this Indenture to a direct or indirect wholly-owned
subsidiary of the Company, provided that, in the event of any such assignment,
the Company shall remain primarily liable for the performance of all such
obligations. This Indenture may also be assigned by the Company in connection
with a transaction described in Article Eight. This Indenture shall be binding
upon and inure to the benefit of the Company, the Trustee, the Holders, any
Security Registrar, Paying Agent, and Authenticating Agent and, to the extent
specifically set forth herein, the holders of Senior Indebtedness and their
respective successors and assigns. The provisions of clause (2) of Section 508
and Section 1006 are for the benefit of the holders of the series of Trust
Securities referred to therein and, prior to the dissolution of the related
Securities Trust, may be enforced by such holders. A holder of a Trust Security
shall not have the right, as such a holder, to enforce any other provision of
this Indenture.
SECTION 1504. ADDITIONAL INTEREST.
Whenever there is mentioned in this Indenture, in any context, the
payment of the principal of, premium, if any, or interest on, or in respect of,
any Junior Subordinated Note of any series, such mention shall be deemed to
include mention of the payment of Additional Interest provided for by the terms
of such series of Junior Subordinated Notes to the extent that, in such context,
Additional Interest is, were or would be payable in respect thereof pursuant to
such terms, and express mention of the payment of Additional Interest in any
provisions hereof shall not be construed as excluding Additional Interest in
those provisions hereof where such express mention is not made.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
SOUTHERN COMPANY CAPITAL FUNDING, INC.
By
Vice President
Attest:
Assistant Secretary
THE SOUTHERN COMPANY
By
Financial Vice President
Attest:
Assistant Secretary BANKERS TRUST COMPANY
Trustee
By
Attest:
Exhibit 4.2
SOUTHERN COMPANY CAPITAL FUNDING, INC.
AND
THE SOUTHERN COMPANY
TO
BANKERS TRUST COMPANY,
TRUSTEE.
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF FEBRUARY 4, 1997
$335,052,000
SERIES A 8.19% JUNIOR SUBORDINATED NOTES
DUE FEBRUARY 1, 2037
<PAGE>
i
TABLE OF CONTENTS1
ARTICLE 1.................................................................2
SECTION 101. Establishment................................................2
SECTION 102. Definitions..................................................3
SECTION 103. Payment of Principal and Interest............................5
SECTION 104. Deferral of Interest Payments................................6
SECTION 105. Denominations................................................7
SECTION 106. Global Securities............................................7
SECTION 107. Transfer and Exchange........................................8
SECTION 108. Redemption..................................................10
SECTION 109. Right to Advance Stated Maturity..........................13
ARTICLE 2................................................................13
SECTION 201. Recitals by Company.........................................13
SECTION 202. Ratification and Incorporation of Original Indenture........13
SECTION 203. Executed in Counterparts....................................13
SECTION 204. Listing of Notes............................................14
SECTION 205. Legends.....................................................14
______________________
1 This Table of Contents does not constitute part of the Indenture or have any
bearing upon the interpretation of any of its terms and provisions.
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE is made as of the 4th day of February,
1997, by and among SOUTHERN COMPANY CAPITAL FUNDING, INC., a Delaware
corporation, 270 Peachtree Street, N.W., Atlanta, Georgia 30303 (the "Company"),
THE SOUTHERN COMPANY, a Delaware corporation, 270 Peachtree Street, N.W.,
Atlanta, Georgia 30303 (the "Guarantor"), and BANKERS TRUST COMPANY, a New York
banking corporation, Four Albany Street, New York, New York 10006 (the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Company and the Guarantor have heretofore entered into a
Subordinated Note Indenture, dated as of February 1, 1997 (the "Original
Indenture"), with Bankers Trust Company;
WHEREAS, the Original Indenture is incorporated herein by this reference
and the Original Indenture, as supplemented by this First Supplemental
Indenture, is herein called the "Indenture";
WHEREAS, under the Original Indenture, a new series of Junior Subordinated
Notes may at any time be established by the Board of Directors of the Company in
accordance with the provisions of the Original Indenture and the terms of such
series may be described by a supplemental indenture executed by the Company, the
Guarantor and the Trustee;
WHEREAS, the Company proposes to create under the Indenture a new series of
Junior Subordinated Notes which shall contain certain transfer restrictions as
described herein and a new series of Junior Subordinated Notes which shall not
contain such transfer restrictions;
WHEREAS, the Company may propose an exchange offer whereby the holders of
such restricted Junior Subordinated Notes may exchange such securities for
nonrestricted Junior Subordinated Notes in accordance with the procedures
described herein;
WHEREAS, additional Junior Subordinated Notes of other series hereafter
established, except as may be limited in the Original Indenture as at the time
supplemented and modified, may be issued from time to time pursuant to the
Indenture as at the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery
of this First Supplemental Indenture and to make it a valid and binding
obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
Series A Junior Subordinated Notes
SECTION 101. Establishment. There is hereby established a new series of
Junior Subordinated Notes to be issued under the Indenture which shall contain
the transfer restrictions contained herein, to be designated as the Company's
Series A 8.19% Junior Subordinated Notes due February 1, 2037 (the "Restricted
Series A Notes"), and a new series of Junior Subordinated Notes to be issued
under the Indenture which shall not contain such transfer restrictions, to be
designated as the Company's Series A 8.19% Exchange Junior Subordinated Notes
due February 1, 2037 (the "Nonrestricted Series A Notes", and, collectively,
with the Restricted Series A Notes, the "Series A Notes").
There are to be authenticated and delivered $335,052,000 principal
amount of Restricted Series A Notes and $335,052,000 principal amount of
Nonrestricted Series A Notes, and no further Series A Notes shall be
authenticated and delivered except as provided by Sections 203, 303, 304, 907 or
1107 of the Original Indenture.
The Series A Notes shall be issued in definitive fully registered form.
The Series A Notes shall be in substantially the form set out in
Exhibit A hereto. The entire principal amount of the Restricted Series A Notes
shall initially be evidenced by one certificate issued to the Property Trustee
of Southern Company Capital Trust I. Nonrestricted Series A Notes shall be
issued in exchange for Restricted Series A Notes as provided in Section 107(b)
hereof.
The form of the Trustee's Certificate of Authentication for the Series
A Notes shall be in substantially the form set forth in Exhibit B hereto. A
notation of the Notes Guarantee shall be set forth on each Series A Note in
substantially the form set forth in Section 1404 of the Original Indenture.
Each Series A Note shall be dated the date of authentication thereof
and shall bear interest from the date of original issuance thereof or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for.
SECTION 102. Definitions. The following defined terms used herein
shall, unless the context otherwise requires, have the meanings specified below.
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Original Indenture.
"Deferred Interest" means each installment of interest not paid during
any Extension Period, and interest thereon. Deferred installments of interest
shall bear interest at the rate of 8.19% per annum from the applicable Interest
Payment Date to the date of payment, compounded semi-annually, to the extent
permitted by applicable law.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Company to exchange the Restricted
Series A Notes for the Nonrestricted Series A Notes, (ii) by the Guarantor to
exchange the Series A Notes Guarantee for the Exchange Notes Guarantee (as
defined in the Registration Rights Agreement) and the Series A Capital
Securities Guarantee for the Exchange Capital Securities Guarantee (as defined
in the Registration Rights Agreement) and (iii) by the Securities Trust to
exchange the 8.19% Capital Securities for the Exchange Capital Securities (as
defined in the Registration Rights Agreement).
"Extension Period" means any period during which the Company has
elected to defer payments of interest, which deferral may be for a period of up
to ten (10) consecutive semi-annual periods.
"Interest Payment Dates" means February 1 and August 1 of each year.
"Investment Company Act Event" means that the Company shall have
received an Opinion of Counsel to the effect that, as a result of the occurrence
of a change in law or regulation or a written change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Securities Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act of 1940, as amended,
which change becomes effective on or after the Original Issue Date.
"Original Issue Date" means February 4, 1997.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of February 1, 1997 among the Guarantor, the Company, the Securities
Trust and the Initial Purchasers named therein.
"Regular Record Date" means, with respect to each Interest Payment
Date, the close of business on the 15th calendar day preceding such Interest
Payment Date.
"Securities Trust" means Southern Company Capital Trust I, a statutory
business trust formed by the Company under Delaware law to issue Trust
Securities, the proceeds of which will be used to purchase Series A Notes.
"Special Event" means an Investment Company Act Event or Tax Event.
"Stated Maturity" means February 1, 2037.
"Tax Event" means that the Company shall have received an Opinion of
Counsel experienced in such matters to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations, there
is more than an insubstantial risk that (i) the Securities Trust would be
subject to United States federal income tax with respect to income accrued or
received on the Series A Notes, (ii) interest payable to the Securities Trust on
the Series A Notes would not be deductible by a member of the Guarantor's
consolidated tax group for United States federal income tax purposes, or (iii)
the Securities Trust would be subject to more than a de minimis amount of other
taxes, duties or other governmental charges, which change or amendment becomes
effective on or after the Original Issue Date.
SECTION 103. Payment of Principal and Interest. The unpaid principal
amount of the Series A Notes shall bear interest at the rate of 8.19% per annum
until paid or duly provided for. Interest shall be paid semi-annually in arrears
on each Interest Payment Date to the Person in whose name the Series A Notes are
registered on the Regular Record Date for such Interest Payment Date, provided
that interest payable at the Stated Maturity of principal or on a Redemption
Date as provided herein will be paid to the Person to whom principal is payable.
So long as an Extension Period is not occurring, any such interest that is not
so punctually paid or duly provided for will forthwith cease to be payable to
the Holders on such Regular Record Date and may either be paid to the Person or
Persons in whose name the Series A Notes are registered at the close of business
on a Special Record Date for the payment of such defaulted interest to be fixed
by the Trustee ("Special Record Date"), notice whereof shall be given to Holders
of the Series A Notes not less than ten (10) days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange, if any, on which the Series A Notes
shall be listed, and upon such notice as may be required by any such exchange,
all as more fully provided in the Original Indenture.
Payments of interest on the Series A Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series A Notes shall be computed and paid on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series A Notes is not a Business Day, then a payment
of the interest payable on such date will be made on the next succeeding day
that is a Business Day, except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable.
Payment of the principal, premium, if any, and interest (including
Additional Interest, if any) due at the Stated Maturity or earlier redemption of
the Series A Notes shall be made upon surrender of the Series A Notes at the
Corporate Trust Office of the Trustee, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts. Payments of interest (including interest on any
Interest Payment Date) will be made, subject to such surrender where applicable,
at the option of the Company, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer at such place and to such account at a banking institution in
the United States as may be designated in writing to the Trustee at least
sixteen (16) days prior to the date for payment by the Person entitled thereto.
The Company shall pay, as additional interest on the Series A Notes,
when due to the United States or any other taxing authority, the amounts set
forth in clause (i) of the definition of Additional Interest.
SECTION 104. Deferral of Interest Payments. The Company has the right
at any time and from time to time to extend the interest payment period of the
Series A Notes for up to ten (10) consecutive semi-annual periods (each, an
"Extension Period"), but not beyond the Stated Maturity. Notwithstanding the
foregoing, the Company has no right to extend its obligation to pay such amounts
as are defined in clause (i) of the definition of Additional Interest. Prior to
the termination of any such Extension Period, the Company may further extend the
interest payment period, provided that such Extension Period, together with all
such previous and further extensions of that Extension Period, shall not exceed
ten (10) consecutive semi-annual periods. Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due, the Company may select a new Extension Period,
subject to the above limitations and requirements.
Upon the termination of any Extension Period, which termination shall
be on an Interest Payment Date, the Company shall pay all Deferred Interest on
the next succeeding Interest Payment Date to the Person in whose name the Series
A Notes are registered on the Regular Record Date for such Interest Payment
Date, provided that Deferred Interest payable at Stated Maturity or on any
Redemption Date will be paid to the Person to whom principal is payable.
The Company shall give the Holder or Holders of the Series A Notes and
the Trustee notice, as provided in Sections 105 and 106, respectively, of the
Original Indenture, of its selection or extension of an Extension Period at
least one Business Day prior to the earlier of (i) the Regular Record Date
relating to the Interest Payment Date on which the Extension Period is to
commence or relating to the Interest Payment Date on which an Extension Period
that is being extended would otherwise terminate, or (ii) the date the Company
or Securities Trust is required to give notice to any applicable self-regulatory
organization of the record date or the date such distributions are payable. The
Company shall cause the Securities Trust to give notice of the Company's
selection of such Extension Period to Holders of the Trust Securities.
At any time any of the foregoing notices are given to the Trustee, the
Company shall give to the Paying Agent for the Series A Notes such information
as said Paying Agent shall reasonably require in order to fulfill its tax
reporting obligations with respect to such Series A Notes.
SECTION 105. Denominations. The Series A Notes may be issued in the
denominations of $1,000, or any integral multiple thereof.
SECTION 106. Global Securities. Subject to the provisions of any
supplemental indenture entered into as contemplated by Section 107 hereof, if
the Series A Notes are distributed to Holders of the Trust Securities of the
Securities Trust in liquidation of such Holders' interests therein, the Series A
Notes will be issued in the form of one or more Global Securities registered in
the name of the Depositary (which shall be The Depository Trust Company) or its
nominee. Except under the limited circumstances described below, Series A Notes
represented by the Global Security will not be exchangeable for, and will not
otherwise be issuable as, Series A Notes in definitive form. The Global
Securities described above may not be transferred except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or to a successor Depositary or its nominee.
Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Series A Note shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee. The rights of Holders of such Global Security shall be exercised only
through the Depositary.
A Global Security shall be exchangeable for Series A Notes registered
in the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security and no successor Depositary shall have been
appointed, or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, at a time when
the Depositary is required to be so registered to act as such Depositary and no
successor Depositary shall have been appointed, (ii) the Company in its sole
discretion determines that such Global Security shall be so exchangeable, or
(iii) there shall have occurred an Event of Default with respect to the Series A
Notes. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Series A Notes registered in such names as
the Depositary shall direct.
SECTION 107. Transfer and Exchange.
(a)......Transfer Restrictions. The Restricted Series A Notes, and
those Nonrestricted Series A Notes with respect to which any Person described in
Section 205(b)(A), (B) or (C) is the beneficial owner, may not be transferred
except in compliance with the legend contained in Exhibit A unless otherwise
determined by the Company in accordance with applicable law. Upon any
distribution of the Series A Notes to Holders of the Trust Securities of the
Securities Trust in liquidation of such Holders' interests therein, the Company
and the Trustee shall enter into a supplemental indenture pursuant to Section
901 of the Original Indenture to provide for the transfer restrictions and
transfer and exchange procedures with respect to the Junior Subordinated Notes
substantially similar to those contained in the Trust Agreement to the extent
applicable in the circumstances existing at such time. No service charge will be
made for any transfer or exchange of Series A Notes, but payment will be
required of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith.
The Company shall not be required (a) to issue, transfer or exchange
any Series A Notes during a period beginning at the opening of business fifteen
(15) days before the day of the mailing of a notice identifying the serial
numbers of the Series A Notes to be called for redemption, and ending at the
close of business on the day of the mailing, or (b) to transfer or exchange any
Series A Notes theretofore selected for redemption in whole or in part, except
the unredeemed portion of any Series A Note redeemed in part.
(b)......Exchange of Restricted Series A Notes for Nonrestricted Series A
Notes. The Restricted Series A Notes may be exchanged for Nonrestricted Series A
Notes pursuant to the terms of the Exchange Offer. The Trustee shall make the
exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Nonrestricted Series A Notes,
the transactions contemplated by the Exchange Offer have
been consummated; and
(B) the principal amount of Restricted
Series A Notes properly tendered in the Exchange
Offer that are represented by a Global Security and
the principal amount of Restricted Series A Notes
properly tendered in the Exchange Offer that are
represented by individual Series A Notes, the name of
each holder of such individual Restricted Series A
Notes, the principal amount properly tendered in the
Exchange Offer by each such holder and the name and
address to which individual Nonrestricted Series A
Notes shall be registered and sent for each such
holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
opinion of counsel (x) to the effect that the Nonrestricted Series A Notes have
been registered under Section 5 of the Securities Act of 1933, as amended, and
the Indenture has been qualified under the Trust Indenture Act and (y) with
respect to the matters set forth in Section 3(p) of the Registration Rights
Agreement and (iii) a Company Order, shall authenticate (A) a Global Security
for Nonrestricted Series A Notes in aggregate principal amount equal to the
aggregate principal amount of Restricted Series A Notes represented by a Global
Security indicated in such Officers' Certificate as having been properly
tendered and (B) individual Series A Notes representing Nonrestricted Series A
Notes registered in the names of, and in the principal amounts indicated in,
such Officers' Certificate.
If the principal amount of the Global Security for the Nonrestricted
Series A Notes is less than the principal amount of the Global Security for the
Restricted Series A Notes, the Trustee shall make an endorsement on such Global
Security for Restricted Series A Notes indicating a reduction in the principal
amount represented thereby.
The Trustee shall deliver such individual Series A Notes for
Nonrestricted Series A Notes to the holders thereof as indicated in such
Officers' Certificate.
SECTION 108. Redemption. The Series A Notes shall be subject to
redemption at the option of the Company (i)in whole or in part, at any time or
from time to time on or after February 1, 2007, and (ii) in whole at any time
within ninety (90) days following the occurrence of a Special Event, in each
case at the applicable Redemption Price provided below.
The Redemption Price, in the case of a redemption under (i) above,
shall equal the following prices, expressed in percentages of the principal
amount of the Series A Notes being redeemed, plus accrued and unpaid interest
thereon to the date of redemption, if redeemed during the 12-month period
beginning February 1 of the years indicated:
Redemption
Year Price
- ---- -----
2007......................................... 104.0950%
2008......................................... 103.6855%
2009......................................... 103.2760%
2010......................................... 102.8665%
2011......................................... 102.4570%
2012......................................... 102.0475%
2013......................................... 101.6380%
2014......................................... 101.2285%
2015......................................... 100.8190%
2016......................................... 100.4095%
and at 100% on or after February 1, 2017.
The Redemption Price, in the case of a redemption prior to February 1,
2007 upon the occurrence of a Special Event as described under (ii) above, shall
equal the Make--Whole Amount plus accrued and unpaid interest on the Series A
Notes being redeemed to the date of redemption. The "Make-Whole Amount" shall be
equal to the greater of (i) the amount equal to 100% of the principal amount of
the Series A Notes being redeemed or (ii) the amount equal to the sum of the
present values of the remaining scheduled payments of principal of and interest
on the Series A Notes being redeemed through February 1, 2007 discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at a discount rate equal to the Treasury Yield plus 100
basis points, in the case of such a redemption before February 1, 1998, and the
Treasury Yield plus 50 basis points, in the case of such a redemption on or
after February 1, 1998 but prior to February 1, 2007.
"Treasury Yield" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term through February 1, 2007 of the Series A Notes to be redeemed
that would be utilized, at the time of selection and in accordance with the
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term through February 1, 2007 of the
Series A Notes.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the most recent
weekly statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "H.15 (519)" or (ii) if such release (or
any successor release) is not published or does not contain such prices on such
business day, the Reference Treasury Dealer Quotation for such redemption date.
"Independent Investment Banker" means an independent investment banking
institution of national standing appointed by the Company and reasonably
acceptable to the Trustee.
"Reference Treasury Dealer Quotation" means, with respect to the
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount and quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date).
"Reference Treasury Dealer" mans a primary U.S. Government securities
dealer in New York City appointed by the Company and reasonably acceptable to
the Trustee.
In the event of redemption of the Series A Notes in part only, a new
Series A Note or Notes for the unredeemed portion will be issued in the name or
names of the Holders thereof upon the surrender thereof.
The Series A Notes will not have a sinking fund.
Notice of redemption shall be given as provided in Section 1104 of the
Original Indenture.
Any redemption of less than all of the Series A Notes shall, with
respect to the principal thereof, be divisible by $1,000.
SECTION 109. Right to Advance Stated Maturity.
If a Tax Event occurs, the Company will have the right (a) prior to the
dissolution of the Securities Trust, to advance the Stated Maturity of the
Series A Notes to the minimum extent required, but not less than 19 and one-half
years from the Original Issue Date, or (b) to direct the Property Trustee to
dissolve the Securities Trust (if not previously dissolved) and advance the
Stated Maturity of the Series A Notes to the minimum extent required, but not
less than 19 and one-half years from the Original Issue Date, in each case such
that in the Opinion of Counsel to the Company experienced in such matters, after
advancing the Stated Maturity, interest paid on the Series A Notes will be
deductible for federal income tax purposes.
ARTICLE 2
Miscellaneous Provisions
SECTION 201. Recitals by Company. The recitals in this First
Supplemental Indenture are made by the Company only and not by the Trustee, and
all of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be
applicable in respect of Series A Notes and of this First Supplemental Indenture
as fully and with like effect as if set forth herein in full.
SECTION 202. Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this First Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
SECTION 203. Executed in Counterparts. This First Supplemental
Indenture may be simultaneously executed in several counterparts, each of which
shall be deemed to be an original, and such counterparts shall together
constitute but one and the same instrument.
SECTION 204. Listing of Notes. If the Series A Notes are to be issued
as a Global Security in connection with the distribution of the Series A Notes
to the Holders of the Capital Securities issued by the Securities Trust, the
Company will use its best efforts to list such Series A Notes on such securities
exchange, if any, on which such Capital Securities are then listed and traded.
SECTION 205. Legends.
(a)......Except as permitted by subsection (b) of this Section 205 or
as otherwise determined by the Company in accordance with applicable law, each
Series A Note shall bear the applicable legends relating to restrictions on
transfer pursuant to the securities laws in substantially the form set forth on
Exhibit A hereto.
(b)......The Company shall issue and the Trustee shall authenticate
Nonrestricted Series A Notes in exchange for Restricted Series A Notes accepted
for exchange in the Exchange Offer, which Nonrestricted Series A Notes shall not
bear the legends required by subsection (a) above, in each case unless the
holder of such Restricted Series A Notes is either (A) a broker-dealer who
purchased such Restricted Series A Notes directly from the Company for resale
pursuant to Rule 144A or any other available exemption under the Securities Act
of 1933, as amended, (B) a Person participating in the distribution of the
Restricted Series A Notes or (C) a Person who is an affiliate (as defined in
Rule 144 under the Securities Act of 1933, as amended) of the Company or the
Guarantor.
<PAGE>
14
IN WITNESS WHEREOF, each party hereto has caused this
instrument to be signed in its name and behalf by its duly authorized officers,
all as of the day and year first above written.
SOUTHERN COMPANY
CAPITAL FUNDING, INC.
ATTEST:
By:____________________________ By:__________________
ATTEST: THE SOUTHERN COMPANY
By:____________________________ By:__________________
ATTEST: BANKERS TRUST COMPANY
By:____________________________ By:__________________
<PAGE>
EXHIBIT A
FORM OF SERIES A NOTE
<PAGE>
[IF THIS SECURITY IS A RESTRICTED SECURITY, INSERT: THIS SECURITY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
SOUTHERN COMPANY ("SOUTHERN"), SOUTHERN COMPANY CAPITAL FUNDING, INC.
("CAPITAL") OR ANY AFFILIATE OF SOUTHERN OR CAPITAL WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO SOUTHERN OR CAPITAL, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO SOUTHERN'S, CAPITAL'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSES (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, (ii) PURSUANT TO CLAUSE (E) TO REQUIRE
THAT THE TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE
SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM DATED JANUARY
29, 1997, AND (iii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]
<PAGE>
NO. 1 CUSIP NO.
THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE
INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN
FULL OF ALL SENIOR INDEBTEDNESS OF THE COMPANY AND THIS SECURITY IS ISSUED
SUBJECT TO THE PROVISIONS OF THE INDENTURE WITH RESPECT THERETO.
SOUTHERN COMPANY CAPITAL FUNDING, INC.
SERIES A 8.19% JUNIOR SUBORDINATED NOTE
DUE FEBRUARY 1, 2037
Principal Amount: $_________
Regular Record Date: 15th calendar day prior to Interest Payment Date
Original Issue Date: February 4, 1997
Stated Maturity: February 1, 2037
Interest Payment Dates: February 1 and August 1
Interest Rate: 8.19% per annum
Authorized Denomination: $1,000
Initial Redemption Date: February 1, 2007
Southern Company Capital Funding, Inc., a Delaware corporation (the
"Company", which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to _____________________________________, or registered assigns, the principal
sum of _________ DOLLARS ($__________) on the Stated Maturity shown above (or
upon earlier redemption and subject to the right of the Company, under certain
conditions, to advance the Stated Maturity pursuant to the Indenture), and to
pay interest thereon from the Original Issue Date shown above, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on each Interest Payment Date as specified above,
commencing on the Interest Payment Date next succeeding the Original Issue Date
shown above and on the Stated Maturity (or upon earlier redemption and subject
to the aforementioned right of the Company to advance the Stated Maturity) at
the rate per annum shown above until the principal hereof is paid or made
available for payment and on any overdue principal and on any overdue
installment of interest. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date (other than an Interest Payment Date
that is the Stated Maturity or on a Redemption Date) will, as provided in such
Indenture, be paid to the Person in whose name this Note (the "Note") is
registered at the close of business on the Regular Record Date as specified
above next preceding such Interest Payment Date, provided that any interest
payable at Stated Maturity or on any Redemption Date will be paid to the Person
to whom principal is payable. Except as otherwise provided in the Indenture, any
such interest not so punctually paid or duly provided for will forthwith cease
to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Note is registered at the close of business on
a Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Notes of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Notes of this series shall be listed,
and upon such notice as may be required by any such exchange, all as more fully
provided in the Indenture.
Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this Note is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day, except that, if such
Business Day is in the next succeeding calendar year, payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than a Saturday or a Sunday or a day on which
banking institutions in New York City are authorized or required by law or
executive order to remain closed or a day on which the Corporate Trust Office of
the Trustee or the principal corporate trust office of the Property Trustee of
the Securities Trust are closed for business.
The Company shall have the right at any time and from time to time
during the term of this Note to extend the interest payment period of such Note
for up to 10 consecutive semi-annual periods but not beyond the Stated Maturity
of this Note (each, an "Extension Period"), during which periods unpaid interest
(together with interest thereon) will compound semi-annually at the Interest
Rate ("Deferred Interest"). Upon the termination of each Extension Period, which
shall be an Interest Payment Date, the Company shall pay all Deferred Interest
on the next succeeding Interest Payment Date to the Person in whose name this
Note is registered at the close of business on the Regular Record Date for such
Interest Payment Date, provided that any Deferred Interest payable at Stated
Maturity or on any Redemption Date will be paid to the Person to whom principal
is payable. Prior to the termination of any such Extension Period, the Company
may extend the interest payment period, provided that such Extension Period
together with all such previous and further extensions thereof shall not exceed
10 consecutive semi-annual periods. Upon the termination of any such Extension
Period, and the payment of all accrued and unpaid interest and any Additional
Interest then due, the Company may select a new Extension Period, subject to the
above requirements. If the Company shall have given notice of its election to
select any Extension Period, subject to certain exceptions provided in the
Indenture, neither the Company nor the Guarantor referred to herein shall (i)
declare or pay any dividend or distribution on, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock, or make
any guarantee payments with respect to the foregoing or (ii) make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by it that rank pari passu with or junior to this Note or
the Notes Guarantee referred to herein. The Company shall give the Holder of
this Note and the Trustee notice of its selection or extension of an Extension
Period at least one Business Day prior to the earlier of (i) the Regular Record
Date relating to the Interest Payment Date on which the Extension Period is to
commence or relating to the Interest Payment Date on which an Extension Period
that is being extended would otherwise terminate or (ii) the date the Company or
Securities Trust is required to give notice to any applicable self-regulatory
organization of the record date or the date distributions are payable.
The Company also shall be obligated to pay when due and without
extension all additional amounts as may be required so that the net amount
received and retained by the Holder of this Note (if the Holder is a Securities
Trust) after paying taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States or
any other taxing authority will not be less than the amounts such Holder would
have received had no such taxes, duties, assessments, or other governmental
charges been imposed.
Payment of the principal of and interest (including Additional
Interest, if any) due at the Stated Maturity or earlier redemption of the Series
A Notes shall be made upon surrender of the Series A Notes at the Corporate
Trust Office of the Trustee, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payment of interest (including interest on an Interest Payment
Date) will be made, subject to such surrender where applicable, at the option of
the Company, (i) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (ii) by wire transfer
at such place and to such account at a banking institution in the United States
as may be designated in writing to the Trustee at least 16 days prior to the
date for payment by the Person entitled thereto.
The indebtedness evidenced by this Note is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness (as defined in the Indenture) of the Company,
and this Note is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided, and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance hereof, waives
all notice of the acceptance of the subordination provisions contained herein
and in the Indenture by each holder of Senior Indebtedness of the Company,
whether now outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: ________ __, 19__.
SOUTHERN COMPANY CAPITAL
FUNDING, INC.
By:
Vice President
Attest:
Assistant Secretary
{Seal of SOUTHERN COMPANY CAPITAL FUNDING, INC. appears here}
NOTES GUARANTEE
FOR VALUE RECEIVED, THE SOUTHERN COMPANY, a corporation duly organized
and existing under the laws of the State of Delaware (the "Guarantor", which
term includes any successor Person under the Indenture referred to herein)
hereby irrevocably and unconditionally guarantees to the Holder of this Junior
Subordinated Note issued by Southern Company Capital Funding, Inc. (the
"Company"), pursuant to the terms of the Notes Guarantee contained in Article
XIV of the Indenture, the due and punctual payment of the principal of and
premium, if any, and interest (including Additional Interest) on this Junior
Subordinated Note, when and as the same shall become due and payable, whether at
the Stated Maturity, by declaration of acceleration, call for redemption or
otherwise, in accordance with the terms of this Junior Subordinated Note and the
Indenture.
The obligations of the Guarantor to the Holders of the Junior
Subordinated Notes and to the Trustee pursuant to the Notes Guarantee and the
Indenture are expressly set forth in Article XIV of the Indenture, and reference
is hereby made to such Article and Indenture for the precise terms of the Notes
Guarantee.
Notwithstanding anything to the contrary in this Notes Guarantee, all
payments in respect of the Notes Guarantee are subordinate and subject in right
of payment to the prior payment in full of all Senior Indebtedness (as defined
in the Indenture) of the Guarantor.
This Notes Guarantee shall be governed by and construed in accordance
with the laws of the State of New York.
The Notes Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Junior Subordinated Note upon
which this notation of the Notes Guarantee is endorsed shall have been executed
by the Trustee under the Indenture by the manual signature of one of its
authorized officers.
(SEAL) THE SOUTHERN COMPANY,
Attest:
By:
Name:
Title
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Officer
<PAGE>
(Reverse Side of Note)
This Note is one of a duly authorized issue of Junior Subordinated
Notes of the Company (the "Notes"), issued and issuable in one or more series
under a Subordinated Note Indenture, dated as of February 1, 1997, as
supplemented (the "Indenture"), among the Company, the Guarantor and Bankers
Trust Company, Trustee (the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures incidental thereto
reference is hereby made for a statement of the respective rights, limitation of
rights, duties and immunities thereunder of the Company, the Guarantor, the
Trustee and the Holders of the Notes issued thereunder and of the terms upon
which said Notes are, and are to be, authenticated and delivered. This Note is
one of the series designated on the face hereof as Series A 8.19% Junior
Subordinated Notes due February 1, 2037 (the "Series A Notes") in the aggregate
principal amount of up to $335,052,000. Capitalized terms used herein for which
no definition is provided herein shall have the meanings set forth in the
Indenture.
The Company shall have the right, subject to the terms and conditions
of the Indenture, to redeem this Note at any time on or after February 1, 2007,
at the option of the Company, in whole or in part, at the applicable Redemption
Price provided below. In addition, upon the occurrence of a Special Event (as
defined below) at any time, the Company may, within 90 days following the
occurrence thereof and subject to the terms and conditions of the Indenture,
redeem this Note in whole at the applicable Redemption Price. A Special Event
may be a Tax Event or an Investment Company Act Event. "Tax Event" means that
the Company shall have received an Opinion of Counsel experienced in such
matters to the effect that, as a result of (a) any amendment to, or change
(including any announced prospective change) in, laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of such laws or regulations, there is more than an
insubstantial risk that (i) the related Securities Trust would be subject to
United States federal income tax with respect to income accrued or received on
the Series A Notes, (ii) interest payable to the related Securities Trust would
not be deductible by the Company for United States federal income tax purposes,
or (iii) the related Securities Trust would be subject to more than a de minimis
amount of other taxes, duties or other governmental charges, which change or
amendment becomes effective on or after the Original Issue Date. "Investment
Company Act Event" means that the Company shall have received an Opinion of
Counsel to the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the related Securities
Trust is or will be considered an "investment company" which is required to be
registered under the Investment Company Act of 1940, as amended, which change
becomes effective on or after the Original Issue Date.
The Redemption Price, in the case of a redemption under the first
sentence of the preceding paragraph, shall equal the following prices, expressed
in percentages of the principal amount of the Notes of this series being
redeemed, plus accrued and unpaid interest thereon to the date of redemption, if
redeemed during the 12-month period beginning February 1 of the years indicated:
Redemption
Year Price
- ---- -----
2007......................................... 104.0950%
2008......................................... 103.6855%
2009......................................... 103.2760%
2010......................................... 102.8665%
2011......................................... 102.4570%
2012......................................... 102.0475%
2013......................................... 101.6380%
2014......................................... 101.2285%
2015......................................... 100.8190%
2016......................................... 100.4095%
and at 100% on or after February 1, 2017.
The Redemption Price, in the case of a redemption prior to February 1,
2007 upon the occurrence of a Special Event as described above, shall equal the
Make--Whole Amount plus accrued and unpaid interest on the Notes of this series
being redeemed to the date of redemption. The "Make-Whole Amount" shall be equal
to the greater of (i) the amount equal to 100% of the principal amount of the
Notes of this series being redeemed or (ii) the amount equal to the sum of the
present values of the remaining scheduled payments of principal of and interest
on such Notes being redeemed through February 1, 2007 discounted to the date of
redemption on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at a discount rate equal to the Treasury Yield plus 100 basis
points, in the case of such a redemption before February 1, 1998, and the
Treasury Yield plus 50 basis points, in the case of such a redemption on or
after February 1, 1998 but prior to February 1, 2007.
"Treasury Yield" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term through February 1, 2007 of the Notes of this series to be
redeemed that would be utilized, at the time of selection and in accordance with
the customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term through February 1, 2007
of the Series A Notes.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the most recent
weekly statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "H.15 (519)" or (ii) if such release (or
any successor release) is not published or does not contain such prices on such
business day, the Reference Treasury Dealer Quotation for such redemption date.
"Independent Investment Banker" means an independent investment banking
institution of national standing appointed by the Company and reasonably
acceptable to the Trustee.
"Reference Treasury Dealer Quotation" means, with respect to the
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount and quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date).
"Reference Treasury Dealer" mans a primary U.S. Government securities
dealer in New York City appointed by the Company and reasonably acceptable to
the Trustee.
In the event of redemption of this Note in part only, a new Note or Notes
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the surrender hereof. The Notes will not have a sinking
fund.
If an Event of Default with respect to the Notes of this series shall
occur and be continuing, the principal of the Notes of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Notes of each
series to be affected under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the Notes at the time Outstanding of each series
to be affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Notes of each series at the
time Outstanding, on behalf of the Holders of all Notes of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar and duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series, of
authorized denominations and of like tenor and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor
or the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Company, the Guarantor, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Notes of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series are exchangeable for a like aggregate principal amount of
Notes of this series of a different authorized denomination, as requested by the
Holder surrendering the same upon surrender of the Note or Notes to be exchanged
at the office or agency of the Company.
This Note shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
<PAGE>
TEN COM- as tenants in UNIF GIFT MIN ACT- _______ Custodian ________
common (Cust) (Minor)
TEN ENT- as tenants by the
entireties under Uniform Gifts to
JT TEN- as joint tenants Minors Act
with right of
survivorship and ________________________
not as tenants (State)
in common
Additional abbreviations may also be used
though not on the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
(please insert Social Security or other identifying number of assignee)
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
agent to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated:
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within instrument in every
particular without alteration or
enlargement, or any change whatever.
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:
Authorized Officer
Exhibit 4.6
SOUTHERN COMPANY CAPITAL TRUST I
AMENDED AND RESTATED
TRUST AGREEMENT
among
SOUTHERN COMPANY CAPITAL FUNDING, INC., as Depositor,
BANKERS TRUST COMPANY, as Property Trustee,
BANKERS TRUST (DELAWARE), as Delaware Trustee,
and
WAYNE BOSTON AND RICHARD A. CHILDS,
as Administrative Trustees
Dated as of February 1, 1997
<PAGE>
SOUTHERN COMPANY CAPITAL TRUST I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
Section 310(a)(1)........................................8.07
(a)(2)..........................................8.07
(a)(3)..........................................8.09
(a)(4)................................Not Applicable
(b).............................................8.08
Section 311(a)...........................................8.13
(b).............................................8.13
Section 312(a)...........................................5.07
(b).............................................5.07
(c).............................................5.07
Section 313(a)........................................8.14(a)
(a)(4).......................................8.14(b)
(b)..........................................8.14(b)
(c)..........................................8.14(a)
(d).................................8.14(a), 8.14(b)
Section 314(a)...........................................8.15
(b)...................................Not Applicable
(c)(1)....................................8.15, 8.16
(c)(2)..........................................8.16
(c)(3)..........................................8.16
(d)...................................Not Applicable
(e).............................................8.16
Section 315(a)...........................................8.01
(b)....................................8.02, 8.14(b)
(c)..........................................8.01(a)
(d).......................................8.01, 8.03
(e)...................................Not Applicable
Section 316(a).................................Not Applicable
(a)(1)(A).......................................8.19
(a)(1)(B).......................................8.19
(a)(2)................................Not Applicable
(b)...................................Not Applicable
(c)...................................Not Applicable
Section 317(a)(1)..............................Not Applicable
(a)(2)................................Not Applicable
(b).............................................5.09
Section 318(a)..........................................10.10
Note: This Cross-Reference Table does not constitute part of the Trust Agreement
and shall not affect the interpretation of any of its terms and provisions.
<PAGE>
TABLE OF CONTENTS
ARTICLE I.................................................................2
Section 1.01 Definitions..................................................2
ARTICLE II...............................................................14
Section 2.01 Name........................................................15
Section 2.02 Offices of the Trustees; Principal Place of Business........15
Section 2.03 Initial Contribution of Trust Property; Organizational
Expenses........................................................15
Section 2.04 Issuance of the Capital Securities..........................15
Section 2.05 Subscription and Purchase of Junior Subordinated Notes;
Issuance of the Common Securities...............................16
Section 2.06 Declaration of Trust........................................16
Section 2.07 Authorization to Enter into Certain Transactions............17
Section 2.08 Assets of Trust.............................................22
Section 2.09 Title to Trust Property.....................................22
Section 2.10 Mergers and Consolidations of the Trust.....................23
ARTICLE III..............................................................24
Section 3.01 Payment Account.............................................24
ARTICLE IV...............................................................25
Section 4.01 Distributions...............................................25
Section 4.02 Redemption..................................................26
Section 4.03 Subordination of Common Securities..........................29
Section 4.04 Payment Procedures..........................................30
Section 4.05 Tax Returns and Reports.....................................30
ARTICLE V................................................................31
Section 5.01 Initial Ownership...........................................31
Section 5.02 The Trust Securities Certificates...........................31
Section 5.03 Authentication of Trust Securities Certificates.............31
Section 5.04 Registration of Transfer and Exchange of Capital
Securities Certificates.........................................32
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates....................................................38
Section 5.06 Persons Deemed Securityholders..............................38
Section 5.07 Access to List of Securityholders' Names and Addresses......39
Section 5.08 Maintenance of Office or Agency.............................39
Section 5.09 Appointment of Paying Agent.................................40
Section 5.10 Ownership of Common Securities by Depositor.................41
Section 5.11 Book-Entry Capital Securities Certificates; Common
Securities Certificate..........................................41
Section 5.12 Notices to Clearing Agency..................................42
Section 5.13 Definitive Capital Securities Certificates..................43
Section 5.14 Rights of Securityholders...................................43
ARTICLE VI...............................................................44
Section 6.01 Limitations on Voting Rights................................44
Section 6.02 Notice of Meetings..........................................46
Section 6.03 Meetings of Capital Securityholders.........................46
Section 6.04 Voting Rights...............................................46
Section 6.05 Proxies, etc................................................47
Section 6.06 Securityholder Action by Written Consent....................47
Section 6.07 Record Date for Voting and Other Purposes...................47
Section 6.08 Acts of Securityholders.....................................48
Section 6.09 Inspection of Records.......................................49
ARTICLE VII..............................................................49
Section 7.01 Representations and Warranties of the Trustees..............49
ARTICLE VIII.............................................................51
Section 8.01 Certain Duties and Responsibilities.........................51
Section 8.02 Notice of Defaults..........................................52
Section 8.03 Certain Rights of Property Trustee..........................52
Section 8.04 Not Responsible for Recitals or Issuance of Securities......54
Section 8.05 May Hold Securities.........................................55
Section 8.06 Compensation; Fees; Indemnity...............................55
Section 8.07 Trustees Required; Eligibility..............................56
Section 8.08 Conflicting Interests.......................................56
Section 8.09 Co-Trustees and Separate Trustee............................57
Section 8.10 Resignation and Removal; Appointment of Successor...........59
Section 8.11 Acceptance of Appointment by Successor......................61
Section 8.12 Merger, Conversion, Consolidation or Succession to
Business........................................................61
Section 8.13 Preferential Collection of Claims Against Depositor or
Trust...........................................................62
Section 8.14 Reports by Property Trustee.................................62
Section 8.15 Reports to the Property Trustee.............................63
Section 8.16 Evidence of Compliance with Conditions Precedent............63
Section 8.17 Number of Trustees..........................................63
Section 8.18 Delegation of Power.........................................64
Section 8.19 Enforcement of Rights of Property Trustee by
Securityholders.................................................64
ARTICLE IX...............................................................66
Section 9.01 Termination Upon Expiration Date............................66
Section 9.02 Early Termination...........................................66
Section 9.03 Termination.................................................66
Section 9.04 Liquidation.................................................68
Section 9.05 Bankruptcy..................................................69
ARTICLE X................................................................70
Section 10.01 Expense Agreement..........................................70
Section 10.02 Limitation of Rights of Securityholders....................70
Section 10.03 Amendment..................................................70
Section 10.04 Separability...............................................72
Section 10.05 Governing Law..............................................72
Section 10.06 Successors.................................................72
Section 10.07 Headings...................................................73
Section 10.08 Notice and Demand..........................................73
Section 10.09 Agreement Not to Petition..................................74
Section 10.10 Conflict with Trust Indenture Act..........................74
EXHIBIT A [INTENTIONALLY RESERVED]
EXHIBIT B [INTENTIONALLY RESERVED]
EXHIBIT C Form of Common Securities Certificate
EXHIBIT D Form of Expense Agreement
EXHIBIT E Form of Capital Securities Certificate
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT is made as of February 1,
1997, by and among (i) Southern Company Capital Funding, Inc., a Delaware
corporation (the "Depositor" or the "Company"), (ii) Bankers Trust Company, a
banking corporation duly organized and existing under the laws of New York, as
trustee (the "Property Trustee" and, in its separate corporate capacity and not
in its capacity as Property Trustee, the "Bank"), (iii) Bankers Trust
(Delaware), a banking corporation duly organized under the laws of Delaware, as
Delaware trustee (the "Delaware Trustee" and, in its separate corporate capacity
and not in its capacity as Delaware Trustee, the "Delaware Bank"), (iv) Wayne
Boston, an individual, and Richard A. Childs, an individual, as administrative
trustees (each an "Administrative Trustee" and together the "Administrative
Trustees") (the Property Trustee, the Delaware Trustee and the Administrative
Trustees referred to collectively as the "Trustees") and (v) the several
Holders, as hereinafter defined.
WITNESSETH:
WHEREAS, the Depositor and the Delaware Trustee have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into that certain Trust Agreement, dated as of January
24, 1997 (the "Original Trust Agreement"), and by the execution and filing by
the Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, dated January 24, 1997; and
WHEREAS, the parties hereto desire to amend and restate the Original
Trust Agreement in its entirety as set forth herein to provide for, among other
things, (i) the addition of the Bank, Wayne Boston and Richard A. Childs as
trustees of the Trust, (ii) the acquisition by the Trust from the Depositor of
all of the right, title and interest in the Junior Subordinated Notes, (iii) the
issuance of the Common Securities by the Trust to the Depositor, and (iv) the
issuance and sale of the Capital Securities by the Trust pursuant to the
Purchase Agreement.
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
Defined Terms
Section 1.01 Definitions. For all purposes of this Trust Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this Trust
Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Trust Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, an amount equal to the Additional
Interest (as defined in clause (ii) of the definition of "Additional Interest"
in the Subordinated Indenture) paid by the Depositor on a Like Amount of Junior
Subordinated Notes for such period.
"Administrative Trustee" means each of the individuals identified as an
"Administrative Trustee" in the preamble to this Trust Agreement solely in their
capacities as Administrative Trustees of the Trust formed and continued
hereunder and not in their individual capacities, or such trustee's successor(s)
in interest in such capacity, or any successor "Administrative Trustee"
appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of such Person under federal bankruptcy law or any other
applicable federal or state law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of such
Person or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of such
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(ii) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under federal bankruptcy law or any other applicable federal
or state law, or the consent by it to the filing of such petition or to
the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Person or of any substantial
part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of action by such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.09.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors or a duly authorized committee thereof and
to be in full force and effect on the date of such certification, and delivered
to the Trustees.
"Book-Entry Capital Securities Certificates" means certificates
representing Capital Securities issued in global, fully registered form to the
Clearing Agency as described in Section 5.11.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii)
a day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office or the Indenture Trustee's principal corporate trust office is closed for
business.
"Capital Security" means an undivided beneficial ownership interest in
the assets of the Trust having a Liquidation Amount of $1,000 and having rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein. The Capital
Securities shall consist of the Transfer Restricted Capital Securities and, if
issued, the New Capital Securities.
"Capital Securities Certificate" means a certificate evidencing
ownership of a Capital Security or Securities, substantially in the form
attached as Exhibit E.
"Cedel Bank" means Cedel Bank, societe anonyme.
"Certificate Depository Agreement" means the agreement among the Trust,
the Property Trustee and The Depository Trust Company, as the initial Clearing
Agency, dated February 3, 1997, relating to the Capital Securities Certificates,
as the same may be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial ownership interest in
the assets of the Trust having a Liquidation Amount of $1,000 and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of a Common Security or Securities, substantially in the form attached
as Exhibit C.
"Company" means Southern Company Capital Funding, Inc., a Delaware
corporation, its successors and assigns.
"Corporate Trust Office" means the office of the Property Trustee at
which its corporate trust business shall be principally administered.
"Definitive Capital Securities Certificates" means either or both (as
the context requires) of (i) Capital Securities Certificates issued in
certificated, fully registered form as provided in Section 5.11(a) and (ii)
Capital Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.
"Delaware Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time.
"Delaware Trustee" means the commercial bank or trust company or any
other Person identified as the "Delaware Trustee" and has the meaning specified
in the preamble to this Trust Agreement solely in its capacity as Delaware
Trustee of the Trust formed and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
Delaware Trustee appointed as herein provided.
"Depositor" means Southern Company Capital Funding, Inc., a Delaware
corporation, in its capacity as "Depositor" under this Trust Agreement, its
successors and assigns.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"DWAC" means Deposit and Withdrawal at Custodian Service.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the occurrence of an Indenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, of any covenant or
warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in whose performance or breach is dealt
with in clause (ii) or (iii) above) and continuation of such default
or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Trustees by the Holders of at
least 10% in Liquidation Amount of the Outstanding Capital Securities
a written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(v) the occurrence of a Bankruptcy Event with respect to the
Trust.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Guarantor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Guarantee" means the Capital Securities Guarantee Agreement executed
and delivered by the Guarantor and Bankers Trust Company, as Guarantee Trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Capital Securities, as amended from time to
time.
"Guarantor" means The Southern Company, a Delaware corporation, its
successors and assigns.
"Indenture Event of Default" means an "Event of Default" as defined in the
Subordinated Indenture.
"Indenture Redemption Date" means "Redemption Date," as defined in the
Subordinated Indenture.
"Indenture Trustee" means the trustee under the Subordinated Indenture.
"Issue Date" means the date of the delivery of the Trust Securities.
"Junior Subordinated Notes" means the $335,052,000 aggregate principal
amount of the Depositor's Series A 8.19% Junior Subordinated Notes due February
1, 2037, issued pursuant to the Subordinated Indenture.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (i) Trust Securities having a Liquidation Amount
equal to the principal amount of Junior Subordinated Notes to be
contemporaneously redeemed in accordance with the Subordinated Indenture and the
proceeds of which will be used to pay the Redemption Price of such Trust
Securities and (ii) Junior Subordinated Notes having a principal amount equal to
the Liquidation Amount of the Trust Securities of the Holder to whom such Junior
Subordinated Notes are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Liquidation Date" means the date on which Junior Subordinated Notes
are to be distributed to Holders of Trust Securities in connection with a
dissolution and liquidation of the Trust pursuant to Section 9.04.
"Liquidation Distribution" has the meaning specified in Section 9.05.
"New Capital Securities" has the meaning specified in Section 2.04.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Depositor, and delivered to the appropriate Trustee. One of
the officers signing an Officers' Certificate given pursuant to Section 8.16
shall be the principal executive, financial or accounting officer of the
Depositor. An Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as is necessary, in such officer's opinion, to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Trustees, the Guarantor or the Depositor, but not an
employee of the Trust or the Trustees, and who shall be reasonably acceptable to
the Property Trustee. Any Opinion of Counsel pertaining to federal income tax
matters may rely on published rulings of the Internal Revenue Service.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Other Capital Securities" means Capital Securities that are offered
and sold to institutional accredited investors in transactions exempt from
registration under the Securities Act and not made in reliance on Rule 144A or
Regulation S.
"Outstanding", when used with respect to Capital Securities, means, as
of the date of determination, all Capital Securities theretofore authenticated
and delivered under this Trust Agreement, except:
(i) Capital Securities theretofore canceled by the Administrative
Trustees or delivered to the Administrative Trustees for cancellation;
(ii) Capital Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the
Property Trustee or any Paying Agent for the Holders of such Capital
Securities; provided that if such Capital Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Trust Agreement; and
(iii) Capital Securities in exchange for or in lieu of which
other Capital Securities have been authenticated and delivered pursuant
to this Trust Agreement;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, the Holder of the Common Securities, the
Guarantor, any Administrative Trustee or any Affiliate of the Depositor, the
Guarantor or any Administrative Trustee shall be disregarded and deemed not to
be Outstanding, except that (a) in determining whether any Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Capital Securities which such Trustee knows to
be so owned shall be so disregarded and (b) the foregoing shall not apply at any
time when all of the outstanding Capital Securities are owned by the Depositor,
the Holder of the Common Securities, the Guarantor, one or more Administrative
Trustees and/or any such Affiliate. Capital Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Administrative Trustees the pledgee's right so to act
with respect to such Capital Securities and that the pledgee is not the
Depositor, the Guarantor or any Affiliate of the Depositor or the Guarantor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Capital Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.09 and shall initially be the Property Trustee.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee for the benefit of the
Securityholders in which all amounts paid in respect of the Junior Subordinated
Notes will be held and from which the Property Trustee shall make payments to
the Securityholders in accordance with Section 4.01.
"Person" means an individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor "Property Trustee" as herein provided.
"Purchase Agreement" means the Purchase Agreement, dated January 29,
1997, among the Depositor, the Guarantor, the Trust and the Initial Purchasers
named therein.
"QIBs" means qualified institutional buyers as defined in Rule 144A.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Indenture Redemption Date shall be a Redemption
Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any date fixed for redemption
of any Trust Security, the Liquidation Amount of such Trust Security, plus
accrued and unpaid Distributions to such date, plus the related amount of the
premium, if any, paid by the Depositor upon the concurrent redemption or
repayment of a Like Amount of Junior Subordinated Notes.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of February 1, 1997, by and among the Guarantor, the Company, the Trust
and the Initial Purchasers named therein, as amended from time to time.
"Regulation S" means Regulation S under the Securities Act and any
successor regulation thereto.
"Regulation S Global Security" means any Global Capital Security or
Securities evidencing Capital Securities that are to be traded pursuant to
Regulation S.
"Relevant Trustee" has the meaning specified in Section 8.10.
"Rule 144" means Rule 144 under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Securities Register" and "Securities Registrar" are described in Section
5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such Person
is a beneficial owner within the meaning of the Delaware Business Trust Act.
"Subordinated Indenture" means the Subordinated Note Indenture, dated
as of February 1, 1997, among the Depositor, the Guarantor and the Indenture
Trustee, as supplemented by the Supplemental Indenture.
"Supplemental Indenture" means the First Supplemental Indenture, dated
as of February 4, 1997, by and among the Depositor, the Guarantor and the
Indenture Trustee.
"Transfer Restricted Capital Securities" has the meaning specified in
Section 2.04.
"Trust" means the Delaware business trust continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Amended and Restated Trust Agreement and any modification,
amendment or supplement, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Amended and Restated Trust Agreement and
any such modification, amendment or supplement, respectively.
"Trustees" means the Persons identified as "Trustees" in the preamble
to this Trust Agreement solely in their capacities as Trustees of the Trust
formed and continued hereunder and not in their individual capacities, or their
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Junior Subordinated Notes, (ii) any cash
on deposit in, or owing to, the Payment Account, and (iii) all proceeds and
rights in respect of the foregoing and any other property and assets for the
time being held or deemed to be held by the Property Trustee pursuant to this
Trust Agreement.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"Trust Security" means any one of the Common Securities or the Capital
Securities.
ARTICLE II
Establishment of the Trust
Section 2.01 Name. The Trust continued hereby shall be known as
"Southern Company Capital Trust I", in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued. The Administrative Trustees may change
the name of the Trust from time to time following written notice to the Holders.
Section 2.02 Offices of the Trustees; Principal Place of Business. The
address of the Property Trustee is Bankers Trust Company, Four Albany Street,
New York, New York 10006, or at such other address as the Property Trustee may
designate by written notice to the Securityholders, the Depositor and the
Guarantor. The principal place of business of the Delaware Trustee is 1001
Jefferson Street, Suite 550, Wilmington, Delaware 19801-1457, or at such other
address in Delaware as the Delaware Trustee may designate by notice to the
Depositor and the Guarantor. The address of the Administrative Trustees is c/o
The Southern Company, 270 Peachtree Street, N.W., Atlanta, Georgia 30303,
Attention: Secretary. The principal place of business of the Trust is c/o The
Southern Company, 270 Peachtree Street, N.W., Atlanta, Georgia 30308. The
Depositor may change the principal place of business of the Trust at any time by
giving notice thereof to the Trustees.
Section 2.03 Initial Contribution of Trust Property; Organizational
Expenses. The Delaware Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of the Trustees,
promptly reimburse the Trustees for any such expenses paid by the Trustees. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.04 Issuance of the Capital Securities. Contemporaneously with
the execution and delivery of this Trust Agreement, the Administrative Trustees,
on behalf of the Trust, shall execute and deliver to the Initial Purchasers
named in the Purchase Agreement Capital Securities Certificates, registered in
the name of the nominee of the initial Clearing Agency, in an aggregate amount
of 325,000 Capital Securities having an aggregate Liquidation Amount of
$325,000,000 (the "Transfer Restricted Capital Securities"), against receipt of
the aggregate purchase price of such Capital Securities of $325,000,000, which
amount the Administrative Trustees shall promptly deliver to the Property
Trustee. In addition, the Administrative Trustee, on behalf of the Trust, may
execute Capital Securities Certificates representing a class of Capital
Securities to be issued only in exchange for Transfer Restricted Capital
Securities pursuant to the exchange offer contemplated by the Registration
Rights Agreement (the "New Capital Securities").
Section 2.05 Subscription and Purchase of Junior Subordinated Notes;
Issuance of the Common Securities. Contemporaneously with the execution and
delivery of this Trust Agreement, the Administrative Trustees, on behalf of the
Trust, shall execute and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount of
10,052 Common Securities having an aggregate Liquidation Amount of $10,052,000,
against payment by the Depositor of such amount. Contemporaneously therewith,
the Administrative Trustees, on behalf of the Trust, shall subscribe to and
purchase from the Depositor Junior Subordinated Notes, registered in the name of
the Property Trustee, on behalf of the Trust and the Holders, and having an
aggregate principal amount equal to $335,052,000, and, in satisfaction of the
purchase price for such Junior Subordinated Notes, the Property Trustee, on
behalf of the Trust, shall deliver to the Depositor the sum of $335,052,000.
Section 2.06 Declaration of Trust. The exclusive purposes and functions
of the Trust are (i) to issue and sell the Trust Securities and use the proceeds
from such sale to acquire the Junior Subordinated Notes, and (ii) to engage in
those activities necessary, incidental, appropriate or convenient thereto. The
Depositor hereby appoints each of the Bank, the Delaware Bank, Wayne Boston and
Richard A. Childs as trustees of the Trust, to have all the rights, powers and
duties to the extent set forth herein. The Property Trustee hereby declares that
it will hold the Trust Property in trust upon and subject to the conditions set
forth herein for the benefit of the Trust and the Securityholders. The Trustees
shall have all rights, powers and duties set forth herein and in accordance with
applicable law with respect to accomplishing the purposes of the Trust. The
Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities, of the Property
Trustee or the Administrative Trustees set forth herein. The Delaware Trustee
shall be one of the Trustees for the sole and limited purpose of fulfilling the
requirements of the Delaware Business Trust Act.
Section 2.07 Authorization to Enter into Certain Transactions. The
Trustees shall conduct the affairs of the Trust in accordance with the terms of
this Trust Agreement. Subject to the limitations set forth in paragraph C of
this Section, and in accordance with the following paragraphs A and B, the
Trustees shall have the authority to enter into all transactions and agreements
determined by the Trustees to be appropriate in exercising the authority,
express (in the case of the Property Trustee) or implied, otherwise granted to
the Trustees under this Trust Agreement, and to perform all acts in furtherance
thereof, including without limitation, the following:
A. As among the Trustees, the Administrative Trustees, acting singly or
jointly, shall have the exclusive power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(i) to acquire the Junior Subordinated Notes with the proceeds
of the sale of the Trust Securities; provided, however, the
Administrative Trustees shall cause legal title to all of the Junior
Subordinated Notes to be vested in, and the Junior Subordinated Notes
to be held of record in the name of, the Property Trustee for the
benefit of the Trust and Holders of the Trust Securities;
(ii) to give the Depositor and the Property Trustee prompt
written notice of the occurrence of any Special Event (as defined in
the Supplemental Indenture) and to take any ministerial actions in
connection therewith; provided, that the Administrative Trustees shall
consult with the Depositor and the Property Trustee before taking or
refraining to take any ministerial action in relation to a Special
Event;
(iii) to establish a record date with respect to all actions
to be taken hereunder that require a record date be established,
including for the purposes of ss. 316(c) of the Trust Indenture Act and
with respect to Distributions, voting rights, redemptions, and
exchanges, and to issue relevant notices to Holders of the Trust
Securities as to such actions and applicable record dates;
(iv) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless pursuant to Section
2.07(B)(v), the Property Trustee has the power to bring such Legal
Action;
(v) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(vi) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(vii) to give the certificate to the Property Trustee required by
ss. 314(a)(4) of the Trust Indenture Act, which certificate may be
executed by any Administrative Trustee;
(viii) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of this
Trust Agreement;
(ix) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business
trust under the laws of the State of Delaware and of each other
jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Trust Securities or to enable
the Trust to effect the purposes for which the Trust has been created;
(x) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the
Administrative Trustees, on behalf of the Trust;
(xi) to issue and sell the Trust Securities;
(xii) to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, the Expense Agreement and
the Certificate Depository Agreement and such other agreements as may
be necessary or desirable in connection with the consummation hereof;
(xiii) to assist in the registration of the Capital Securities
under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(xiv) to assist in the listing of the Capital Securities upon
such securities exchange or exchanges, if any, as shall be determined
by the Depositor and, if required, the registration of the Capital
Securities under the Exchange Act, and the preparation and filing of
all periodic and other reports and other documents pursuant to the
foregoing;
(xv) to send notices (other than notices of default) and other
information regarding the Trust Securities and the Junior Subordinated
Notes to the Securityholders in accordance with this Trust Agreement;
(xvi) to appoint a Paying Agent (subject to Section 5.09),
authenticating agent and Securities Registrar in accordance with this
Trust Agreement;
(xvii) to register transfers of the Trust Securities in
accordance with this Trust Agreement;
(xviii) to assist in, to the extent provided in this Trust
Agreement, the winding up of the affairs of and termination of the
Trust and the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of Delaware; and
(xix) to take any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is necessary,
appropriate, convenient or advisable to protect and conserve the Trust
Property for the benefit of the Securityholders (without consideration
of the effect of any such action on any particular Securityholder).
B. The Property Trustee shall:
(i) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Trust
Securities to the extent the Junior Subordinated Notes are redeemed or
mature;
(ii) upon notice of distribution issued by the Administrative
Trustees in accordance with the terms of this Trust Agreement, engage
in such ministerial activities as shall be necessary or appropriate to
effect the distribution pursuant to terms of this Trust Agreement of
Junior Subordinated Notes to Holders of Trust Securities;
(iii) subject to the terms hereof, take any Legal Action which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's duties and obligations under this Trust Agreement or
the Trust Indenture Act; and
(iv) take all actions and perform such duties as may be
specifically required of the Property Trustee pursuant to the terms of
this Trust Agreement.
C. So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, pledge, set-off or otherwise dispose of any of the
Trust Property or interests therein, including to Securityholders, except as
expressly provided herein, (iii) take any action that would cause the Trust to
fail or cease to qualify as a grantor trust for United States federal income tax
purposes, (iv) incur any indebtedness for borrowed money, (v) take or consent to
any action that would result in the placement of a Lien on any of the Trust
Property, (vi) issue any securities other than the Trust Securities, or (vii)
have any power to, or agree to any action by the Depositor that would, vary the
investment (within the meaning of Treasury Regulation Section 301.7701-4(c)) of
the Trust or of the Securityholders. The Trustees shall defend all claims and
demands of all Persons at any time claiming any Lien on any of the Trust
Property adverse to the interest of the Trust or the Securityholders in their
capacity as Securityholders.
D. In connection with the issue and sale of the Capital Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) to prepare an Offering Memorandum in relation to the Capital
Securities, including any amendments thereto;
(ii) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Capital
Securities and to do any and all such acts, other than actions which
must be taken by or on behalf of the Trust, and advise the Trustees of
actions they must take on behalf of the Trust, and prepare for
execution and filing any documents to be executed and filed by the
Trust or on behalf of the Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(iii) to negotiate the terms of the Purchase Agreement providing
for the sale of the Capital Securities and to execute, deliver and
perform the Purchase Agreement on behalf of the Trust; and
(iv) any other actions necessary, incidental, appropriate or
convenient to carry out any of the foregoing activities.
E. Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the Investment Company Act of 1940, as
amended, or taxed as other than a grantor trust for United States federal income
tax purposes and so that the Junior Subordinated Notes will be treated as
indebtedness of the Depositor for United States federal income tax purposes. In
this connection, the Depositor and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the Certificate of Trust
or this Trust Agreement, that each of the Depositor and the Administrative
Trustees determines in its discretion to be necessary or desirable for such
purposes, as long as such action does not materially and adversely affect the
interests of the Holders of the Capital Securities.
Section 2.08 Assets of Trust. The assets of the Trust shall consist of the
Trust Property.
Section 2.09 Title to Trust Property. Legal title to all Trust Property
shall be vested at all times in the Property Trustee (in its capacity as such)
and shall be held and administered by the Property Trustee for the benefit of
the Securityholders and the Trust in accordance with this Trust Agreement. The
right, title and interest of the Property Trustee to the Junior Subordinated
Notes shall vest automatically in each Person who may thereafter be appointed as
Property Trustee in accordance with the terms hereof. Such vesting and cessation
of title shall be effective whether or not conveyancing documents have been
executed and delivered.
Section 2.10 Mergers and Consolidations of the Trust. The Trust may not
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety to any
corporation or other body, except as described below or otherwise provided in
this Trust Agreement. The Trust may at the request of the Company, with the
consent of the Administrative Trustees and without the consent of the Holders of
the Trust Securities, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any state; provided,
that (i) such successor entity either (x) expressly assumes all of the
obligations of the Trust with respect to the Trust Securities or (y) substitutes
for the Capital Securities other securities having substantially the same terms
as the Trust Securities (herein referred to as the "Successor Securities") so
long as the Successor Securities rank the same as the Trust Securities rank in
priority with respect to Distributions and payments upon liquidation, redemption
and otherwise, (ii) the Company expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of legal title to the Junior Subordinated Notes, (iii) the Capital
Securities or any Successor Securities are listed, or any Successor Securities
will be listed upon notification of issuance, on any national securities
exchange or other organization on which the Capital Securities are then listed,
(iv) such merger, consolidation, amalgamation or replacement does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the Holders of the Trust Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, or replacement, the Company and the
Property Trustee have received an Opinion of Counsel to the effect that (A) such
merger, consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the Holders of the Trust Securities
(including any Successor Securities) in any material respect, and (B) following
such merger, consolidation, amalgamation or replacement, neither the Trust nor
such successor entity will be required to register as an investment company
under the Investment Company Act of 1940, and (viii) the Company guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust
shall not, except with the consent of Holders of 100% in Liquidation Amount of
the Trust Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause the Trust or the successor
entity to be classified as other than a grantor trust for federal income tax
purposes.
ARTICLE III
Payment Account
Section 3.01 Payment Account.
(a) On or prior to the Issue Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and an agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal or interest on, and any other payments
or proceeds with respect to, the Junior Subordinated Notes. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
Distributions; Redemption
Section 4.01 Distributions.
(a) Distributions on the Trust Securities shall be cumulative and
accrue from the Issue Date and, except in the event that the Depositor exercises
its right to extend the interest payment period for the Junior Subordinated
Notes pursuant to Section 104 of the Supplemental Indenture, shall be payable
semi-annually in arrears on February 1 and August 1 of each year, commencing on
August 1, 1997. If any date on which Distributions are otherwise payable on the
Trust Securities is not a Business Day, then the payment of such Distribution
shall be made on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, payment of such
Distribution shall be made on the immediately preceding Business Day, in each
case, with the same force and effect as if made on such date (each such date, a
"Distribution Date").
(b) Distributions payable on the Trust Securities shall be fixed at a
rate of 8.19% per annum of the Liquidation Amount of the Trust Securities. The
amount of Distributions payable for any full semi-annual period shall be
computed on the basis of twelve 30-day months and a 360-day year. If the
interest payment period for the Junior Subordinated Notes is extended pursuant
to Section 104 of the Supplemental Indenture (an "Extension Period"), then the
rate per annum at which Distributions on the Trust Securities accumulate shall
be increased by an amount such that the aggregate amount of Distributions that
accumulate on all Trust Securities during any such Extension Period is equal to
the aggregate amount of interest (including interest payable on unpaid interest
at the percentage rate per annum set forth above, compounded semi-annually, to
the extent permitted by applicable law) that accrues during any such Extension
Period on the Junior Subordinated Notes. The payment of such deferred interest,
together with interest thereon, will be distributed to the Holders of the Trust
Securities as received at the end of any Extension Period. The amount of
Distributions payable for any period shall include the Additional Amounts, if
any.
(c) Distributions on the Trust Securities shall be made and shall be
deemed payable on each Distribution Date only to the extent that the Trust has
legally and immediately available funds in the Payment Account for the payment
of such Distributions.
(d) Distributions, including Additional Amounts, if any, on the Trust
Securities on each Distribution Date shall be payable to the Holders thereof as
they appear on the Securities Register for the Trust Securities on the relevant
record date, which shall be the close of business on the fifteenth calendar day
prior to the relevant Distribution Date.
Each Trust Security upon registration of transfer of or in exchange for
or in lieu of any other Trust Security shall carry the rights of Distributions
accrued (including Additional Amounts, if any) and unpaid, and to accrue
(including Additional Amounts, if any), which were carried by such other Trust
Security.
Section 4.02 Redemption.
(a) On each Redemption Date with respect to the Junior Subordinated
Notes, the Trust will be required to redeem a Like Amount of Trust Securities at
the applicable Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Securities Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the total Liquidation Amount of the Trust Securities to be
redeemed; and
(v) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accrue on and after such date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Junior Subordinated Notes. Redemptions of the Trust Securities
shall be made and the Redemption Price shall be deemed payable on each
Redemption Date only to the extent that the Trust has funds legally and
immediately available in the Payment Account for the payment of such Redemption
Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Capital Securities, then, by 2:00 p.m. New York time, on the Redemption
Date, subject to Section 4.02(c), the Property Trustee will, so long as the
Capital Securities are in book-entry only form, irrevocably deposit with the
Clearing Agency for the Capital Securities funds sufficient to pay the
applicable Redemption Price. If the Capital Securities are not in book-entry
only form, the Property Trustee, subject to Section 4.02(c), shall irrevocably
deposit with the Paying Agent funds sufficient to pay the applicable Redemption
Price and will give the Paying Agent irrevocable instructions to pay the
Redemption Price to the Holders thereof upon surrender of their Capital
Securities Certificates. Notwithstanding the foregoing, Distributions payable on
or prior to the Redemption Date for any Trust Securities called for redemption
shall be payable to the Holders of such Trust Securities as they appear on the
Securities Register for the Trust Securities on the relevant record dates for
the related Distribution Dates. If notice of redemption shall have been given
and funds deposited as required, then upon the date of such deposit, all rights
of Securityholders holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price, but
without interest, and such Securities will cease to be outstanding. In the event
that any date on which any Redemption Price is payable is not a Business Day,
then payment of the Redemption Price payable on such date shall be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such Redemption Price shall be
made on the immediately preceding Business Day, in each case, with the same
force and effect as if made on such date. In the event that payment of the
Redemption Price in respect of Trust Securities is improperly withheld or
refused and not paid either by the Trust or by the Guarantor pursuant to the
Guarantee, Distributions on such Trust Securities will continue to accrue at the
then applicable rate, from such Redemption Date originally established by the
Trust for such Capital Securities to the date such Redemption Price is actually
paid.
(e) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated 3% to the Common Securities and 97%
to the Capital Securities, with such adjustments that each amount so allocated
shall be divisible by $1,000. The particular Capital Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Capital Securities not previously called
for redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for a redemption of portions
(equal to $1,000 or integral multiple thereof) of the Liquidation Amount of
Capital Securities of a denomination larger than $1,000; provided, however, that
before undertaking redemption of the Capital Securities on other than a pro rata
basis, the Property Trustee shall have received an Opinion of Counsel that the
status of the Trust as a grantor trust for federal income tax purposes would not
be adversely affected. The Property Trustee shall promptly notify the Securities
Registrar in writing of the Capital Securities selected for redemption and, in
the case of any Capital Securities selected for partial redemption, the
Liquidation Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions relating to the
redemption of Capital Securities shall relate, in the case of any Capital
Securities redeemed or to be redeemed only in part, to the portion of the
Liquidation Amount of Capital Securities which has been or is to be redeemed.
(f) Subject to the foregoing provisions of Section 4.02 and to
applicable law (including, without limitation, United States federal securities
laws), the Company, the Guarantor or their Affiliates may, at any time and from
time to time, purchase outstanding Capital Securities by tender, in the open
market or by private agreement.
Section 4.03 Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made pro rata based on the Liquidation Amount of the Trust
Securities; provided, however, that if on any Distribution Date or Redemption
Date an Indenture Event of Default shall have occurred and be continuing, no
payment of any Distribution (including Additional Amounts, if applicable) on, or
Redemption Price of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid Distributions
(including Additional Amounts, if applicable) on all Outstanding Capital
Securities for all distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all Outstanding Capital Securities, shall have been made or provided
for, and all funds immediately available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or Redemption Price of, Capital
Securities then due and payable.
(b) In the case of the occurrence of any Indenture Event of Default,
the Holder of Common Securities will be deemed to have waived any such Event of
Default under this Trust Agreement until the effect of all such Events of
Default with respect to the Capital Securities have been cured, waived or
otherwise eliminated. Until any such Events of Default under this Trust
Agreement with respect to the Capital Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Capital Securities and not the Holder of the Common Securities,
and only the Holders of the Capital Securities will have the right to direct the
Property Trustee to act on their behalf.
Section 4.04 Payment Procedures. Payments in respect of the Capital
Securities shall be made by check mailed to the address of the Person entitled
thereto as such address shall appear on the Securities Register or, if the
Capital Securities are held by a Clearing Agency, such Distributions shall be
made to the Clearing Agency, which shall credit the relevant Persons' accounts
at such Clearing Agency on the applicable distribution dates. Payments in
respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Holder of the Common
Securities.
Section 4.05 Tax Returns and Reports. The Administrative Trustee(s)
shall prepare (or cause to be prepared), at the Depositor's expense, and file
all United States federal, state and local tax and information returns and
reports required to be filed by or in respect of the Trust. The Administrative
Trustee(s) shall provide or cause to be provided on a timely basis to each
Holder any Internal Revenue Service form required to be so provided in respect
of the Trust Securities.
ARTICLE V
Trust Securities Certificates
Section 5.01 Initial Ownership. Upon the creation of the Trust by the
contribution by the Depositor pursuant to Section 2.03 and until the issuance of
the Trust Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the Trust.
Section 5.02 The Trust Securities Certificates. Each of the Capital and
Common Securities Certificates shall be issued in minimum denominations of
$1,000 and integral multiples in excess thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of at least one Administrative Trustee. Trust Securities Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Trust Securities Certificates or did not hold such offices at the date of
authentication and delivery of such Trust Securities Certificates. A transferee
of a Trust Securities Certificate shall become a Securityholder, and shall be
entitled to the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Section 5.04.
Section 5.03 Authentication of Trust Securities Certificates. On the
Issue Date, the Administrative Trustees shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04
and 2.05, to be executed on behalf of the Trust, authenticated and delivered to
or upon the written order of the Depositor signed by its Chairman of the Board,
its President or any Vice President, without further corporate action by the
Depositor, in authorized denominations. No Trust Securities Certificate shall
entitle its holder to any benefit under this Trust Agreement, or shall be valid
for any purpose, unless there shall appear on such Trust Securities Certificate
a certificate of authentication substantially in the form set forth in Exhibit E
or Exhibit C, as applicable, executed by at least one Administrative Trustee by
manual signature; such authentication shall constitute conclusive evidence that
such Trust Securities Certificate shall have been duly authenticated and
delivered hereunder. All Trust Securities Certificates shall be dated the date
of their authentication.
Section 5.04 Registration of Transfer and Exchange of Capital
Securities Certificates. (a) The Securities Registrar shall keep or cause to be
kept, at the office or agency maintained pursuant to Section 5.08, a Securities
Register in which, subject to such reasonable regulations as it may prescribe,
the Securities Registrar shall provide for the registration of Capital
Securities Certificates and the Common Securities Certificates (subject to
Section 5.10 in the case of the Common Securities Certificates) and registration
of transfers and exchanges of Capital Securities Certificates as herein
provided. The Property Trustee shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.08, the
Administrative Trustees shall execute, authenticate and deliver in the name of
the designated transferee or transferees one or more new Capital Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
dated the date of authentication by the Administrative Trustee or Trustees. The
Securities Registrar shall not be required to register the transfer of any
Capital Securities that have been called for redemption. At the option of a
Holder, Capital Securities Certificates may be exchanged for other Capital
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Capital Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.08.
Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees and
the Securities Registrar duly executed by the Holder or his attorney duly
authorized in writing. Each Capital Securities Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Securities Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities Certificates, but the Securities Registrar or the
Administrative Trustees may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer or
exchange of Capital Securities Certificates.
(b)(i) At any time at the request of the beneficial holder of a Capital
Security in global form, such beneficial holder shall be entitled to obtain a
definitive Capital Security upon written request to the Property Trustee in
accordance with the standing instructions and procedures existing between the
Clearing Agency and the Property Trustee for the issuance thereof. Any transfer
of a beneficial interest in a Capital Security in global form which cannot be
effected through book-entry settlement must be effected by the delivery to the
transferee (or its nominee) of a definitive Capital Security or Securities
registered in the name of the transferee (or its nominee) on the books
maintained by the Securities Registrar. With respect to any such transfer, the
Property Trustee will cause, in accordance with the standing instructions and
procedures existing between the Clearing Agency and the Property Trustee, the
aggregate liquidation amount of the Global Capital Security to be reduced and,
following such reduction, the Property Trustee will cause Definitive Capital
Securities in the appropriate aggregate liquidation amount in the name of such
transferee (or its nominee) and bearing such restrictive legends as may be
required by this Trust Agreement to be delivered. In connection with any such
transfer, the Property Trustee may request such representations and agreements
relating to the restrictions on transfer of such Capital Securities from such
transferee (or such transferee's nominee) as the Property Trustee may reasonably
require.
(ii) So long as the Capital Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Capital Security to a QIB in accordance with Rule 144A, unless
otherwise requested by the transferor, and upon receipt of the definitive
Capital Security being so transferred, together with a certification from the
transferor that the transferor reasonably believes the transferee is a QIB (or
other evidence satisfactory to the Property Trustee), the Property Trustee shall
make an endorsement on the Restricted Global Capital Security to reflect an
increase in the aggregate liquidation amount of the Restricted Global Capital
Security, and the Property Trustee shall cancel such definitive Capital Security
and cause, in accordance with the standing instructions and procedures existing
between the Clearing Agency and the Property Trustee, the aggregate liquidation
amount of Capital Securities represented by the Restricted Global Security to be
increased accordingly.
(iii) So long as the Capital Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Capital Security in accordance with Regulation S, if requested by the
transferor, and upon receipt of the definitive Capital Security or Capital
Securities being so transferred, together with a certification from the
transferor that the transfer was made in accordance with Rule 903 or 904 of
Regulation S or Rule 144 under the Securities Act (or other evidence
satisfactory to the Property Trustee), the Property Trustee shall make or direct
the custodian to make an endorsement on the Regulation S Global Security to
reflect an increase in the aggregate liquidation amount of the Capital
Securities represented by the Regulation S Global Security, and the Property
Trustee shall cancel such definitive Capital Security or Capital Securities and
cause or direct the Clearing Agency to cause, in accordance with the standing
instructions and procedures existing between the Clearing Agency and the
Property Trustee, the aggregate liquidation amount of Capital Securities
represented by the Regulation S Global Security to be increased accordingly.
(iv) If a holder of a beneficial interest in the Restricted Global
Security wishes at any time to exchange its interest in the Restricted Global
Security for an interest in the Regulation S Global Security, or to transfer its
interest in the Restricted Global Security to a person who wishes to take
delivery thereof in the form of an interest in the Regulation S Global Security,
such holder may, subject to the rules and procedures of the Clearing Agency and
to the requirements set forth in the following sentence, exchange or cause the
exchange or transfer or cause the transfer of such interest for an equivalent
beneficial interest in the Regulation S Global Security. Upon receipt by the
Property Trustee, as transfer agent, of (1) instructions given in accordance
with the Clearing Agency's procedures from or on behalf of a holder of a
beneficial interest in the Restricted Global Security, directing the Property
Trustee (via DWAC), as transfer agent, to credit or cause to be credited a
beneficial interest in the Regulation S Global Security in an amount equal to
the beneficial interest in the Restricted Global Security to be exchanged or
transferred, (2) a written order given in accordance with the Clearing Agency's
procedures containing information regarding the Euroclear or Cedel Bank account
to be credited with such increase and the name of such account, and (3) a
certificate given by the holder of such beneficial interest stating that the
exchange or transfer of such interest has been made pursuant to and in
accordance with Rule 903 or Rule 904 of Regulation S or Rule 144 under the
Securities Act (or other evidence satisfactory to the Property Trustee), the
Property Trustee, as transfer agent, shall promptly deliver appropriate
instructions to the Clearing Agency (via DWAC), its nominee, or the custodian
for the Clearing Agency, as the case may be, to reduce or reflect on its records
a reduction of the Restricted Global Security by the aggregate liquidation
amount of the beneficial interest in such Restricted Global Security to be so
exchanged or transferred from the relevant participant, and the Property
Trustee, as transfer agent, shall promptly deliver appropriate instructions (via
DWAC) to the Clearing Agency, its nominee, or the custodian for the Clearing
Agency, as the case may be, concurrently with such reduction, to increase or
reflect on its records an increase of the liquidation amount of such Regulation
S Global Security by the aggregate liquidation amount of the beneficial interest
in such Restricted Global Security to be so exchanged or transferred, and to
credit or cause to be credited to the account of the person specified in such
instructions (who may be Morgan Guaranty Trust Company of New York, Brussels
office, as operator of Euroclear or Cedel Bank or another agent member of
Euroclear or Cedel Bank or both, as the case may be, acting for and on behalf of
them) a beneficial interest in such Regulation S Global Security equal to the
reduction in the liquidation amount of such Restricted Global Security.
(v) If a holder of a beneficial interest in the Regulation S Global
Security wishes at any time to exchange its interest in the Regulation S Global
Security for an interest in the Restricted Global Security, or to transfer its
interest in the Regulation S Global Security to a person who wishes to take
delivery thereof in the form of an interest in the Restricted Global Security,
such holder may, subject to the rules and procedures of Euroclear or Cedel Bank
and the Clearing Agency, as the case may be, and to the requirements set forth
in the following sentence, exchange or cause the exchange or transfer or cause
the transfer of such interest for an equivalent beneficial interest in such
Restricted Global Security. Upon receipt by the Property Trustee, as transfer
agent, of (1) instructions given in accordance with the procedures of Euroclear
or Cedel Bank and the Clearing Agency, as the case may be, from or on behalf of
a beneficial owner of an interest in the Regulation S Global Security directing
the Property Trustee, as transfer agent, to credit or cause to be credited a
beneficial interest in the Restricted Global Security in an amount equal to the
beneficial interest in the Regulation S Global Security to be exchanged or
transferred, (2) a written order given in accordance with the procedures of
Euroclear or Cedel Bank and the Clearing Agency, as the case may be, containing
information regarding the account with the Clearing Agency to be credited with
such increase and the name of such account, and (3) prior to the expiration of
the Restricted Period, a certificate given by the holder of such beneficial
interest and stating that the person transferring such interest in such
Regulation S Global Security reasonably believes that the person acquiring such
interest in the Restricted Global Security is a QIB and is obtaining such
beneficial interest for its own account or the account of a QIB in a transaction
meeting the requirements of Rule 144A and any applicable securities laws of any
state of the United States or any other jurisdiction (or other evidence
satisfactory to the Property Trustee), the Property Trustee, as transfer agent,
shall promptly deliver (via DWAC) appropriate instructions to the Clearing
Agency, its nominee, or the custodian for the Clearing Agency, as the case may
be, to reduce or reflect on its records a reduction of the Regulation S Global
Security by the aggregate liquidation amount of the beneficial interest in such
Regulation S Global Security to be exchanged or transferred, and the Property
Trustee, as transfer agent, shall promptly deliver (via DWAC) appropriate
instructions to the Clearing Agency, its nominee, or the custodian for the
Clearing Agency, as the case may be, concurrently with such reduction, to
increase or reflect on its records an increase of the liquidation amount of the
Restricted Global Security by the aggregate liquidation amount of the beneficial
interest in the Regulation S Global Security to be so exchanged or transferred,
and to credit or cause to be credited to the account of the person specified in
such instructions a beneficial interest in the Restricted Global Security equal
to the reduction in the liquidation amount of the Regulation S Global Security.
After the expiration of the Restricted Period, the certification requirement set
forth in clause (3) of the second sentence of this Section 5.04(b) (v) will no
longer apply to such exchanges and transfers.
(vi) Any beneficial interest in one of the Global Securities that is
transferred to a person who takes delivery in the form of an interest in the
other Global Security will, upon transfer, cease to be an interest in such
Global Security and become an interest in the other Global Security and,
accordingly, will thereafter be subject to all transfer restrictions and other
procedures applicable to beneficial interests in such other Global Security for
as long as it remains such an interest.
(vii) Prior to one year commencing on the later of the commencement of
the offering of the Capital Securities and the Closing Date (the "Restricted
Period"), beneficial interests in a Regulation S Global Security may only be
held through Morgan Guaranty Trust Company of New York, Brussels office, as
operator of Euroclear or Citibank, N.A., as facilitator for Cedel Bank's access
to DTC or another agent member of Euroclear and Cedel Bank acting for and on
behalf of them unless delivery is made through the Restricted Global Security in
accordance with the certification requirements hereof. During the Restricted
Period, interests in the Regulation S Global Security, may be exchanged for
interests in the Restricted Global Security or for definitive Securities only in
accordance with the certification requirements described above.
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees or any one of them on behalf of the Trust
shall execute and authenticate and make available for delivery, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class, tenor and
denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section, the Administrative Trustees or the Securities
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Trust Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
Section 5.06 Persons Deemed Securityholders. Prior to due presentation
of a Trust Securities Certificate for registration of transfer, the Trustees or
the Securities Registrar shall treat the Person in whose name any Trust
Securities Certificate shall be registered in the Securities Register as the
owner of such Trust Securities Certificate for the purpose of receiving
Distributions (subject to Section 4.01(d)) and for all other purposes
whatsoever, and neither the Trustees nor the Securities Registrar shall be bound
by any notice to the contrary.
Section 5.07 Access to List of Securityholders' Names and Addresses.
The Administrative Trustees shall furnish or cause to be furnished to (i) the
Depositor and the Property Trustee semi-annually, not later than June 1 and
December 1 in each year, and (ii) the Depositor or the Property Trustee, as the
case may be, within 30 days after receipt by any Administrative Trustee of a
request therefor from the Depositor or the Property Trustee, as the case may be,
in writing, a list, in such form as the Depositor or the Property Trustee, as
the case may be, may reasonably require, of the names and addresses of the
Securityholders as of a date not more than 15 days prior to the time such list
is furnished; provided, that the Administrative Trustees shall not be obligated
to provide such list at any time such list does not differ from the most recent
list given to the Depositor and the Property Trustee by the Administrative
Trustees or at any time the Property Trustee is the Securities Registrar. If
three or more Securityholders or one or more Holders of Trust Securities
Certificates evidencing not less than 25% of the outstanding Liquidation Amount
apply in writing to the Administrative Trustees, and such application states
that the applicants desire to communicate with other Securityholders with
respect to their rights under this Trust Agreement or under the Trust Securities
Certificates and such application is accompanied by a copy of the communication
that such applicants propose to transmit, then the Administrative Trustees
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Securityholders. Each Holder, by receiving and holding a Trust Securities
Certificate, shall be deemed to have agreed not to hold either the Depositor or
the Administrative Trustees accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
Section 5.08 Maintenance of Office or Agency. The Administrative
Trustees shall maintain in the Borough of Manhattan, New York, an office or
offices or agency or agencies where Capital Securities Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustees in respect of the Trust Securities Certificates
may be served. The Administrative Trustees initially designate Bankers Trust
Company, Four Albany Street, New York, New York 10006, as its principal agency
for such purposes. The Administrative Trustees shall give prompt written notice
to the Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.
Section 5.09 Appointment of Paying Agent. The Paying Agent shall make
Distributions and other payments provided hereby to Securityholders from the
Payment Account and shall report the amounts of such Distributions and payments
to the Property Trustee and the Administrative Trustees. Any Paying Agent shall
have the revocable power to withdraw funds from the Payment Account for the
purpose of making the Distributions and payments provided hereby. The
Administrative Trustees may revoke such power and remove the Paying Agent if
such Trustees determine in their sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect. The Paying Agent shall initially be the Property Trustee, and it may
choose any co-paying agent that is acceptable to the Administrative Trustees and
the Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees and the
Depositor. In the event that a Paying Agent shall resign or be removed, the
Administrative Trustees shall appoint a successor that is acceptable to the
Depositor to act as Paying Agent (which shall be a bank or trust company). The
Administrative Trustees shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Administrative Trustees to execute and
deliver to the Trustees an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Property Trustee. The provisions of
Sections 8.01, 8.03 and 8.06 shall apply to the Property Trustee also in its
role as Paying Agent, for so long as the Property Trustee shall act as Paying
Agent and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.
Section 5.10 Ownership of Common Securities by Depositor. On the Issue
Date, the Depositor shall acquire, and thereafter retain, beneficial and record
ownership of the Common Securities. Any attempted transfer of the Common
Securities, except for transfers by operation of law or to an Affiliate of the
Guarantor or the Depositor or a permitted successor under Section 801 of the
Subordinated Indenture, shall be void. The Administrative Trustees shall cause
each Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST
AGREEMENT REFERRED TO HEREIN".
Section 5.11 Book-Entry Capital Securities Certificates; Common Securities
Certificate.
(a) The Capital Securities Certificates, upon original issuance, will
be issued in the form of a typewritten Capital Securities Certificate or
Certificates representing Book-Entry Capital Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Capital Securities Certificate or Certificates
shall initially be registered on the Securities Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Owner will receive a
definitive Capital Securities Certificate representing such beneficial owner's
interest in such Capital Securities, except as provided in Section 5.13. Unless
and until Definitive Capital Securities Certificates have been issued to Owners
pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar and the Trustees shall be
entitled to deal with the Clearing Agency for all purposes of this
Trust Agreement relating to the Book-Entry Capital Securities
Certificates (including the payment of principal of and interest on the
Book-Entry Capital Securities and the giving of instructions or
directions to Owners of Book-Entry Capital Securities) as the sole
Holder of Book-Entry Capital Securities and shall have no obligations
to the Owners thereof;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Trust Agreement, the
provisions of this Section shall control; and
(iv) the rights of the Owners of the Book-Entry Capital
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement, unless
and until Definitive Capital Securities Certificates are issued
pursuant to Section 5.13, the Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit payments on the Capital Securities to such Clearing Agency
Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
Section 5.12 Notices to Clearing Agency. To the extent a notice or
other communication to the Owners is required under this Trust Agreement, unless
and until Definitive Capital Securities Certificates shall have been issued to
Owners pursuant to Section 5.13, the Trustees shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agency,
and shall have no obligations to the Owners.
Section 5.13 Definitive Capital Securities Certificates. If (i) the
Depositor advises the Trustees in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Capital Securities Certificates, and the Depositor is unable to locate a
qualified successor, or (ii) the Depositor at its option advises the Trustees in
writing that it elects to terminate the book-entry system through the Clearing
Agency, then the Administrative Trustees shall notify the Clearing Agency and
Holders of the Capital Securities. Upon surrender to the Administrative Trustees
of the typewritten Capital Securities Certificate or Certificates representing
the Book-Entry Capital Securities Certificates by the Clearing Agency,
accompanied by registration instructions, the Administrative Trustees or any one
of them shall execute and authenticate the Definitive Capital Securities
Certificates in accordance with the instructions of the Clearing Agency. Neither
the Securities Registrar nor the Trustees shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Capital Securities Certificates, the Trustees shall recognize the Holders of the
Definitive Capital Securities Certificates as Securityholders. The Definitive
Capital Securities Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
Section 5.14 Rights of Securityholders. The legal title to the Trust
Property is vested exclusively in the Property Trustee (in its capacity as such)
in accordance with Section 2.09, and the Securityholders shall not have any
right or title therein other than the beneficial ownership interest in the
assets of the Trust conferred by their Trust Securities, and they shall have no
right to call for any partition or division of property, profits or rights of
the Trust except as described below. The Trust Securities shall be personal
property giving only the rights specifically set forth therein and in this Trust
Agreement. The Trust Securities shall have no preemptive or other similar rights
and when issued and delivered to Securityholders against payment of the purchase
price therefor, except as otherwise provided in the Expense Agreement and
Section 10.01 hereof, will be fully paid and nonassessable by the Trust. Except
as otherwise provided in the Expense Agreement and Section 10.01 hereof, the
Holders of the Trust Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.01 Limitations on Voting Rights.
(a) Except as provided in this Section, in Section 8.10 or Section
10.03 of this Trust Agreement, in the Subordinated Indenture, and as otherwise
required by law, no Holder of Capital Securities shall have any right to vote or
in any manner otherwise control the administration, operation and management of
the Trust or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Trust Securities Certificates, be
construed so as to constitute the Securityholders from time to time as partners
or members of an association.
(b) So long as any Junior Subordinated Notes are held by the Property
Trustee, the Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee, or
executing any trust or power conferred on the Indenture Trustee with respect to
such Junior Subordinated Notes, (ii) waive any past default which is waivable
under Section 513 of the Subordinated Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior Subordinated
Notes shall be due and payable or (iv) consent to any amendment, modification or
termination of the Subordinated Indenture or the Junior Subordinated Notes,
where such consent shall be required, or to any other action, as holder of the
Junior Subordinated Notes, under the Subordinated Indenture, without, in each
case, obtaining the prior approval of the Holders of at least 66-2/3% in
Liquidation Amount of the Capital Securities; provided, however, that where a
consent under the Subordinated Indenture would require the consent of each
holder of Junior Subordinated Notes affected thereby, no such consent shall be
given by the Trustees without the prior written consent of each Holder of
Capital Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of Capital Securities, except
pursuant to a subsequent vote of the Holders of Capital Securities. The Property
Trustee shall notify all Holders of the Capital Securities of any notice of
default received from the Indenture Trustee with respect to the Junior
Subordinated Notes. In addition to obtaining the foregoing approvals of the
Holders of the Capital Securities, prior to taking any of the foregoing actions,
the Trustees shall, at the expense of the Depositor, obtain an Opinion of
Counsel experienced in such matters to the effect that the Trust will not be
classified as other than a grantor trust for United States federal income tax
purposes on account of such action.
(c) If any proposed amendment to this Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the Capital Securities,
whether by way of amendment to this Trust Agreement or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than pursuant to the
terms of this Trust Agreement, then the Holders of Outstanding Capital
Securities as a class will be entitled to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with the approval of
the Holders of at least 66-2/3% in Liquidation Amount of the Outstanding Capital
Securities. In addition to obtaining the foregoing approvals of the Holders of
the Capital Securities, prior to taking any of the foregoing actions, the
Trustees shall, at the expense of the Depositor, obtain an Opinion of Counsel
experienced in such matters to the effect that the Trust will not be classified
as other than a grantor trust for United States federal income tax purposes on
account of such action.
Section 6.02 Notice of Meetings. Notice of all meetings of the Capital
Securityholders, stating the time, place and purpose of the meeting, shall be
given by the Administrative Trustees pursuant to Section 10.08 to each Capital
Securityholder of record, at his registered address, at least 15 days and not
more than 90 days before the meeting. At any such meeting, any business properly
before the meeting may be so considered whether or not stated in the notice of
the meeting. Any adjourned meeting may be held as adjourned without further
notice.
Section 6.03 Meetings of Capital Securityholders. No annual meeting of
Securityholders is required to be held. The Administrative Trustees, however,
shall call a meeting of Securityholders to vote on any matter upon the written
request of the Capital Securityholders of record of 25% of the Capital
Securities (based upon their Liquidation Amount) and the Administrative Trustees
or the Property Trustee may, at any time in their discretion, call a meeting of
Capital Securityholders to vote on any matters as to which Capital
Securityholders are entitled to vote.
Capital Securityholders of record of 50% of the Capital Securities
(based upon their Liquidation Amount), present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Capital
Securityholders of record present, in person or by proxy, holding more than
66-2/3% of the Capital Securities (based upon their Liquidation Amount) held by
the Capital Securityholders of record present, either in person or by proxy, at
such meeting shall constitute the action of the Securityholders, unless this
Trust Agreement requires a greater number of affirmative votes.
Section 6.04 Voting Rights. Securityholders shall be entitled to one
vote for each $1,000 of Liquidation Amount represented by their Trust Securities
in respect of any matter as to which such Securityholders are entitled to vote.
Section 6.05 Proxies, etc. At any meeting of Securityholders, any
Securityholder entitled to vote may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Administrative Trustees, or with such other officer or agent of the Trust as the
Administrative Trustees may direct, for verification prior to the time at which
such vote shall be taken. Pursuant to a resolution of the Property Trustee,
proxies may be solicited in the name of the Property Trustee or one or more
officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.
Section 6.06 Securityholder Action by Written Consent. Any action which
may be taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding at least 66-2/3% of all outstanding Trust Securities
entitled to vote in respect of such action (or such other proportion thereof as
shall be required by any express provision of this Trust Agreement) shall
consent to the action in writing (based upon their Liquidation Amount).
Section 6.07 Record Date for Voting and Other Purposes. For the
purposes of determining the Securityholders who are entitled to notice of and to
vote at any meeting or by written consent, or to participate in any Distribution
on the Trust Securities in respect of which a record date is not otherwise
provided for in this Trust Agreement, or for the purpose of any other action,
the Administrative Trustees may from time to time fix a date, not more than 90
days prior to the date of any meeting of Securityholders or the payment of
Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
Section 6.08 Acts of Securityholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by Securityholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by an agent appointed
in writing; and, except as otherwise expressly provided herein, such action
shall become effective when such instrument or instruments are delivered to the
Administrative Trustees. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Securityholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Trust Agreement and (subject to Section 8.01)
conclusive in favor of the Trustees, if made in the manner provided in this
Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustees deem sufficient.
The ownership of Capital Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders of Trust
Securities and the Administrative Trustees or among such Securityholders or
Trustees with respect to the authenticity, validity or binding nature of any
request, demand, authorization, direction, consent, waiver or other Act of such
Securityholder or Trustee under this Article VI, then the determination of such
matter by the Property Trustee shall be conclusive with respect to such matter.
Section 6.09 Inspection of Records. Upon reasonable notice to the
Trustees, the records of the Trust shall be open to inspection by
Securityholders during normal business hours for any purpose reasonably related
to such Securityholder's interest as a Securityholder.
ARTICLE VII
Representations and Warranties of the
Property Trustee and Delaware Trustee
Section 7.01 Representations and Warranties of Property Trustee. The
Trustee that acts as initial Property Trustee represents and warrants to the
Trust and to the Depositor at the date of this Trust Agreement, and each
Successor Property Trustee represents and warrants to the Trust and the
Depositor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a New York banking corporation with trust
powers and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Trust Agreement;
(b) The execution, delivery and performance by the Property Trustee of
this Trust Agreement has been duly authorized by all necessary corporate action
on the part of the Property Trustee. This Trust Agreement has been duly executed
and delivered by the Property Trustee and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) The execution, delivery and performance of this Trust Agreement by
the Property Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Property Trustee; and
(d) No consent, approval or authorization of, or registration with or
notice to, any New York State or federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this Trust
Agreement.
Section 7.02 Representations and Warranties of Delaware Trustee
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Depositor at the date of this Trust Agreement,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Depositor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Trust Agreement;
(b) The execution, delivery and performance by the Delaware Trustee of
this Trust Agreement has been duly authorized by all necessary corporate action
on the part of the Delaware Trustee. This Trust Agreement has been duly executed
and delivered by the Delaware Trustee and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) No consent, approval or authorization of, or registration with or
notice to, any federal banking authority is required for the execution, delivery
or performance by the Delaware Trustee of this Trust Agreement; and
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
ARTICLE VIII
The Trustees
Section 8.01 Certain Duties and Responsibilities.
(a) The rights, duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
them. Whether or not therein expressly so provided, every provision of this
Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustees shall be subject to the provisions of this
Section.
(b) All payments made by the Property Trustee in respect of the Trust
Securities shall be made only from the income and proceeds from the Trust
Property and only to the extent that there shall be sufficient income or
proceeds from the Trust Property to enable the Property Trustee to make payments
in accordance with the terms hereof. Each Securityholder, by its acceptance of a
Trust Security, agrees that it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to it as herein
provided and that the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 8.01(b) does not limit the liability
of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the
case of the Property Trustee, in the Trust Indenture Act.
Section 8.02 Notice of Defaults. Within 90 days after the occurrence of
any Event of Default, the Property Trustee shall transmit, in the manner and to
the extent provided in Section 10.08, notice of any Event of Default known to
the Property Trustee to the Securityholders, the Administrative Trustees, the
Guarantor and the Depositor, unless such Event of Default shall have been cured
or waived.
Section 8.03 Certain Rights of Property Trustee. Subject to the provisions
of Section 8.01 and except as provided by law:
(i) the Property Trustee may conclusively rely and shall be
protected in acting or refraining from acting in good faith
upon any resolution, Opinion of Counsel, certificate, written
representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or
parties;
(ii) if (A) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative
courses of action, or (B) in construing any of the provisions
in this Trust Agreement the Property Trustee finds the same
ambiguous or inconsistent with any other provisions contained
herein, or (C) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then,
except as to any matter as to which the Capital
Securityholders are entitled to vote under the terms of this
Trust Agreement, the Property Trustee shall deliver a notice
to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken. The Property
Trustee shall take such action, or refrain from taking such
action, as the Property Trustee shall be instructed in writing
to take, or to refrain from taking, by the Depositor;
provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within ten Business
Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which to the
extent practicable shall not be less than two Business Days),
it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Trust Agreement
as it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall
have no liability except for its own bad faith, negligence or
willful misconduct;
(iii) the Property Trustee may consult with counsel of its selection
and the advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(iv) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the
Securityholders pursuant to this Trust Agreement, unless such
Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance
with such request or direction;
(v) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other document, unless requested in writing to do so by one or
more Securityholders; and
(vi) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through its agents or attorneys, provided that the
Property Trustee shall be responsible for its own negligence
or recklessness with respect to selection of any agent or
attorney appointed by it hereunder.
Section 8.04 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates shall be
taken as the statements of the Trust, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable for
the use or application by the Trust of the proceeds of the Trust Securities in
accordance with Section 2.05.
The Property Trustee may conclusively assume that any funds held by it
hereunder are legally available unless a Responsible Officer shall have received
written notice from the Company, any Holder or any other Trustee that such funds
are not legally available.
Section 8.05 May Hold Securities. Except as provided in the definition
of the term "Outstanding" in Article I, any Trustee or any other agent of the
Trustees or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and may otherwise deal with the Trust with
the same rights it would have if it were not a Trustee or such other agent.
Section 8.06 Compensation; Fees; Indemnity.
The Depositor agrees:
(1) to pay to the Trustees from time to time reasonable compensation
for all services rendered by the Trustees hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of their agents and counsel), except any such expense,
disbursement or advance as may be attributable to their willful misconduct,
negligence or bad faith; and
(3) to indemnify the Trustees for, and to hold the Trustees harmless
against, any and all loss, damage, claims, liability or expense incurred without
willful misconduct, negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of this Trust Agreement,
including the costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of their powers
or duties hereunder.
The provisions of this Section 8.06 shall survive the termination of
this Trust Agreement.
Section 8.07 Trustees Required; Eligibility.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that has
a combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind such
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity authorized to conduct a trust business and with its principal place
of business in the State of Delaware that shall act through one or more persons
authorized to bind such entity.
Section 8.08 Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement. To the extent permitted by the Trust Indenture Act, the Property
Trustee shall not be deemed to have a conflicting interest by virtue of being
trustee under the Guarantee.
Section 8.09 Co-Trustees and Separate Trustee.
At any time or times, for the purpose of meeting the legal requirements
of the Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Holder of the Common Securities and the
Property Trustee shall have power to appoint, and upon the written request of
the Property Trustee, the Depositor shall for such purpose join with the
Property Trustee in the execution, delivery and performance of all instruments
and agreements necessary or proper to appoint, one or more Persons approved by
the Property Trustee either to act as co-trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to act as separate
trustee of any such Trust Property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person or Persons
in the capacity aforesaid, any property, title, right or power deemed necessary
or desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case an Indenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall satisfy the requirements of Section 8.07.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(i) The Trust Securities shall be executed, authenticated and
delivered and all rights, powers, duties, and obligations hereunder in
respect of the custody of securities, cash and other personal property
held by, or required to be deposited or pledged with, the Trustees
hereunder, shall be exercised, solely by the Trustees.
(ii) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or imposed upon
and exercised or performed by the Property Trustee or by the Property
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Property Trustee shall
be incompetent or unqualified to perform such act, in which event such
rights, powers, duties, and obligations shall be exercised and
performed by such co-trustee or separate trustee.
(iii) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor,
may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section, and, in case an Indenture Event
of Default has occurred and is continuing, the Property Trustee shall
have power to accept the resignation of, or remove, any such co-trustee
or separate trustee without the concurrence of the Depositor. Upon the
written request of the Property Trustee, the Depositor shall join with
the Property Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee, or any other such trustee hereunder.
(v) The Trustees shall not be liable by reason of any act of a
co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
Section 8.10 Resignation and Removal; Appointment of Successor. No
resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Relevant Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Relevant
Trustee in accordance with the applicable requirements of Section 8.11.
The Relevant Trustee may resign at any time by giving written notice
thereof to the Securityholders. If the instrument of acceptance by a successor
Relevant Trustee required by Section 8.11 shall not have been delivered to the
Relevant Trustee within 30 days after the giving of such notice of resignation,
the resigning Relevant Trustee may petition any court of competent jurisdiction
for the appointment of a successor Relevant Trustee.
Unless an Indenture Event of Default shall have occurred and be
continuing, the Relevant Trustee may be removed at any time by Act of the Holder
of the Common Securities. If an Indenture Event of Default shall have occurred
and be continuing, the Relevant Trustee may be removed at such time by Act of
the Securityholders of a majority in Liquidation Amount of the Capital
Securities Certificates, delivered to the Relevant Trustee (in its individual
capacity and on behalf of the Trust).
If the Relevant Trustee shall resign, be removed or become incapable of
continuing to act as Trustee at a time when no Indenture Event of Default shall
have occurred and be continuing, the Holder of the Common Securities, by Act of
the Holder of the Common Securities delivered to the retiring Relevant Trustee,
shall promptly appoint a successor Relevant Trustee or Trustees, and the
retiring Relevant Trustee shall comply with the applicable requirements of
Section 8.11. If the Relevant Trustee shall resign, be removed or become
incapable of continuing to act as the Relevant Trustee at a time when an
Indenture Event of Default shall have occurred and be continuing, the Holders of
Capital Securities, by Act of the Securityholders of a majority in Liquidation
Amount of the Capital Securities then outstanding delivered to the retiring
Relevant Trustee, shall promptly appoint a successor Relevant Trustee or
Trustees, and the Relevant Trustee shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee shall have been so appointed
in accordance with this Section 8.10 and accepted appointment in the manner
required by Section 8.11, any Securityholder who has been a Securityholder of
Trust Securities for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
The retiring Relevant Trustee shall give notice of each resignation and
each removal of the Relevant Trustee, and each appointment of a successor
Trustee to all Securityholders in the manner provided in Section 10.08 and shall
give notice to the Depositor. Each notice shall include the name of the
successor Relevant Trustee and the address of its Corporate Trust Office if it
is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes incompetent or incapacitated or resigns, the
vacancy created by such death, incompetence or incapacity or resignation may be
filled by (i) the act of the remaining Administrative Trustee or (ii) otherwise
by the Depositor (with the successor in each case being an individual who
satisfies the eligibility requirement for Administrative Trustees set forth in
Section 8.07). Additionally, notwithstanding the foregoing or any other
provision of this Trust Agreement, in the event the Depositor believes that any
Administrative Trustee has become incompetent or incapacitated, the Depositor,
by notice to the remaining Trustees, may terminate the status of such Person as
an Administrative Trustee (in which case the vacancy so created will be filled
in accordance with the preceding sentence).
Section 8.11 Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Relevant Trustee, every such successor
Relevant Trustee so appointed shall execute, acknowledge and deliver to the
Trust and to the retiring Relevant Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Relevant
Trustee shall become effective and such successor Relevant Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Relevant Trustee; but, on the request
of the Depositor or the successor Relevant Trustee, such retiring Relevant
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Relevant Trustee all the rights, powers and
trusts of the retiring Relevant Trustee and shall duly assign, transfer and
deliver to such successor Relevant Trustee all property and money held by such
retiring Relevant Trustee hereunder.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
Section 8.12 Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Property Trustee, Delaware Trustee or any
Administrative Trustee which is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Relevant Trustee shall be a party, or
any Person succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
Section 8.13 Preferential Collection of Claims Against Depositor or
Trust. If and when the Property Trustee shall be or become a creditor of the
Depositor or the Trust (or any other obligor upon the Junior Subordinated Notes
or the Trust Securities), the Property Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Depositor or Trust (or any such other obligor). For purposes of Section
311(b)(4) and (6) of the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Depositor or the Trust (or any such obligor) for the purpose of financing the
purchase, processing, manufacturing, shipment, storage or sale of goods, wares
or merchandise and which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or merchandise previously
constituting the security, provided the security is received by the Property
Trustee simultaneously with the creation of the creditor relationship with the
Depositor or the Trust (or any such obligor) arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
Section 8.14 Reports by Property Trustee.
(a) Within 60 days after May 15 of each year commencing with May 15,
1997, if required by Section 313(a) of the Trust Indenture Act, the Property
Trustee shall transmit a brief report dated as of such May 15 with respect to
any of the events specified in such Section 313(a) that may have occurred since
the later of the date of this Trust Agreement or the preceding May 15.
(b) The Property Trustee shall transmit to Securityholders the reports
required by Section 313(b) of the Trust Indenture Act at the times specified
therein.
(c) Reports pursuant to this Section shall be transmitted in the manner
and to the Persons required by Sections 313(c) and (d) of the Trust Indenture
Act.
Section 8.15 Reports to the Property Trustee. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and, within 120 days after the end of each
fiscal year of the Depositor, the compliance certificate required by Section
314(a)(4) of the Trust Indenture Act in the form and in the manner required by
Section 314 of the Trust Indenture Act.
Section 8.16 Evidence of Compliance with Conditions Precedent. Each of
the Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given pursuant to Section 314(c)(1) of the
Trust Indenture Act shall comply with Section 314(e) of the Trust Indenture Act.
Section 8.17 Number of Trustees.
(a) The number of Trustees shall initially be four, provided that the
Depositor by written instrument may increase or decrease the number of
Administrative Trustees.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Trust Agreement), shall have all powers granted to the
Administrative Trustees and shall discharge the duties imposed upon the
Administrative Trustees by this Trust Agreement.
Section 8.18 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.07(A), including any registration statement or amendment thereto filed with
the Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number the doing of such things and the execution of
such instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
Section 8.19 Enforcement of Rights of Property Trustee by
Securityholders. If (i) the Trust fails to pay Distributions in full on the
Capital Securities for more than 10 consecutive semi-annual distribution
periods, or (ii) an Event of Default occurs and is continuing, then the Holders
of Capital Securities will rely on the enforcement by the Property Trustee of
its rights against the Company and the Guarantor as the holder of the Junior
Subordinated Notes. In addition, the Holders of a majority in aggregate
Liquidation Amount of the Capital Securities will have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Property Trustee or to direct the exercise of any trust or power conferred
upon the Property Trustee under this Trust Agreement, including the right to
direct the Property Trustee to exercise the remedies available to it as a holder
of the Junior Subordinated Notes, provided that such direction shall not be in
conflict with any rule of law or with this Trust Agreement, and could not
involve the Property Trustee in personal liability in circumstances where
reasonable indemnity would not be adequate. If the Property Trustee fails to
enforce its rights under the Junior Subordinated Notes, a Holder of Capital
Securities may, to the fullest extent permitted by applicable law, institute a
legal proceeding against the Company or the Guarantor or both to enforce its
rights under this Trust Agreement without first instituting any legal proceeding
against the Property Trustee or any other Person, including the Trust; it being
understood and intended that no one or more of such Holders shall have any right
in any manner whatsoever by virtue of, or by availing of, any provision of this
Trust Agreement to affect, disturb or prejudice the rights of any other of such
Holders or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Trust Agreement, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders. Notwithstanding the foregoing, a Holder of Capital Securities may
institute a legal proceeding directly against the Company or the Guarantor or
both, without first instituting a legal proceeding against or requesting or
directing that action be taken by the Property Trustee or any other Person, for
enforcement of payment to such Holder of principal of or interest on the Junior
Subordinated Notes having a principal amount equal to the aggregate stated
liquidation amount of the Capital Securities of such Holder on or after the due
dates therefor specified or provided for in the Junior Subordinated Notes. The
Company or the Guarantor shall be subrogated to all rights of the Holders of
Capital Securities in respect of any amounts paid to such Holders by the Company
or the Guarantor pursuant to this Section.
ARTICLE IX
Termination and Liquidation
Section 9.01 Termination Upon Expiration Date. The Trust shall
automatically terminate on December 31, 2042 (the "Expiration Date") or earlier
pursuant to Section 9.02.
Section 9.02 Early Termination. Upon the first to occur of any of the
following events (such first occurrence, an "Early Termination Event"), the
Trust shall be dissolved and terminated in accordance with the terms hereof:
(i) the occurrence of a Bankruptcy Event in respect of the
Depositor, dissolution or liquidation of the Depositor, or the
dissolution of the Trust pursuant to judicial decree;
(ii) the distribution of the Junior Subordinated Notes to
Securityholders as provided in Section 9.04 at the election of the
Company upon the occurrence of a Special Event (as defined in the
Supplemental Indenture); and
(iii) the payment at maturity or redemption of all of the Junior
Subordinated Notes, and the consequent payment of the Capital
Securities.
Section 9.03 Termination. The respective obligations and
responsibilities of the Trust and the Trustees created hereby shall terminate
upon the latest to occur of the following: (a) the distribution by the Property
Trustee to Securityholders upon the liquidation of the Trust pursuant to Section
9.04, or upon the redemption of all of the Trust Securities pursuant to Section
4.02, of all amounts or instruments required to be distributed hereunder upon
the final payment of the Trust Securities; (b) the payment of any expenses owed
by the Trust; and (c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.
<PAGE>
Section 9.04 Liquidation.
(a) If any Early Termination Event specified in clause (ii) of Section
9.02 occurs, the Trust shall be liquidated and the Property Trustee shall
distribute the Junior Subordinated Notes to the Securityholders as provided in
this Section 9.04.
(b) In connection with a distribution of the Junior Subordinated Notes,
each Holder of Trust Securities shall be entitled to receive, after the
satisfaction of liabilities to creditors of the Trust (as evidenced by a
certificate of the Administrative Trustees), a Like Amount of Junior
Subordinated Notes. Notice of liquidation shall be given by the Trustees by
first-class mail, postage prepaid, mailed not later than 30 nor more than 60
days prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Junior Subordinated Notes; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for Junior
Subordinated Notes as the Administrative Trustees or the Property
Trustee shall deem appropriate.
(c) In order to effect the liquidation of the Trust and distribution of
the Junior Subordinated Notes to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be not more than 45
days prior to the Liquidation Date) and, either itself acting as exchange agent
or through the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of Junior
Subordinated Notes in exchange for the Outstanding Trust Securities
Certificates.
(d) After the Liquidation Date, (i) the Trust Securities will no longer
be deemed to be Outstanding, (ii) certificates representing a Like Amount of
Junior Subordinated Notes will be issued to Holders of Trust Securities
Certificates, upon surrender of such certificates to the Administrative Trustees
or their agent for exchange, (iii) any Trust Securities Certificates not so
surrendered for exchange will be deemed to represent a Like Amount of Junior
Subordinated Notes, accruing interest at the rate provided for in the Junior
Subordinated Notes from the last Distribution Date on which a Distribution was
made on such Trust Certificates until such certificates are so surrendered (and
until such certificates are so surrendered, no payments of interest or principal
will be made to Holders of Trust Securities Certificates with respect to such
Junior Subordinated Notes) and (iv) all rights of Securityholders holding Trust
Securities will cease, except the right of such Securityholders to receive
Junior Subordinated Notes upon surrender of Trust Securities Certificates.
(e) The Depositor will use its best efforts to have the Junior
Subordinated Notes that are distributed in exchange for the Capital Securities
to be listed on such securities exchange, if any, as the Capital Securities are
then listed. The Depositor may elect to have the Junior Subordinated Notes
issued in book-entry form to the Clearing Agency or its nominee.
Section 9.05 Bankruptcy. If an Early Termination Event specified in
clause (i) of Section 9.02 has occurred, the Trust shall be liquidated. The
Property Trustee shall distribute the Junior Subordinated Notes to the
Securityholders as provided in Section 9.04, unless such distribution is
determined by the Administrative Trustees not to be practical, in which event
the Holders will be entitled to receive out of the assets of the Trust available
for distribution to Securityholders, after satisfaction of liabilities to
creditors, an amount equal to the Liquidation Amount per Trust Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder
of the Common Securities will be entitled to receive Liquidation Distributions
upon any such dissolution, winding-up or termination pro rata (determined as
aforesaid) with Holders of Capital Securities, except that, if an Indenture
Event of Default has occurred and is continuing, the Capital Securities shall
have a priority over the Common Securities.
ARTICLE X
Miscellaneous Provisions
Section 10.01 Expense Agreement. The Depositor shall cause the
Guarantor, contemporaneously with the execution and delivery of this Trust
Agreement, to execute and deliver the Expense Agreement.
Section 10.02 Limitation of Rights of Securityholders. The death or
incapacity of any Person having an interest, beneficial or otherwise, in a Trust
Security shall not operate to terminate this Trust Agreement, nor entitle the
legal representatives or heirs of such Person or any Securityholder for such
Person, to claim an accounting, take any action or bring any proceeding in and
for a partition or winding up of the arrangements contemplated hereby, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Section 10.03 Amendment.
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, (i) to
cure any ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement, which
shall not be inconsistent with the other provisions of this Trust Agreement,
provided, however, that any such amendment shall not adversely affect in any
material respect the interests of any Securityholder or (ii) to modify,
eliminate or add to any provisions of this Trust Agreement to such extent as
shall be necessary to ensure that the Trust will not be classified as other than
a grantor trust for United States federal income tax purposes at any time that
any Trust Securities are outstanding; provided, however, that, except in the
case of clause (ii), such action shall not adversely affect in any material
respect the interests of any Securityholder and, in the case of clause (i), any
amendments of this Trust Agreement shall become effective when notice thereof is
given to the Securityholders.
(b) Except as provided in Section 10.03(c) hereof, any provision in
this Trust Agreement may be amended by the Trust or the Trustees with (i) the
consent of Trust Securityholders representing not less than 66-2/3% (based upon
Liquidation Amounts) of the Trust Securities then Outstanding and (ii) receipt
by the Trustees of an Opinion of Counsel to the effect that such amendment or
the exercise of any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for United
States federal income tax purposes or the Trust's exemption from status of an
"investment company" under the Investment Company Act of 1940, as amended.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.03 or 6.06 hereof), this
Trust Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date, or (iii) change
the consent required pursuant to Section 10.03.
(d) Notwithstanding any other provisions of this Trust Agreement, the
Trustees shall not enter into or consent to any amendment to this Trust
Agreement which would cause the Trust to fail or cease to qualify for the
exemption from status of an "investment company" under the Investment Company
Act of 1940, as amended, afforded by Rule 3a-5 thereunder.
(e) Without the consent of the Depositor, this Trust Agreement may not
be amended in a manner which imposes any additional obligation on the Depositor.
In executing any amendment permitted by this Trust Agreement, the Trustees shall
be entitled to receive, and (subject to Section 8.01) shall be fully protected
in relying upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Trust Agreement. Any Trustee may,
but shall not be obligated to, enter into any such amendment which affects such
Trustee's own rights, duties, immunities or liabilities under this Trust
Agreement or otherwise.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
Section 10.04 Separability. In case any provision in this Trust
Agreement or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 10.05 Governing Law. THIS TRUST AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH
RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE;
PROVIDED THAT THE IMMUNITIES AND STANDARD OF CARE OF THE PROPERTY TRUSTEE SHALL
BE GOVERNED BY NEW YORK LAW.
Section 10.06 Successors. This Trust Agreement shall be binding upon
and shall inure to the benefit of any successor to both the Trust and the
Trustees, including any successor by operation of law.
Section 10.07 Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.
Section 10.08 Notice and Demand. Any notice, demand or other
communication which by any provision of this Trust Agreement is required or
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, first-class postage
prepaid, in the United States mail, hand delivery or facsimile transmission, in
each case, addressed, (i) in the case of a Capital Securityholder, to such
Capital Securityholder as such Securityholder's name and address appear on the
Securities Register and (ii) in the case of the Common Securityholder or the
Depositor, to Southern Company Capital Funding, Inc., c/o The Southern Company,
270 Peachtree Street, N.W., Atlanta, Georgia 30303, Attention: Secretary,
Facsimile No. (404) 506-0808, with a copy to Southern Company Services, Inc.,
270 Peachtree Street, N.W., Suite 2000, Atlanta, Georgia 30303, Attention:
Corporate Finance Department, Facsimile No. (404) 506-0674. Such notice, demand
or other communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust or the Trustees shall be given in writing addressed (until another
address is published by the Trust) as follows: (i) with respect to the Property
Trustee and the Delaware Trustee, Bankers Trust Company, Four Albany Street, New
York, New York, 10006, Attention: Corporate Trust and Agency Group, Manager
Public Utilities Group; Bankers Trust (Delaware), 1001 Jefferson Street, Suite
550, Wilmington, Delaware 19801-1457, Attention: Lisa Wilkins, as the case may
be; and (ii) with respect to the Administrative Trustees, to them at the address
above for notices to the Depositor, marked Attention: Administrative Trustees of
Southern Company Capital Trust I c/o Secretary. Such notice, demand or other
communication to or upon the Trust or the Trustees shall be deemed to have been
sufficiently given or made only upon actual receipt of the writing by the
applicable Trustee.
Section 10.09 Agreement Not to Petition. Each of the Trustees and the
Depositor agrees for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
IX, it shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, reorganization, arrangement, insolvency, liquidation or
other similar law (including, without limitation, the United States Bankruptcy
Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of
any proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.09, the Property Trustee
agrees, for the benefit of Securityholders, that it shall file an answer with
the bankruptcy court or otherwise properly contest the filing of such petition
by the Depositor against the Trust or the commencement of such action and raise
the defense that the Depositor has agreed in writing not to take such action and
should be stopped and precluded therefrom and such other defenses, if any, as
counsel for the Trustees or the Trust may assert. The provisions of this Section
10.09 shall survive the termination of this Trust Agreement.
Section 10.10 Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trustee Agreement and shall,
to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON
BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT
TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE
SUBORDINATED INDENTURE AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND
SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Trust
Agreement or have caused this Trust Agreement to be executed on their behalf,
all as of the day and year first above written.
SOUTHERN COMPANY CAPITAL
FUNDING, INC.,
as Depositor
By:
Title:
BANKERS TRUST COMPANY,
as Property Trustee
By:
Title:
BANKERS TRUST (DELAWARE),
as Delaware Trustee
By:
Title:
Wayne Boston,
as Administrative Trustee
Richard A. Childs,
as Administrative Trustee
<PAGE>
[EXHIBITS A AND B ARE INTENTIONALLY RESERVED]
<PAGE>
EXHIBIT C - PAGE 2
EXHIBIT C - PAGE 1
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST AGREEMENT
REFERRED TO HEREIN
Certificate Number Number of Common Securities
C-1 ________
Certificate Evidencing Common Securities
of
Southern Company Capital Trust I
Common Securities
(liquidation amount $1,000 per Common Security)
Southern Company Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Southern Company Capital Funding, Inc. (the "Holder") is the registered owner of
_____________ (_______) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust and designated the Common
Securities (liquidation amount $1,000 per Common Security) (the "Common
Securities"). In accordance with Section 5.10 of the Trust Agreement (as defined
below) the Common Securities are not transferable, except by operation of law,
and any attempted transfer hereof shall be void. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of February 1, 1997, as the same may be amended from time to time
(the "Trust Agreement"), including the designation of the terms of the Common
Securities as set forth therein. The Trust will furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, the Administrative Trustees of the Trust have
executed this certificate this ____ day of ________, 19__.
Southern Company Capital Trust I
By:
Wayne Boston,
as Administrative Trustee
By:
Richard A. Childs,
as Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the
within-mentioned Trust Agreement.
as Administrative Trustee
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
THIS AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement") is
made as of February 1,1997, between The Southern Company, a Delaware corporation
(the "Company"), and Southern Company Capital Trust I, a Delaware business trust
(the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Junior Subordinated Notes from Southern Company
Capital Funding, Inc., a Delaware corporation and an indirect, wholly-owned
subsidiary of the Company, and to issue and sell Southern Company Capital Trust
I 8.19% Capital Securities (the "Capital Securities") with such powers,
preferences and special rights and restrictions as are set forth in the Amended
and Restated Trust Agreement of the Trust dated as of February 1, 1997 as the
same may be amended from time to time (the "Trust Agreement"); and
WHEREAS, the Company is the guarantor of the Junior Subordinated Notes.
NOW, THEREFORE, in consideration of the purchase by each holder of the
Capital Securities, which purchase the Company hereby agrees shall benefit the
Company and which purchase the Company acknowledges will be made in reliance
upon the execution and delivery of this Agreement, the Company and the Trust
hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by the Company. Subject to the terms and
conditions hereof, the Company hereby irrevocably and unconditionally guarantees
to each person or entity to whom the Trust is now or hereafter becomes indebted
or liable (the "Beneficiaries") the full payment, when and as due, of any and
all Obligations (as hereinafter defined) to such Beneficiaries. As used herein,
"Obligations" means any indebtedness, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to holders of any Capital Securities
or other similar interests in the Trust the amounts due such holders pursuant to
the terms of the Capital Securities or such other similar interests, as the case
may be. This Agreement is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall terminate and be
of no further force and effect upon the date on which there are no Beneficiaries
remaining; provided, however, that this Agreement shall continue to be effective
or shall be reinstated, as the case may be, if at any time any holder of Capital
Securities or any Beneficiary must restore payment of any sums paid under the
Capital Securities, under any Obligation, under the Capital Securities Guarantee
Agreement dated the date hereof by the Company and Bankers Trust Company, as
guarantee trustee, or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. The Company hereby waives notice of
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and the Company hereby waives presentment, demand for payment, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
Section 1.04. No Impairment. The obligations, covenants, agreements and
duties of the Company under this Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or
any portion of the Obligations or for the performance of any other
obligation under, arising out of, or in connection with, the
Obligations;
(b) any failure, omission, delay or lack of diligence on the
part of the Beneficiaries to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Beneficiaries with respect
to the Obligations or any action on the part of the Trust granting
indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Trust or any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Company with respect to the happening of any of the
foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this Agreement
directly against the Company and the Company waives any right or remedy to
require that any action be brought against the Trust or any other person or
entity before proceeding against the Company.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements contained in
this Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the
Beneficiaries.
Section 2.02. Amendment. So long as there remains any Beneficiary or any
Capital Securities of any series are outstanding, this Agreement shall not be
modified or amended in any manner adverse to such Beneficiary or to the holders
of the Capital Securities.
Section 2.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), telex or by registered or certified mail, addressed as
follows (and if so given, shall be deemed given when mailed or upon receipt of
an answer-back, if sent by telex), to-wit:
Southern Company Capital Trust I
c/o Bankers Trust Company
Four Albany Street
New York, New York 10006
Facsimile No.: (212) 250-6725
Attention: Corporate Trust and Agency Group
Manager Public Utilities Group
The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Facsimile No.: (404) 506-0808
Attention: Secretary
Section 2.04. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.
<PAGE>
THIS AGREEMENT is executed as of the date and year first above written.
THE SOUTHERN COMPANY
By:
SOUTHERN COMPANY CAPITAL TRUST I
By:
Wayne Boston, as
Administrative Trustee
<PAGE>
EXHIBIT E
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Southern
Company Capital Trust I or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of DTC (and
any payment made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), any transfer, pledge, or other use hereof for
value or otherwise by or to any person is wrongful inasmuch as the registered
owner thereof, Cede & Co., has an interest herein.
[IF THIS SECURITY IS A RESTRICTED CAPITAL SECURITY, INSERT: THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON WHICH THE SOUTHERN COMPANY ("SOUTHERN"), SOUTHERN COMPANY CAPITAL FUNDING,
INC. ("CAPITAL") OR ANY AFFILIATE OF SOUTHERN OR CAPITAL WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO SOUTHERN OR CAPITAL, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO SOUTHERN'S, CAPITAL'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSES (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, (ii) PURSUANT TO CLAUSE (E) TO REQUIRE
THAT THE TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE
SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM DATED JANUARY
29, 1997, AND (iii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT
TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY OR ANY INTEREST
THEREIN UNLESS THE TRANSFEROR DELIVERS TO THE TRANSFER AGENT A REPRESENTATION
FROM THE TRANSFEREE THAT IT EITHER IS (I) NOT A PENSION, PROFIT-SHARING OR OTHER
EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (COLLECTIVELY, "PLANS"), AND IS NOT PURCHASING THE CAPITAL
SECURITIES (OR INTEREST THEREIN) ON BEHALF OR WITH THE ASSETS OF ANY PLAN OR
(II) ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PROHIBITED TRANSACTION
CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO ITS PURCHASE
AND HOLDING OF THE CAPITAL SECURITIES (OR INTEREST THEREIN). SUCH HOLDER FURTHER
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
Certificate Number Number of Capital Securities
---------
P-1 CUSIP NO. _____ _______
Certificate Evidencing Capital Securities
of
Southern Company Capital Trust I
8.19% Capital Securities
(Liquidation amount $1,000 per Capital Security)
Southern Company Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Cede & Co. (the "Holder") is the registered owner of _____ MILLION (_______)
capital securities of the Trust representing undivided beneficial interests in
the assets of the Trust and designated the Southern Company Capital Trust I
8.19% Capital Securities (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). The Capital Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer as provided in
Section 5.04 of the Trust Agreement (as defined below). The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Capital Securities are set forth in, and this certificate and the Capital
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust, dated as of February 1, 1997, as the same may be amended from time to
time (the "Trust Agreement"), including the designation of the terms of Capital
Securities as set forth therein. The holder of this certificate is entitled to
the benefits of a guarantee by The Southern Company, a Delaware corporation (the
"Company"), pursuant to a Capital Securities Guarantee Agreement between the
Company and Bankers Trust Company, as guarantee trustee, dated as of February 1,
1997, as the same may be amended from time to time (the "Guarantee"), to the
extent provided therein. The Trust will furnish a copy of the Trust Agreement
and the Guarantee to the holder of this certificate without charge upon written
request to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the holder of this certificate is
bound by the Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Administrative Trustees of the Trust have
executed this certificate this ____ day of ________, 19__.
SOUTHERN COMPANY CAPITAL TRUST I
By:
Wayne Boston,
as Administrative Trustee
By:
Richard A. Childs,
as Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Trust Agreement.
as Administrative Trustee
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Capital Securities Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Capital Securities
Certificate)
<PAGE>
[Include the following if the Capital Security bears a Restricted Capital
Securities Legend --
In connection with any transfer of any of the Capital Securities evidenced by
this certificate, the undersigned confirms that such Capital Securities are
being:
CHECK ONE BOX BELOW
(1) |_| exchanged for the undersigned's own account without transfer; or
(2) |_| transferred pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) |_| transferred pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(4) |_| transferred to an institutional "accredited
investor" within the meaning of subparagraph (a)(1),
(2) or (3) or (7) of Rule 501 under the Securities
Act of 1933 that is acquiring the Capital Securities
for its own account, or for the account of such an
institutional "accredited investor," for investment
purposes and not with a view to, or for offer or sale
in connection with, any distribution in violation of
the Securities Act of 1933; or
(5) |_| transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(6) |_| transferred pursuant to an effective registration statement.
Unless one of the boxes is checked, the Exchange Agent will refuse to register
any of the Capital Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if box
(3), (4) or (5) is checked, the Registrar may require, prior to registering any
such transfer of the Capital Securities, such legal opinions, certifications and
other information as the Trust has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such as
the exemption provided by Rule 144 under such Act; provided, further, that (i)
if box (2) is checked, the transferee must also certify that it is a qualified
institutional buyer as defined in Rule 144A or (ii) if box (4) is checked, the
transferee must also provide to the Registrar a Transferee Letter of
Representation in the form attached to the Offering Memorandum dated January 29,
1997; provided, further, that after the date that a Registration Statement has
been filed and so long as such Registration Statement continues to be effective,
the Registrar may only permit transfers for which box (6) has been checked.
Signature
<PAGE>
SCHEDULE A*
The initial aggregate liquidation amount of Capital Securities evidenced by
the Certificate to which this Schedule is attached is $__________ (equivalent to
________ Capital Securities). The notations on the following table evidence
decreases and increases in the number of Capital Securities evidenced by such
Certificate.
Decrease in Increase in Liquidation Amount of Notation by
Liquidation Liquidation Capital Securities Registration
Amount of Amount of Remaining After Such
Capital Capital Decrease or Increase
Securities Securities
* Append to Global Capital Securities only.
Exhibit 4.8
EXCHANGE CAPITAL SECURITIES GUARANTEE AGREEMENT
Between
The Southern Company
(as Guarantor)
and
Bankers Trust Company
(as Trustee)
dated as of
_____________, 1997
<PAGE>
CROSS-REFERENCE TABLE1
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
310(a)...........................................................4.01(a)
310(b).....................................................4.01(c), 2.08
310(c)......................................................Inapplicable
311(a)...........................................................2.02(b)
311(b)...........................................................2.02(b)
311(c)......................................................Inapplicable
312(a)...........................................................2.02(a)
312(b)...........................................................2.02(b)
313.................................................................2.03
314(a)..............................................................2.04
314(b)......................................................Inapplicable
314(c)..............................................................2.05
314(d)......................................................Inapplicable
314(e)..................................................1.01, 2.05, 3.02
314(f)........................................................2.01, 3.02
315(a)...........................................................3.01(d)
315(b)..............................................................2.07
315(c)..............................................................3.01
315(d)...........................................................3.01(d)
315(e)......................................................Inapplicable
316(a).....................................................5.04(i), 2.06
316(b)..............................................................5.03
316(c)..............................................................2.02
317(a)......................................................Inapplicable
317(b)......................................................Inapplicable
318(a)...........................................................2.01(b)
318(b)..............................................................2.01
318(c)...........................................................2.01(a)
1This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I..............................................................1
SECTION 1.01. Definitions..............................................1
ARTICLE II.............................................................4
SECTION 2.01. Trust Indenture Act; Application.........................4
SECTION 2.02. Lists of Holders of Securities...........................4
SECTION 2.03. Reports by the Trustee...................................4
SECTION 2.04. Periodic Reports to Trustee..............................5
SECTION 2.05. Evidence of Compliance with Conditions Precedent.........5
SECTION 2.06. Events of Default; Waiver................................5
SECTION 2.07. Event of Default; Notice.................................5
SECTION 2.08. Conflicting Interests....................................5
ARTICLE III............................................................6
SECTION 3.01. Powers and Duties of the Trustee.........................6
SECTION 3.02. Certain Rights of Trustee................................7
SECTION 3.03. Compensation; Fees; Indemnity............................9
ARTICLE IV.............................................................9
SECTION 4.01. Trustee; Eligibility.....................................9
SECTION 4.02. Appointment, Removal and Resignation of Trustee.........10
ARTICLE V.............................................................11
SECTION 5.01. Guarantee...............................................11
SECTION 5.02. Waiver of Notice and Demand.............................11
SECTION 5.03. Obligations Not Affected................................11
SECTION 5.04. Rights of Holders.......................................12
SECTION 5.05. Guarantee of Payment....................................12
SECTION 5.06. Subrogation.............................................12
SECTION 5.07. Independent Obligations.................................13
ARTICLE VI............................................................13
SECTION 6.01. Subordination...........................................13
ARTICLE VII...........................................................13
SECTION 7.01. Termination.............................................13
ARTICLE VIII..........................................................14
SECTION 8.01. Successors and Assigns..................................14
SECTION 8.02. Amendments..............................................14
SECTION 8.03. Notices.................................................14
SECTION 8.04. Benefit.................................................15
SECTION 8.05. Interpretation..........................................15
SECTION 8.06. Governing Law...........................................16
<PAGE>
EXCHANGE CAPITAL SECURITIES GUARANTEE AGREEMENT
This EXCHANGE CAPITAL SECURITIES GUARANTEE AGREEMENT ("Guarantee
Agreement"), dated as of ______________, 1997, between THE SOUTHERN COMPANY, a
Delaware corporation (the "Guarantor"), and BANKERS TRUST COMPANY, a New York
banking corporation, as trustee (the "Trustee"), for the benefit of the Holders
(as defined herein) from time to time of the Capital Securities (as defined
herein) of SOUTHERN COMPANY CAPITAL TRUST I, a Delaware statutory business trust
(the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of February 1, 1997, among the Trustee, the other
Trustees named therein, Southern Company Capital Funding, Inc., a Delaware
corporation (the "Company"), as Depositor, and the holders of undivided
beneficial interests in the assets of the Trust, the Trust is issuing as of
______________, 1997 $325,000,000 aggregate liquidation amount of its 8.19%
Exchange Capital Securities (the "Capital Securities") representing preferred
undivided beneficial interests in the assets of the Trust and having the terms
set forth in the Trust Agreement;
WHEREAS, as incentive for the Holders to exchange their Original
Capital Securities (as defined below) for the Capital Securities, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in
this Guarantee Agreement, to pay to the Holders the Guarantee Payments (as
defined below). The Guarantor agrees to make certain other payments on the terms
and conditions set forth herein; and
WHEREAS, the Guarantor has executed and delivered a guarantee agreement
with substantially identical terms to this Guarantee Agreement, for the benefit
of the holders of the Original Capital Securities (as defined herein) (the
"Original Guarantee Agreement ").
NOW, THEREFORE, in consideration of the payment for Capital Securities
by each Holder (as defined herein) thereof, which payment the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time of the
Capital Securities.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Trust.
"Event of Default" means a failure by the Guarantor to perform any of
its payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by or on behalf of the Trust: (i) any accrued and
unpaid distributions that are required to be paid on such Capital Securities but
if and only if and to the extent the Trust has funds legally and immediately
available therefor to make such payment; (ii) the redemption price, including
all accrued and unpaid distributions to the date of redemption (the "Redemption
Price"), with respect to the Capital Securities called for redemption by the
Trust but if and only if and to the extent that the Trust has funds legally and
immediately available therefor sufficient to make such payment; and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Junior Subordinated Notes to
the holders of Trust Securities or the redemption of all of the Capital
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Capital Securities to the date of
payment, to the extent the Trust has funds legally and immediately available
therefor, and (b) the amount of assets of the Trust remaining available for
distribution to Holders in liquidation of the Trust (in either case, the
"Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Capital Securities; provided, however, that in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Company or any Affiliate of the Guarantor or the Company.
"Indenture" means the Subordinated Note Indenture dated as of February
1, 1997, among the Company, as Subordinated Note Issuer, the Guarantor, as
guarantor, and Bankers Trust Company, as trustee, as supplemented by the First
Supplemental Indenture dated as of February 4, 1997, by and among the Company,
the Guarantor and Bankers Trust Company, as trustee.
"Majority in liquidation amount of Capital Securities" means a vote by
Holder(s) of Capital Securities, voting separately as a class, of more than 50%
of the liquidation amount of all Capital Securities outstanding at the time of
determination.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Guarantor, and
delivered to the Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Original Capital Securities" means the $325,000,000 aggregate
liquidation amount of 8.19% Capital Securities (liquidation amount $1,000 per
Capital Security) issued by the Trust on February 4, 1997.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Responsible Officer" means, with respect to the Trustee, any managing
director, any vice president, any assistant vice president, any assistant
secretary, any assistant treasurer, or any other officer of the Corporate Trust
and Agency Group of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Successor Trustee" means a successor Trustee possessing the
qualifications to act as Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trustee" means Bankers Trust Company until a Successor Trustee has
been appointed and has accepted such appointment pursuant to the terms of this
Guarantee Agreement and thereafter means each such Successor Trustee.
"Trust Securities" means the Common Securities, the Original Capital
Securities and the Capital Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions; and
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.02. Lists of Holders of Securities.
(a) The Guarantor shall furnish or cause to be furnished to the Trustee
(a) semiannually, not later than June 1 and December 1 in each year, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders ("List of Holders") as of a date not more than 15 days prior to the
time such list is furnished, and (b) at such other times as the Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished; provided that, the Guarantor shall not be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Trustee by the Guarantor or at
any time the Trustee is the Securities Registrar under the Trust Agreement. The
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Trustee. Within 60 days after May 15 of
each year commencing May 15, 1997, the Trustee shall provide to the Holders of
the Capital Securities such reports as are required by Section 313(a) of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Trustee. The Guarantor shall provide
to the Trustee such documents, reports and information as required by Section
314 of the Trust Indenture Act (if any) in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act, and shall provide,
within 120 days after the end of each of its fiscal years, the compliance
certificate required by Section 314(a)(4) of the Trust Indenture Act in the form
and in the manner required by such Section.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Guarantee Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.06. Events of Default; Waiver. The Holders of a Majority in
liquidation amount of Capital Securities may, by vote, on behalf of all of the
Holders, waive any past Event of Default and its consequences. Upon such waiver,
any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.07. Event of Default; Notice.
(a) The Trustee shall, within 90 days after the occurrence of an Event
of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default known to the Trustee, unless such defaults have
been cured before the giving of such notice, provided that the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Trustee shall not be deemed to have knowledge of any Event of
Default unless the Trustee shall have received written notice, or a Responsible
Officer charged with the administration of the Trust Agreement shall have
obtained written notice, of such Event of Default.
SECTION 2.08. Conflicting Interests. The Trust Agreement shall be deemed to
be specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TRUSTEE
SECTION 3.01. Powers and Duties of the Trustee.
(a) This Guarantee Agreement shall be held by the Trustee for the
benefit of the Holders, and the Trustee shall not transfer this Guarantee
Agreement to any Person except the Trustee shall assign rights hereunder to a
Holder to the extent such assignment is necessary to exercise such Holder's
rights pursuant to Section 5.04 or to a Successor Trustee upon acceptance by
such Successor Trustee of its appointment to act as Successor Trustee. The
right, title and interest of the Trustee shall automatically vest in any
Successor Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Trustee.
(b) If an Event of Default has occurred and is continuing, the Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Trustee, before the occurrence of any Event of Default and
after the curing or waiving of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.06), the
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Guarantee Agreement, and the Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee Agreement;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a Majority in liquidation amount
of the Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
SECTION 3.02. Certain Rights of Trustee.
(a) Subject to the provisions of Section 3.01:
(i) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
rely upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor;
(iv) the Trustee may consult with counsel of its choice, and
the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion; such counsel may be counsel
to the Guarantor or any of its Affiliates and may include any of its
employees; the Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction;
(v) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have
provided to the Trustee reasonable security and indemnity satisfactory
to the Trustee against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as
may be requested by the Trustee; provided that nothing contained in
this Section 3.02(a)(v) shall be taken to relieve the Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee Agreement;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(viii) whenever in the administration of this Guarantee
Agreement the Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Trustee (i) may request instructions from the
Holders, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the Trustee shall be construed to be a duty.
SECTION 3.03. Compensation; Fees; Indemnity.
The Guarantor agrees:
(a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by the Trustee hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Guarantee Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold the Trustee harmless
against, any and all loss, damage, claims, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this Guarantee Agreement, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
The provisions of this Section 3.03 shall survive the termination of this
Guarantee Agreement.
ARTICLE IV
TRUSTEE
SECTION 4.01. Trustee; Eligibility.
(a) There shall at all times be a Trustee which shall:
(i) not be an Affiliate of the Guarantor or the Company; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for the
purposes of this Section 4.01(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Trustee shall cease to be eligible to so act
under Section 4.01(a), the Trustee shall immediately resign in the manner and
with the effect set out in Section 4.02(c).
(c) If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the rights of the Trustee under the
penultimate paragraph thereof.
SECTION 4.02. Appointment, Removal and Resignation of Trustee.
(a) Subject to Section 4.02(b), the Trustee may be appointed or removed
without cause at any time by the Guarantor.
(b) The Trustee shall not be removed until a Successor Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Trustee and delivered to the Guarantor.
(c) The Trustee appointed to office shall hold office until a Successor
Trustee shall have been appointed or until its removal or resignation. The
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing executed by the Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Trustee and delivered to the Guarantor and the
resigning Trustee.
(d) If no Successor Trustee shall have been appointed and accepted
appointment as provided in this Section 4.02 within 60 days after delivery to
the Guarantor of an instrument of resignation, the resigning Trustee may
petition any court of competent jurisdiction for appointment of a Successor
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Guarantor
may have or assert against any Person. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Trust to pay such amounts to the
Holders.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Trust or any other Person before proceeding against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligation of the Guarantor to
make the Guarantee Payments under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Capital Securities to be performed
or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Capital Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with, the Capital Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Junior Subordinated Notes permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Capital Securities, or any
action on the part of the Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Capital Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Trustee to be held
for the benefit of the Holders; (ii) the Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Trustee under this Guarantee Agreement, provided that such
direction shall not be in conflict with any rule of law or with this Guarantee
Agreement, and could not involve the Trustee in personal liability in
circumstances where reasonable indemnity would not be adequate; and (iv) any
Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against or requesting or directing that action be taken by the
Trustee or any other Person; it being understood and intended that no one or
more of such Holders shall have any right in any manner whatsoever by virtue of,
or by availing of, any provision of this Guarantee Agreement to affect, disturb
or prejudice the rights of any other of such Holders or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Guarantee Agreement, except in the manner herein provided and
for the equal and ratable benefit of all of such Holders.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication) or upon the distribution of Junior Subordinated Notes (as defined
in the Trust Agreement) to the Holders in exchange for all of the Capital
Securities.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Trust in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Trust with
respect to the Capital Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.01. Subordination. This Guarantee Agreement will constitute
an unsecured obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the Guarantor, including
the Junior Subordinated Notes, except those obligations or liabilities made pari
passu or subordinate by their terms, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference securities of any Affiliate of the Guarantor, and (iii)
senior to all common stock of the Guarantor.
ARTICLE VII
TERMINATION
SECTION 7.01. Termination. This Guarantee Agreement shall terminate and
be of no further force and effect upon: (i) full payment of the Redemption Price
of all Capital Securities, (ii) the distribution of Junior Subordinated Notes to
the Holders in exchange for all of the Capital Securities, or (iii) full payment
of the amounts payable in accordance with the Trust Agreement upon liquidation
of the Trust. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid with respect to Capital
Securities or under this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Capital Securities then outstanding. Except in
connection with a consolidation, merger, conveyance, transfer, or lease
involving the Guarantor that is permitted under Article Eight of the Indenture,
the Guarantor shall not assign its obligations hereunder.
SECTION 8.02. Amendments. Except with respect to any changes which do
not materially and adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Holders of not less than 66-2/3% in
liquidation amount of all the outstanding Capital Securities. The provisions of
Article Six of the Trust Agreement concerning meetings of Holders shall apply to
the giving of such approval.
SECTION 8.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Trustee and the
Holders:
The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Facsimile No.: (404) 506-0808
Attn: Secretary
with copy to:
Southern Company Services, Inc.
270 Peachtree Street, N.W., Suite 2000
Atlanta, Georgia 30303
Facsimile No.: (404) 506-0674
Attention: Corporate Finance Department
(b) if given to the Trust, in care of the Trustee, or to the Trustee at
the Trust's (and the Trustee's) address set forth below or such other address as
the Trustee on behalf of the Trust may give notice to the Holders:
Southern Company Capital Trust I
c/o Bankers Trust Company
Four Albany Street
New York, New York 10006
Attn: Corporate Trust and Agency Group
Manager Public Utilities Group
with a copy, in the case of a notice to the Trust (other than a notice from
the Guarantor), to the Guarantor;
(c) if given to any Holder, at the address set forth on the books and
records of the Trust.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 8.04. Benefit. This Guarantee Agreement is solely for the benefit
of the Holders and, subject to Section 3.01(a), is not separately transferable
from the Capital Securities.
SECTION 8.05. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are
to Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
SECTION 8.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK. THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
ANY COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY
WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN
ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER, OR THAT THIS GUARANTEE AGREEMENT OR ANY DOCUMENT OR ANY
INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED
IN OR BY SUCH COURTS. THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE
UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN
THIS GUARANTEE AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
THE SOUTHERN COMPANY
By:
Name: W.L. Westbrook
Title: Financial Vice President
BANKERS TRUST COMPANY
By:
Name:
Title:
Exhibit 4.9
- -------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of February 1, 1997
among
THE SOUTHERN COMPANY
SOUTHERN CAPITAL FUNDING, INC.
SOUTHERN COMPANY CAPITAL TRUST I
and
LEHMAN BROTHERS INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SALOMON BROTHERS INC
J.P. MORGAN SECURITIES INC.
as Initial Purchasers
- -------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of February 1, 1997 among THE SOUTHERN COMPANY, a Delaware
corporation (the "Company") SOUTHERN COMPANY CAPITAL FUNDING, INC., a Delaware
corporation ("Capital"), SOUTHERN COMPANY CAPITAL TRUST I, a statutory business
trust formed under the laws of the State of Delaware (the "Trust"), and LEHMAN
BROTHERS INC. ("Lehman Brothers") GOLDMAN, SACHS & CO., MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, J.P. MORGAN SECURITIES INC. and SALOMON BROTHERS,
INC (collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement
dated January 29, 1997 (the "Purchase Agreement"), among Capital, as issuer of
the 8.19% Junior Subordinated Deferrable Interest Notes due February 1, 2037
(the "Subordinated Notes"), the Company, the Trust and the Initial Purchasers,
which provides for among other things, the sale by the Trust to the Initial
Purchasers of $325,000,000 of the Trust's 8.19% Capital Securities, liquidation
amount of $1,000 per Capital Security (the "Capital Securities") the proceeds of
which will be used by the Trust to purchase Subordinated Notes. The Capital
Securities, together with the Subordinated Notes and the Company's guarantee of
the Capital Securities (the "Capital Securities Guarantee") and the Company's
guarantee of the Subordinated Notes (the "Notes Guarantee") are collectively
referred to as the "Securities." In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company and the Trust have agreed to
provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Additional Distribution" shall have the meaning set forth in Section 2(e)
hereof.
"Additional Interest" shall have the meaning set forth in Section 2(e)
hereof.
"Advice" shall have the meaning set forth in the last paragraph of Section
3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(t)
hereof.
"Business Day" shall mean a day other than (i) a Saturday or a Sunday, (ii)
a day on which banks in New York, New York are authorized or obligated by law
<PAGE>
or executive order to remain closed or (iii) a day on which the Indenture
Trustee's Corporate Trust Office or Property Trustee's principal corporate trust
office is closed for business.
"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Trust; provided however, that such depositary must
have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in Section 2(b)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Exchange Offer" shall mean the offer by the Company and the Trust to the
Holders to exchange all of the Registrable Securities (other than Private
Exchange Securities) for a like principal amount of Exchange Securities pursuant
to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the Subordinated
Notes, the 8.19% Junior Subordinated Deferrable Interest Notes due February 1,
2037 (the "Exchange Notes") containing terms identical to the Subordinated Notes
(except that they will not contain terms with respect to the transfer
restrictions under the Securities Act, will not require transfers thereof to be
in minimum blocks of $100,000 principal amount and will not provide for any
increase in the interest rate thereon), (ii) with respect to the Capital
Securities, the Trust's 8.19% Capital Securities, liquidation amount $1,000 per
Capital Security (the "Exchange Capital Securities") which will have terms
identical to the Capital Securities (except that they will not contain terms
with respect to transfer restrictions under the Securities Act, will not require
transfers thereof to be in minimum blocks of $100,000 principal amount and will
not provide for any increase in the distribution rate thereon), (iii) with
respect to the Capital Securities Guarantee, the Company's guarantee (the
"Exchange Capital Securities Guarantee") of the Exchange
2
<PAGE>
Capital Securities which will have terms identical to the Capital Securities
Guarantee and (iv) with respect to the Notes Guarantee, the Company's Guarantee
(the "Exchange Notes Guarantee") of the Exchange Notes which will have terms
identical to the Notes Guarantee.
"Holder" shall mean the Initial Purchasers, for so long as
they own any Registrable Securities, and each of its respective successors,
assigns and direct and indirect transferees who become registered owners of
Registrable Securities under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the
Subordinated Notes and the Exchange Notes dated as of February 1, 1997 among the
Company, Capital and Bankers Trust Company, as the Indenture Trustee, as the
same may be amended from time to time in accordance with the terms thereof.
"Inspectors" shall have the meaning set forth in Section 3(n) hereof.
"Issue Date" shall mean the date of original issuance of the Securities.
"Majority Holders" shall mean the Holders of a majority of the
aggregate liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth
in Section 3(t) hereof.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, limited liability company, or a government
or agency or political subdivision thereof.
"Property Trustee" shall mean Bankers Trust Company, or any
successor thereto, as property trustee under the Trust Agreement.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(n)
hereof.
3
<PAGE>
"Registration Default" shall have the meaning set forth in
Section 2(e) hereof.
"Registrable Securities" shall mean the Securities; provided,
however, that Securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Securities for the exchange thereof,
shall have been declared effective under the Securities Act and such Securities
shall have been disposed of pursuant to such Registration Statement, (ii) such
Securities shall have been sold to the public pursuant to Rule 144(k) (or any
similar provision then in force, but not Rule 144A) under the Securities Act,
(iii) such Securities shall have ceased to be outstanding or (iv) such
Securities have been exchanged from Exchange Securities upon consummation of the
Exchange Offer and are thereafter freely tradable by the holder thereof (other
than an affiliate of the Company).
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this Agreement,
including without limitation: (i) all SEC or National Association of Securities
Dealers, Inc. (the "NASD") registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) and compliance with the rules of
the NASD in the amount not exceeding $15,000 in the aggregate, (iii) all
expenses of any Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus and any
amendments or supplements thereto, and in preparing or assisting in preparing,
printing and distributing any Registration Statement, any Prospectus and any
amendments or supplements thereto, and in preparing or assisting in preparing,
printing and distributing any underwriting agreements, securities sales
agreements and other documents relating to the performance of and compliance
with this Agreement, (iv) all rating agency fees, (v) the fees and disbursements
of counsel for the Company and of the independent certified public accountants
of the Company, including the expenses of any "cold comfort" letters required by
or incident to such performance and compliance, (vi) the fees and expenses of
the Trustees, and any exchange agent or custodian, (vii) all fees and expenses
incurred in connection with the listing, if any, of any of the Registrable
Securities on any securities exchange or exchanges, and (viii) the reasonable
fees and expenses of any special experts retained by the Company in connection
with Registration Statement.
"Registration Statement" shall mean any registration statement
of the Company and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
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"Rule 144(k) Period" shall mean the period of three years (or
such shorter period as may hereafter be provided in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in
Section 2(b) hereof.
"Shelf Registration Event Date" shall have the meaning set
forth in Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company and the Trust pursuant to the provisions
of Section 2(b) hereof which covers all of the Registrable Securities, on an
appropriate form under Rule 415 under the Securities Act, or any similar rule
that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"TIA" shall have the meaning set forth in Section 3(1) hereof.
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement, dated as of February 1, 1997, by the trustees named therein and the
Company as sponsor.
"Trustees" shall mean any and all trustees with respect to (i)
the Capital Securities under the Trust Agreement, (ii) the Subordinated Notes
and the Notes Guarantee under the Indenture and (iii) the Capital Securities
Guarantee.
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by any
applicable law or applicable interpretation of the staff of the SEC, the
Company, Capital and the Trust shall, for the benefit of the Holders, at the
Company's cost, use its reasonable best efforts to (i) cause to be filed with
the SEC within 150 days after the Issue Date an Exchange Offer Registration
Statement on an appropriate form under the Securities Act covering the Exchange
Offer, (ii) cause such Exchange Offer Registration Statement to be declared
effective under the Securities Act by the SEC not later than the date which
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is 180 days after the Issue Date, and (iii) keep such Exchange Offer
Registration Statement effective for not less than 30 calendar days (or longer
if required by applicable law) after the date notice of the Exchange Offer is
mailed to the Holders. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company and the Trust shall promptly commence the Exchange Offer,
it being the objective of such Exchange Offer to enable each Holder eligible and
electing to exchange Registrable Securities for a like principal amount of
Exchange Notes or a like liquidation amount of Exchange Capital Securities,
together with the Exchange Guarantee and the Notes Guarantee, as applicable
(assuming that such Holder is not an affiliate of the Company within the meaning
of Rule 405 under the Securities Act and is not a broker-dealer tendering
Registrable Securities acquired directly from the Company for its own account,
acquires the Exchange Securities in the ordinary course of such Holder's
business and has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Securities) to transfer such Exchange Securities from and after their receipt
without any limitations or restrictions under the Securities Act and under state
securities or blue sky laws.
In connection with the Exchange Offer, the Company, Capital
and the Trust shall:
(i) mail to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a
period of not less than 30 days after the date notice thereof is mailed
to the Holders (or longer if required by applicable law) (such period
referred to herein as the "Exchange Period");
(iii) utilize the services of the Depositary for the
Exchange Offer;
(iv) permit Holders to withdraw tendered Securities at
any time prior to the close of business, New York time, on the last
Business Day of the Exchange Period, by sending to the institution
specified in the notice, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of
Securities delivered for exchange, and a statement that such Holder is
withdrawing his election to have such Securities exchanged;
(v) notify each Holder that any Security not tendered
by such Holder in the Exchange Offer will remain outstanding and
continue to accrue interest or accumulate distributions, as the case
may be, but will not retain any rights under this Agreement (except in
the case of the Initial Purchasers and Participating Broker-Dealers as
provided herein); and
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(vi) otherwise comply in all respects with all applicable
laws relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer,
the Company, Capital and the Trust, as the case requires, shall:
(i) accept for exchange all Securities or
portions thereof tendered and not validly withdrawn pursuant to the
Exchange Offer;
(ii) deliver, or cause to be delivered, to the
applicable Trustee for cancellation all Securities or portions
thereof so accepted for exchange by the Company; and
(iii) issue, and cause the applicable Trustee under the
Indenture, the Declaration or the Guarantee, as applicable, to promptly
authenticate and deliver to each Holder, new Exchange Securities equal
in principal amount to the principal amount of the Subordinated Notes
or equal in liquidation amount of the liquidation amount of the Capital
Securities as are surrendered by such Holder.
Distributions on each Exchange Capital Security and interest
on each Exchange Debenture issued pursuant to the Registered Exchange Offer will
accrue from the last date on which a Distribution or interest was paid on the
Capital Security or the Subordinated Debenture surrendered in exchange therefor
or, if no Distribution or interest has been paid on such Capital Security or
Subordinated Debenture, from the Issue Date. To the extent not prohibited by any
law or applicable interpretation of the staff of the SEC, the Company, Capital
and the Trust shall use their reasonable best efforts to complete the Exchange
Offer as provided above, and shall comply with the applicable requirements of
the Securities Act, the Exchange Act and other applicable laws in connection
with the Exchange Offer. The Exchange Offer shall not be subject to any
conditions, other than that the Exchange Offer does not violate applicable law
or any applicable interpretation of the staff of the SEC. Each Holder of
Registrable Securities who wishes to exchange such Registrable Securities for
Exchange Securities in the Exchange Offer will be required to make certain
customary representations in connection therewith, including, in the case of any
Holder of Capital Securities, representations that (i) it is not an affiliate of
the Trust, Capital or the Company, (ii) the Exchange Securities to be received
by it were acquired in the ordinary course of its business and (iii) at the time
of the Exchange Offer, it has no arrangement with any person to participate in
the distribution (within the meaning of the Securities Act) of the Exchange
Capital Securities. Each Holder hereby acknowledges and agrees that any
Participating Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the Exchange
Offer (1) could not under SEC policy as in effect on the date of this Agreement
rely on the position of the SEC enunciated in Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation (available May
13, 1988), as interpreted in the SEC's letter to Shearman & Sterling dated July
2, 1993, and similar no-action letters, and (2) must comply with the
registration and prospectus delivery requirements or the Securities Act in
connection with a secondary
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<PAGE>
resale transaction and that such a secondary resale transaction should be
covered by an effective registration statement containing the selling security
holder information required by Item 507 or 508, as applicable, of Regulation S-K
if the resales are of Exchange Securities obtained by such Holder in exchange
for Securities acquired by such Holder directly from the Trust, Capital or the
Company.
Upon consummation of the Exchange Offer in accordance with
this Section 2(a), the provisions of this Agreement shall continue to apply,
mutatis mutandis, solely with respect to Registrable Securities that are
Exchange Securities held by Participating Broker-Dealers, and the Company and
the Trust shall have no further obligation to register the Registrable
Securities (other than pursuant to Section 2(b)(iii)) pursuant to Section 2(b)
of this Agreement.
(b) Shelf Registration. In the event that (i) the Company and
the Trust are not permitted to effect the Exchange Offer because of any change
in law or in currently prevailing interpretations of the staff of the SEC, (ii)
the Exchange Offer Registration Statement is not declared effective within 180
days of the Issue Date, (iii) upon the request of any Initial Purchaser with
respect to any Registrable Securities held by it, if such Initial Purchaser is
not permitted, in the reasonable opinion of Dewey Ballantine, pursuant to
applicable law or applicable interpretations of the staff of the SEC, to
participate in the Exchange Offer and thereby receive securities that are freely
tradeable without restriction under the Securities Act and applicable blue sky
or state securities laws or (iv) if the Company has received an opinion of
counsel having a recognized national tax practice to the effect that, as a
result of the consummation of the Exchange Offer, there is more than an
insubstantial risk that (A) the Trust could be subject to United States federal
income tax with respect to income received or accrued on the Subordinated Notes
or Exchange Notes, (B) interest payable by the Company on the Subordinated Notes
or Exchange Notes would not be deductible by the Company, in whole or in part,
for United States income tax purposes, or (C) the Trust could be subject to more
than a de minimis amount of other taxes, duties or other governmental charges,
(any of the events specified in (i) - (iv) being a "Shelf Registration Event"
and the date of occurrence thereof, the "Shelf Registration Event Date"), the
Company, Capital and the Trust shall promptly deliver to the holders and the
Property Trustee written notice thereof and, at their cost, use their reasonable
best efforts to cause to be filed as promptly as practicable after such Shelf
Registration Event Date, as the case may be, and, in any event, within 45 days
after such Shelf Registration Event Date (which shall be no earlier than 75 days
after the Closing Time), a Shelf Registration Statement providing for the sale
by the Holders of all of the Registrable Securities, and shall use its
reasonable best efforts to have such Shelf Registration Statement declared
effective by the SEC as soon as practicable; provided, however, that if the
Shelf Registration Event is pursuant to clause (iii) the Company may register
such Registrable Securities together with the Exchange Offer Registration
Statement, filed pursuant to Section 2(a), and the requirements as to timing
applicable thereto. No Holder of Registrable Securities shall be entitled to
include any of its Registrable Securities in any Shelf Registration pursuant to
this Agreement unless and until such Holder agrees in writing to be bound by all
of the provisions of this Agreement applicable to such Holder and furnishes to
the
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<PAGE>
Company, Capital and the Trust in writing, within 15 days after receipt of a
request therefor, such information as the Company, Capital and the Trust may,
after conferring with counsel with regard to information relating to Holders
that would be required by the SEC to be included in such Shelf Registration
Statement or Prospectus included therein, reasonably request for inclusion in
any Shelf Registration Statement or Prospectus included therein. Each Holder as
to which any Shelf Registration is being effected agrees promptly to furnish to
the Company and the Trust all information with respect to such Holder necessary
to make the information previously furnished to the Company by such Holder not
materially misleading.
The Company, Capital and the Trust agree to use their
reasonable best efforts to keep the Shelf Registration Statement continuously
effective for the Rule 144(k) Period (subject to extension pursuant to the last
paragraph of Section 3 hereof) or for such shorter period which will terminate
when all of the Registrable Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement or cease
to be outstanding (the "Effectiveness Period"). The Company, Capital and the
Trust shall not permit any securities other than Registrable Securities to be
included in the Shelf Registration. The Company, Capital and the Trust will, in
the event a Shelf Registration Statement is declared effective, provide to each
Holder a reasonable number of copies of the Prospectus which is a part of the
Shelf Registration Statement, notify each such Holder when the Shelf
Registration has become effective. The Company, Capital and the Trust further
agree, if necessary, to supplement or amend the Shelf Registration Statement, if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the Securities Act or by any other rules and regulations thereunder for shelf
registrations, and the Company, Capital and the Trust agree to furnish to the
Holders of Registrable Securities copies of any such supplement or amendment
promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) or 2(b) hereof.
Except as provided herein, each Holder shall pay all expenses of its counsel,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to the
Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof (or a combination of the two) will not
be deemed to have become effective unless it has been declared effective by the
SEC; provided, however, that if, after it has been declared effective, the
offering of Registerable Securities pursuant to a Shelf Registration Statement
is interfered with by any stop order, injunction or other order or requirement
of the SEC or any other governmental agency or court, such Registration
Statement will be deemed not to have been effective during the period of such
interference, until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume. The Company, Capital and the Trust
will be deemed not to have used their reasonable best efforts to cause the
Exchange Offer
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<PAGE>
Registration Statement or the Shelf Registration Statement, as the case may be,
to become, or to remain, effective during the requisite period if either of them
voluntarily take any action that would result in any such Registration Statement
not being declared effective or in the Holders of Registrable Securities covered
thereby not being able to exchange or offer and sell such Registrable Securities
during that period unless such action is required by applicable law.
(e) Additional Interest and Distributions. In the event that
(i) (A) neither the Exchange Offer Registration Statement nor
a Shelf Registration Statement is filed with the SEC on or prior to the
150th day after the Issue Date or (B) notwithstanding that the Company,
Capital and the Trust have consummated or will consummate an Exchange
Offer, the Company and the Trust are required to file a Shelf
Registration Statement and such Shelf Registration Statement is not
filed on or prior to the date required by Section 2(b) hereof, then
commencing on the day after the applicable required filing date,
additional interest shall accrue on the principal amount of the
Subordinated Notes ("Additional Interest"), and additional
distributions shall accumulate on the liquidation amount of the Capital
Securities ("Additional Distributions"), each at a rate of 0.25% per
annum; or
(ii) (A) neither the Exchange Offer Registration Statement nor
a Shelf Registration Statement is declared effective by the SEC on or
prior to the 30th day after the applicable required filing date or (B)
notwithstanding that the Company, Capital and the Trust have
consummated an Exchange Offer, the Company, Capital and the Trust are
required to file a Shelf Registration Statement and such Shelf
Registration Statement is not declared effective by the SEC on or prior
to the 30th day after the date such Shelf Registration Statement was
required to be filed, then, commencing on the 31st day after the
applicable required filing date, Additional Interest shall accrue on
the principal amount of the Subordinated Notes, and Additional
Distributions shall accumulate on the liquidation amount of the Capital
Securities, each at a rate of 0.25% per annum; or
(iii) (A) the Trust has not exchanged Exchange Capital
Securities for all Capital Securities, Capital has not exchanged the
Exchange Subordinated Notes for all Subordinated Notes or the Company
has not exchanged the Exchange Capital Securities Guarantee for the
Guarantee or has not Exchanged the Exchange Notes Guarantee for the
Notes Guarantee validly tendered in each case, in accordance with the
terms of the Exchange Offer on or prior to the 40th day after the date
on which the Exchange Offer Registration Statement was declared
effective or (B) if applicable, the Shelf Registration Statement has
been declared effective and such Shelf Registration Statement ceases to
be effective at any time prior to the expiration of the Rule 144(k)
Period (other than after such time as all Capital Securities have been
disposed of thereunder or otherwise cease to be Registrable
Securities), then Additional Interest shall accrue on the principal
amount of Subordinated Notes, and Additional Distributions shall
accumulate on
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the liquidation amount of the Capital Securities, each at a rate of
0.25% per annum commencing on (x) the 41st day after such effective
date, in the case of (A) above, or (y) the day such Shelf Registration
Statement ceases to be effective in the case of (B) above;
provided, however, that neither the Additional Interest rate on the Subordinated
Notes, nor the Additional Distribution rate on the liquidation amount of the
Capital Securities, may exceed in the aggregate 0.25% per annum; provided,
further, however, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2) upon the effectiveness of the Exchange Offer Registration Statement or a
Shelf Registration Statement (in the case of clause (ii) above), (3) upon the
exchange of Exchange Capital Securities, Exchange Capital Securities Guarantee,
Exchange Notes Guarantee and Exchange Subordinated Notes for all Capital
Securities, the Capital Securities Guarantee, the Notes Guarantee and all
Subordinated Notes tendered (in the case of clause (iii)(A) above), or upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (iii)(B) above), or (4) upon the expiration of
three years (or such shorter period as may hereafter be provided in Rule 144(k)
under the Securities Act (or similar rule)) commencing on the date of original
issuance of the Securities, Additional Interest on the Subordinated Notes, and
Additional Distributions on the liquidation amount of the Capital Securities as
a result of such clause (or the relevant subclause thereof, as the case may be,
shall cease to accrue or accumulate, as the case may be.
Any amounts of Additional Interest and Additional
Distributions due pursuant to Section 2(e) (i), (ii) or (iii) above will be
payable in cash on the relevant payment dates for the payment of interest and
Distributions pursuant to the Indenture and the Declaration, respectively.
(f) Specific Enforcement. Without limiting the remedies
available to the Holders, the Company, Capital and the Trust acknowledge that
any failure by the Company, Capital or the Trust to comply with its obligations
under Section 2(a) and Section 2(b) hereof may result in material irreparable
injury to the Holders for which there is no adequate remedy at law, that it
would not be possible to measure damages for such injuries precisely and that,
in the event of any such failure, any Holder may obtain such relief as may be
required to specifically enforce the Company's, Capital's and the Trust's
obligations under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the
obligations of the Company, Capital and the Trust with respect to the
Registration Statements pursuant to Sections 2(a) and 2(b) hereof, each of
the Company, Capital and the Trust shall use their best reasonable efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form(s) under the Securities Act, which form(s) (i) shall
be selected by the Company,
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Capital and the Trust, (ii) shall, in the case of a Shelf Registration,
be available for the sale of the Registrable Securities by the selling
Holders thereof and (iii) shall comply as to form in all material
respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith; and use
its reasonable best efforts to cause such Registration Statement to
become effective and remain effective in accordance with Section 2
hereof; provided, however, that if (1) such filing is pursuant to
Section 2(b), or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2(a) is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Securities, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto, the
Company, Capital and the Trust shall furnish to and afford the Holders
of the Registrable Securities and each such Participating
Broker-Dealer, as the case may be, covered by such Registration
Statement, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed. The Company,
Capital and the Trust shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto in respect of which
the Holders must be afforded an opportunity to review prior to the
filing of such document if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their counsel or the managing
underwriters, if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be, and
cause each Prospectus to be supplemented, if so determined by the
Company, Capital or the Trust or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the Securities
Act, and comply with the provisions of the Securities Act, the Exchange
Act and the rules and regulations promulgated thereunder applicable to
it with respect to the disposition of all securities covered by each
Registration Statement during the Effectiveness Period or the
Applicable Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders thereof
described in this Agreement (including sales by any Participating
Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf Registration
Statement, at least three Business Days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Securities is
being filed and advising such Holder that the distribution of
Registrable Securities will be made in accordance with the method
selected by the Majority Holders; (ii) furnish to each Holder of
Registrable Securities included in the Shelf Registration Statement and
to each underwriter of an underwritten offering of Registrable
Securities, if any, without charge, as
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many copies of each Prospectus, including each preliminary Prospectus,
and any amendment or supplement thereto and such other documents as
such Holder or underwriter may reasonably request, in order to
facilitate the public sale or other disposition of the Registrable
Securities; (iii) consent to the use of the Prospectus or any amendment
or supplement thereto by each of the selling Holders of Registrable
Securities included in the Shelf Registration Statement in connection
with the offering and sale of the Registrable Securities covered by the
Prospectus or any amendment or supplement thereto; and (iv) furnish to
each Holder of Registrable Securities either a summary of the terms of
this Agreement or a copy of this Agreement;
(d) in the case of a Shelf Registration, cooperate with the
Trustee to register or qualify the Registrable Securities under all
applicable state securities or "blue sky" laws of such jurisdictions by
the time the applicable Registration Statement is declared effective by
the SEC as any Holder of Registrable Securities covered by a
Registration Statement and each underwriter of an underwritten offering
of Registrable Securities shall reasonably request in writing in
advance of such date of effectiveness; provided, however, that the
Company, Capital and the Trust shall not be required to (i) qualify as
a foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to qualify but for this
Section 3(d), (ii) file any general consent to service of process in
any jurisdiction where it would not otherwise be subject to such
service of process or (iii) file annual reports or comply with any
other requirements deemed by the Company to be unduly burdensome;
(e) in the case of (1) a Shelf Registration or (2)
Participating Broker-Dealers from whom the Company or the Trust has
received prior written notice that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as
provided in Section 3(t) hereof, are seeking to sell Exchange
Securities and are required to deliver Prospectuses, notify each Holder
of Registrable Securities, or such Participating Broker-Dealers, as the
case may be, their counsel and the managing underwriters, if any,
promptly and promptly confirm such notice in writing (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any
request by the SEC or any state securities authority for amendments and
supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective,
(iii) of the issuance by the SEC or any state securities authority of
any stop order suspending the effectiveness of a Registration Statement
or the qualification of the Registrable Securities or the Exchange
Securities to he offered or sold by any Participating Broker-Dealer in
any jurisdiction described in paragraph 3(d) hereof or the initiation
of any proceedings for that purpose, (iv) in the case of a Shelf
Registration, if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered
thereby, the representations and warranties of the Company, Capital and
the Trust contained in any purchase agreement, securities sales
agreement or other similar agreement, if any cease to
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be true and correct in all material respects, and (v) of the happening
of any event or the failure of any event to occur or the discovery of
any facts or otherwise, during the Effectiveness Period which makes any
statement made in such Registration Statement or the related Prospectus
untrue in any material respect or which causes such Registration
Statement or Prospectus to omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (vi) the Company's, Capital's
and the Trust's reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of a Registration
Statement at the earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage of such
Shelf Registration Statement, without charge, at least one conformed
copy of each Registration Statement relating to such Shelf Registration
and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless
requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends and in
such denominations (consistent with the provisions of the Indenture and
the Trust Agreement) and registered in such names as the selling
Holders or the underwriters may reasonably request at least two
Business Days prior to the closing of any sale of Registrable
Securities pursuant to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, prepare a
supplement or post-effective amendment to a Registration Statement or
the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and to notify each Holder to suspend use of the Prospectus
as promptly as practicable after the occurrence of such an event, and
each Holder hereby agrees to suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such
misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time
prior to the filing of any document which is to be incorporated by
reference into a Statement,
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provide a reasonable number of copies of such document to the Holders;
and make such of the representatives of the Company and the Trust as
shall be reasonably requested by the Holders of Registrable Securities
or the Initial Purchasers on behalf of such Holders available for
reasonable discussion of such document;
(k) obtain a CUSIP number for all Exchange Capital Securities
and the Capital Securities (and if the Trust has made a distribution of
the Subordinated Notes to the Holders of the Capital Securities, the
Subordinated Notes or the Exchange Subordinated Notes), as the case may
be, not later than the effective date of a Registration Statement, and
provide the relevant Trustee with printed certificates for the Exchange
Securities or the Registrable Securities, as the case may be, in a form
eligible for deposit with the Depositary;
(l) cause the Indenture, the Trust Agreement, the Guarantee,
the Notes Guarantee and the Exchange Guarantee to be qualified under
the Trust Indenture Act of 1939 (the "TIA") in connection with the
registration of the Exchange Securities or Registrable Securities, as
the case may be, and effect such changes to such documents as may be
required for them to be so qualified in accordance with the terms of
the TIA and execute, and use its reasonable best efforts to cause the
relevant trustee to execute, all documents as may be required to effect
such changes, and all other forms and documents required to be filed
with the SEC to enable such documents to be so qualified in a timely
manner;
(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in
underwritten offerings and consistent with the terms of the Purchase
Agreement and take all such other appropriate actions as are reasonably
requested in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, and in such connection,
whether or not an underwriting agreement is entered into and whether or
not the registration is an underwritten registration, if requested by
(x) any Initial Purchaser, in the case where an Initial Purchaser holds
Securities acquired by it as part of its initial distribution and (y)
other Holders of Securities covered thereby: (i) make such
representations and warranties to Holders of such Registrable
Securities and the underwriters (if any), with respect to the business
of the Trust, the Company, Capital and its subsidiaries as then
conducted and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in
each case, as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company, Capital and the Trust
and updates thereof (which may be in the form of a reliance letter) in
form and substance reasonably satisfactory to the managing underwriters
(if any) and the Holders of a majority in principal amount of the
Registrable Securities being sold, addressed to each selling Holder and
the underwriters (if any) covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as
may be reasonably requested by
15
<PAGE>
such underwriters (it being agreed that the matters to be covered by
such opinion may be subject to customary qualifications and
exceptions); (iii) obtain "cold comfort" letters and updates thereof in
form and substance reasonably satisfactory to the managing underwriters
from the independent certified public accountants of the Company,
Capital and the Trust (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company, Capital
and the Trust or of any business acquired by the Company and the Trust
for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings and such other matters as
reasonably requested by such underwriters in accordance with Statement
on Auditing Standards No. 72; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 4 hereof
(or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Registrable Securities
covered by such Registration Statement and the managing underwriters or
agents) with respect to all parties to be indemnified pursuant to said
Section (including, without limitation, such underwriters and selling
Holders). The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder and
as consistent with the terms of the Purchase Agreement;
(n) if (1) a Shelf Registration is filed pursuant to Section
2(h) or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2(a) is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Securities during the Applicable Period, make
reasonably available for inspection by any selling Holder of such
Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any
such disposition of Registrable Securities, if any, and any attorney,
accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Trust, Capital, the
Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and
employees of the Trust, the Company, Capital and its subsidiaries to
supply all relevant information in each case reasonably requested by
any such Inspector in connection with such Registration Statement
provided, however, that the foregoing inspection and information
gathering shall be coordinated on behalf of the Purchasers by you and
on behalf of the other parties, by one counsel designated by you and on
behalf of such other parties as described in Section 2(c) hereof.
Records which the Company, Capital and the Trust determine, in good
faith, to be confidential and any records which it notifies the
Inspectors are
16
<PAGE>
confidential shall not he disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary to avoid or correct a material
misstatement or omission in such Registration Statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or is necessary in
connection with any action, suit or proceeding or (iii) the information
in such Records has been made generally available to the public. Each
selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to agree in writing that
information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Trust, Capital or the
Company unless and until such is made generally available to the
public. Each selling Holder of such Registrable Securities and each
such Participating Broker-Dealer will be required to agree in writing
that information obtained by it as a result of such inspections shall
be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Trust or the Company
unless and until such is made generally available to the public. Each
selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to further agree in
writing that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company
and allow the Company at its expense to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
(o) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be applicable and
make generally available to its security holders earning statements
satisfying the provisions of Section II(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month
periods;
(p) upon consummation of an Exchange Offer, if requested by a
Trustee, obtain an opinion of counsel to the Company addressed to the
relevant Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer and which includes an
opinion that (i) the Company, Capital and the Trust, as the case
requires, has duly authorized, executed and delivered the Exchange
Securities, and (ii) each of the Exchange Securities constitutes a
legal, valid and binding obligation of the Company, Capital or the
Trust, as the case requires, enforceable against the Company or the
Trust, as the case requires, in accordance with its respective terms
(in each case, with customary exceptions);
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<PAGE>
(q) if an Exchange Offer is to be consummated, upon delivery
of the Registrable Securities by Holders to the Company, Capital or the
Trust, as applicable (or to such other Person as directed by the
Company or the Trust, respectively), in exchange for the Exchange
Securities, the Company or the Trust, as applicable, shall mark, or
cause to be marked, on such Registrable Securities delivered by such
Holders that such Registrable Securities are being cancelled in
exchange for the Exchange Securities in no event shall such Registrable
Securities be marked as paid or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD;
(s) use its reasonable best efforts to take all other
steps necessary to effect the registration of the Registrable
Securities covered by a Registration Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration
Statement (i) indicate in a "Plan of Distribution" section contained in
the Prospectus contained in the Exchange Offer Registration Statement
that any broker or dealer registered under the Exchange Act who holds
Securities that are Registrable Securities and that were acquired for
its own account as a result of market-making activities or other
trading activities (other than Registrable Securities acquired directly
from the Company and the Trust) (such broker or dealer, a
"Participating Broker-Dealer"), may exchange such Securities pursuant
to the Exchange Offer; however, such Participating Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Securities Act
and must, therefore, deliver a prospectus meeting the requirements of
the Securities Act in connection with any resales of the Exchange
Securities received by such Participating Broker-Dealer in the Exchange
Offer, which prospectus delivery requirement may be satisfied by the
delivery by such Participating Broker-Dealer of the Prospectus
contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information with
respect to such resales by Participating Broker-Dealers that the
Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such
Participating Broker-Dealer or disclose the amount of Exchange
Securities held by any such Participating Broker-Dealer except to the
extent required by the Commission as a result of a change in policy
announced after the date of this Agreement, (ii) furnish to each
Participating Broker-Dealer who has delivered to the Company the notice
referred to in Section 3(e), without charge, as many copies of each
Prospectus included in the Exchange Offer Registration Statement,
including any preliminary prospectus, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably request
(each of the Company, Capital and the Trust hereby consents to be the
use of the Prospectus forming part of the Exchange Offer Registration
Statement or any amendment or
18
<PAGE>
supplement thereto by any Person subject to the prospectus delivery
requirements of the Securities Act, including all Participating
Broker-Dealers, in connection with the sale or transfer of the Exchange
Securities covered by the Prospectus or any amendment of supplement
thereto), (iii) use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be
lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such
Persons must comply with such requirements under the Securities Act and
applicable rules and regulations in order to resell the Exchange
Securities; provided, however, that such period shall not be required
to exceed 90 days (or such longer period if extended pursuant to the
last sentence of Section 3 hereof) (the "Applicable Period"), and (iv)
include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange
Offer (x) the following provision:
"It the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus
in connection with the exchange of Registrable Securities, the
broker-dealer will not be deemed to admit that it is an underwriter
within the meaning of the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement,
the Company, Capital and the Trust agree to deliver to the Initial
Purchasers or to another representative of the Participating
Broker-Dealers, if requested by any such Initial Purchasers or such
other representative of the Participating Broker-Dealers, on behalf of
the Participating Broker-Dealers upon consummation of the Exchange
Offer (i) an opinion of counsel in form and substance reasonably
satisfactory to the Initial Purchasers or such other representative of
the Participating Broker-Dealers, covering the matters customarily
covered in opinions requested in connection with Exchange Offer
Registration Statements and such other matters as may be reasonably
requested (it being agreed that the matters to be covered by such
opinion may be subject to customary qualifications and exceptions),
(ii) an officer's certificate containing certifications substantially
similar to those set forth in Section 5(d) of the Purchase Agreement
and such additional certifications as are customarily delivered in a
public offering of debt securities and (iii) as well as upon the
effectiveness of the Exchange Offer Registration Statement, a comfort
letter, in each case, in customary form if
19
<PAGE>
permitted by Statement on Auditing Standards No. 72. Each of the
foregoing shall be consistent with the terms of the Purchase Agreement.
The Company, Capital or the Trust may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company, Capital or the Trust, as applicable, such information regarding
such seller as may be required by the staff of the SEC to be included in a
Registration Statement. The Company, Capital or the Trust may exclude from such
registration the Registrable Securities of any seller who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
The Company shall have no obligation to register under the Securities Act the
Registrable Securities of a seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Company, Capital and the
Trust that they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof, are seeking to sell
Exchange Securities and are required to deliver Prospectuses, each Holder agrees
that, upon receipt of any notice from the Company, Capital or the Trust of the
happening of any event of the kind described in Section 3(e)(ii), 3(e)(iii),
3(e)(v) or 3(e)(vi) hereof, such Holder will forthwith discontinue disposition
of Registrable Securities pursuant to a Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof or until it is advised in writing (the
"Advice") by the Company, Capital and the Trust that the use of the applicable
Prospectus may be resumed, and, if so directed by the Company, Capital and the
Trust, such Holder will deliver to the Company, Capital or the Trust (at the
Company's, Capital's or the Trust's expense, as the case requires) all copies in
such Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities or Exchange
Securities, as the case may be, current at the time of receipt of such notice.
If the Company, Capital or the Trust shall give any such notice to suspend the
disposition of Registrable Securities or Exchange Securities, as the case may
be, pursuant to a Registration Statement, the Company, Capital and the Trust
shall use their best efforts to file and have declared effective (if an
amendment) as soon as practicable an amendment or supplement to the Registration
Statement and shall extend the period during which such Registration Statement
shall be maintained effective pursuant to this Agreement by the number of days
in the period from and including the date of the giving of such notice to and
including the date when the Company, Capital and the Trust shall have made
available to the Holders (x) copies of the supplemented or amended Prospectus
necessary to resume such dispositions or (y) the Advice.
4. Indemnification.
(a) In connection with any Registration Statement, the
Company, Capital and the Trust shall, jointly and severally, indemnify and hold
harmless each Initial Purchaser, each Holder, each underwriter who participates
in an offering of the Registrable Securities, each Participating Broker-Dealer,
and each Person, if any, who
20
<PAGE>
controls any of such parties within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (each an "Indemnified Party") as follows:
(i) from and against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Securities Act or otherwise, and to reimburse the
Indemnified Party for any legal or other expenses incurred by them in
connection with defending any actions, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in any Prospectus or the Prospectus as amended or
supplemented, or arise out of or are based upon any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission which was made in such Prospectus,
or the Prospectus as amended or supplemented, in reliance upon and in
conformity with information furnished in writing to the Company by such
Indemnified Party for use therein and except that this indemnity with
respect to the Prospectus if the Company shall have furnished any
amendment or supplement thereto, shall not inure to the benefit of any
Indemnified Party on account of any losses, claims, damages,
liabilities or actions arising from the sale of Registrable Securities
to any person if a copy of the Prospectus, as the same may then be
amended or supplemented, shall not have been sent or given by or on
behalf of such Indemnified Party to such person with or prior to the
written confirmation of the sale involved. Each Indemnified Party shall
agree, that within ten days after the receipt by it of notice of the
commencement of any action in respect of which indemnity may be sought
by it, or by any person controlling it, from the Company on account of
its agreement contained in this Section 4, to notify the Company in
writing of the commencement thereof, but the omission of such
Indemnified Party so to notify the Company of any such action shall not
release the Company from any liability which it may have to such
Indemnified Party or to such controlling person otherwise than on
account of the indemnity agreement contained in this Section 4. ln case
any such action shall he brought against any Indemnified Party or any
such person controlling such Indemnified Party shall notify the Company
of the commencement thereof, as above provided, the Company shall be
entitled to participate in (and, to the extent that it shall wish,
including the selection of counsel, to direct) the defense thereof at
its own expense. In case the Company elects to direct such defense and
select such counsel, any Indemnified Party or controlling person shall
have the right to employ its own counsel, but, in any such case, the
fees and expenses of such counsel shall be at the expense of such
Indemnified Party or controlling person unless the employment of such
counsel has been authorized in writing by the Company in connection
with defending such action.
The Company's indemnity agreement contained in this Section 4,
shall remain in full force and effect regardless of any investigation made by or
on behalf of
21
<PAGE>
any Indemnified Party or controlling person, and shall survive the registration
of the Registrable Securities.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, Capital, the Trust, any underwriter and
the other selling Holders and each of their respective directors, officers
(including each officer of the Company, Capital and the Trust who signed the
Registration Statement), employees and agents and each Person, if any, who
controls the Company, Capital, the Trust, any underwriter or any other selling
Holder within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all loss, liability, claim, damage
and expense whatsoever described in the indemnity contained in Section 4(a)
hereof, as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company, Capital or the Trust by such selling Holder with respect to such
Holder expressly for use in the Registration Statement (or any amendment
thereto), or any such Prospectus (or any amendment or supplement thereto);
provided, however, that, in the case of Shelf Registration Statement, no such
Holder shall be liable for any claims hereunder in excess of the amount of net
proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement.
(c) The Company shall give notice to each Indemnifying Party
of any action commenced against it in respect of which indemnity may be sought
hereunder in accordance with the terms of, and have the same effect as in
Section 4(a).
5. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. Selection of Underwriters. The Holders of Registrable
Securities covered by the Shelf Registration Statement who desire to do so may
sell the securities covered by such Shelf Registration in an underwritten
offering. In any such underwritten offering, the underwriter or underwriters and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of the Registrable
Securities included in such offering; provided, however, that such underwriters
and managers must be reasonably satisfactory to the Company, Capital and the
Trust.
7. Miscellaneous.
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<PAGE>
(a) Rule 144 and Rule 144A. For so long as the Company,
Capital or the Trust is subject to the reporting requirements of Section 13 or
15 of the Exchange Act and any Registrable Securities remain outstanding, the
Company, Capital and the Trust, as the case may be, will use their reasonable
best efforts to file the reports required to be filed by it under the Securities
Act and Section 13(a) or 15(d) of the Exchange Act and the rules and regulations
adopted by the SEC thereunder, that if it ceases to be so required to file such
reports, it will, upon the request of any Holder of Registrable Securities (a)
make publicly available such information as is necessary to permit sales of
their securities pursuant to Rule 144 under the Securities Act, (b) deliver such
information to prospective purchaser as is necessary to permit sales of their
securities pursuant to Rule 144A under the Securities Act and it will take such
further action as any Holder of Registrable Securities may reasonably request,
and (c) take such further action that is reasonable in the circumstances, in
each case, to the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, (ii) Rule 144A
under the Securities Act, as such rule may be amended from time to time, or
(iii) any similar rules or regulations hereafter adopted by the SEC. Upon the
request of any Holder of Registrable Securities, the Company, Capital and the
Trusts will deliver to such Holder a written statement as to whether it has
complied with such requirements.
(b) No Inconsistent Agreements. The Company, Capital or the
Trust has not entered into nor will the Company, Capital or the Trust on or
after the date of this Agreement enter into any agreement which is inconsistent
with the rights granted to the Holders of Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's, Capital's
or the Trust's other issued and outstanding securities under any such
agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be an amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company, Capital and the Trust have obtained the
written consent of Holders of at least a majority in aggregate principal amount
of the outstanding Registrable Securities affected by such amendment,
modification, supplement, waiver or departure; provided no departure with
respect to the provisions of Section 4 hereof shall be effective as against any
Holder of Registrable Securities. Notwithstanding the foregoing sentence, (i)
this Agreement may be amended, without the consent of any Holder of Registrable
Securities, by written agreement signed by the Company, Capital, the Trust and
Lehman Brothers, to cure any ambiguity, correct or supplement any provision of
this Agreement that may be inconsistent with any other provision of this
Agreement or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with other
provisions of this Agreement, (ii) this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written
23
<PAGE>
agreement signed by the Company, Capital, the Trust and Lehman Brothers to the
extent that any such amendment, modification, supplement, waiver or consent is,
in their reasonable judgment, necessary or appropriate to comply with applicable
law (including any interpretation of the Staff of the SEC) or any change therein
and (iii) to the extent any provision of this Agreement relates to the Initial
Purchasers, such provision may be amended, modified or supplemented, and waivers
or consents to departures from such provisions may he given, by written
agreement signed by Lehman Brothers, the Company, Capital and the Trust.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company or the Trust by means of a notice given in accordance with the
provisions of this Section 7(d), which address initially is, with respect to the
Initial Purchasers, the address set forth in the Purchase Agreement; and (ii) if
to the Company or the Trust, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied: and
on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement or
the Indenture. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Initial Purchasers
shall be a third party beneficiary of the agreements made hereunder between the
Company, Capital and the Trust, on the one hand, and the Holders, on the other
hand, and shall have the right to enforce such agreements directly to the extent
it deems such enforcement necessary or advisable to protect its rights or the
rights of Holders hereunder.
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<PAGE>
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Securities Held by the Company, the Trust or its
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company, Capital, the Trust or its affiliates (as such
term is defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
THE SOUTHERN COMPANY
By:
Name:
Title:
SOUTHERN COMPANY CAPITAL
FUNDING, INC.
By:
Name:
Title:
SOUTHERN COMPANY CAPITAL
TRUST I
By:
Name:
Title:
Confirmed and accepted as of
the date first above
written:
LEHMAN BROTHERS INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
J.P. MORGAN SECURITIES INC.
SALOMON BROTHERS INC
By: LEHMAN BROTHERS INC.
as Representative of the
Several Initial Purchasers
26
<PAGE>
Exhibit 4.10
CAPITAL SECURITIES GUARANTEE AGREEMENT
Between
The Southern Company
(as Guarantor)
and
Bankers Trust Company
(as Trustee)
dated as of
February 1, 1997
<PAGE>
CROSS-REFERENCE TABLE1
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
310(a)..................................................................4.01(a)
310(b)............................................................4.01(c), 2.08
310(c).............................................................Inapplicable
311(a)..................................................................2.02(b)
311(b)..................................................................2.02(b)
311(c).............................................................Inapplicable
312(a)..................................................................2.02(a)
312(b)..................................................................2.02(b)
313........................................................................2.03
314(a).....................................................................2.04
314(b).............................................................Inapplicable
314(c).....................................................................2.05
314(d).............................................................Inapplicable
314(e).........................................................1.01, 2.05, 3.02
314(f)...............................................................2.01, 3.02
315(a)..................................................................3.01(d)
315(b).....................................................................2.07
315(c).....................................................................3.01
315(d)..................................................................3.01(d)
315(e).............................................................Inapplicable
316(a)............................................................5.04(i), 2.06
316(b).....................................................................5.03
316(c).....................................................................2.02
317(a).............................................................Inapplicable
317(b).............................................................Inapplicable
318(a)..................................................................2.01(b)
318(b).....................................................................2.01
318(c)..................................................................2.01(a)
____________________
1This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I..................................................................1
SECTION 1.01. Definitions..................................................2
ARTICLE II.................................................................4
SECTION 2.01. Trust Indenture Act; Application.............................5
SECTION 2.02. Lists of Holders of Securities...............................5
SECTION 2.03. Reports by the Trustee.......................................5
SECTION 2.04. Periodic Reports to Trustee..................................6
SECTION 2.05. Evidence of Compliance with Conditions Precedent.............6
SECTION 2.06. Events of Default; Waiver....................................6
SECTION 2.07. Event of Default; Notice.....................................6
SECTION 2.08. Conflicting Interests........................................7
ARTICLE III................................................................7
SECTION 3.01. Powers and Duties of the Trustee.............................7
SECTION 3.02. Certain Rights of Trustee....................................9
SECTION 3.03. Compensation; Fees; Indemnity...............................11
ARTICLE IV................................................................12
SECTION 4.01. Trustee; Eligibility........................................12
SECTION 4.02. Appointment, Removal and Resignation of Trustee.............13
ARTICLE V.................................................................14
SECTION 5.01. Guarantee...................................................14
SECTION 5.02. Waiver of Notice and Demand.................................14
SECTION 5.03. Obligations Not Affected....................................14
SECTION 5.04. Rights of Holders...........................................15
SECTION 5.05. Guarantee of Payment........................................16
SECTION 5.06. Subrogation.................................................16
SECTION 5.07. Independent Obligations.....................................17
ARTICLE VI................................................................17
SECTION 6.01. Subordination...............................................17
ARTICLE VII...............................................................17
SECTION 7.01. Termination.................................................17
ARTICLE VIII..............................................................18
SECTION 8.01. Successors and Assigns......................................18
SECTION 8.02. Amendments..................................................18
SECTION 8.03. Notices.....................................................18
SECTION 8.04. Exchange Offer..............................................19
SECTION 8.05. Benefit.....................................................20
SECTION 8.06. Interpretation..............................................20
SECTION 8.07. Governing Law...............................................20
<PAGE>
GUARANTEE AGREEMENT
This CAPITAL SECURITIES GUARANTEE AGREEMENT ("Guarantee Agreement"),
dated as of February 1, 1997, between THE SOUTHERN COMPANY, a Delaware
corporation (the "Guarantor"), and BANKERS TRUST COMPANY, a New York banking
corporation, as trustee (the "Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Capital Securities (as defined herein)
of SOUTHERN COMPANY CAPITAL TRUST I, a Delaware statutory business trust (the
"Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of February 1, 1997, among the Trustee, the other
Trustees named therein, Southern Company Capital Funding, Inc., a Delaware
corporation (the "Company"), as Depositor, and the holders of undivided
beneficial interests in the assets of the Trust, the Trust is issuing as of
February 4, 1997 $325,000,000 aggregate liquidation amount of its 8.19% Capital
Securities (the "Capital Securities") representing preferred undivided
beneficial interests in the assets of the Trust and having the terms set forth
in the Trust Agreement;
WHEREAS, the Capital Securities will be issued by the Trust and the
proceeds thereof will be used to purchase the Junior Subordinated Notes (as
defined in the Trust Agreement) of the Company, which will be held by the Trust
as trust assets; and
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the payment for Capital Securities
by each Holder (as defined herein) thereof, which payment the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time of the
Capital Securities.
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Trust.
"Event of Default" means a failure by the Guarantor to perform any of
its payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by or on behalf of the Trust: (i) any accrued and
unpaid distributions that are required to be paid on such Capital Securities but
if and only if and to the extent the Trust has funds legally and immediately
available therefor to make such payment; (ii) the redemption price, including
all accrued and unpaid distributions to the date of redemption (the "Redemption
Price"), with respect to the Capital Securities called for redemption by the
Trust but if and only if and to the extent that the Trust has funds legally and
immediately available therefor sufficient to make such payment; and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Junior Subordinated Notes to
the holders of Trust Securities or the redemption of all of the Capital
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Capital Securities to the date of
payment, to the extent the Trust has funds legally and immediately available
therefor, and (b) the amount of assets of the Trust remaining available for
distribution to Holders in liquidation of the Trust (in either case, the
"Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and records
of the Trust, of any Capital Securities; provided, however, that in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Company or any Affiliate of the Guarantor or the Company.
"Indenture" means the Subordinated Note Indenture dated as of February
1, 1997, among the Company, as Subordinated Note Issuer, the Guarantor, as
guarantor, and Bankers Trust Company, as trustee, as supplemented by the First
Supplemental Indenture dated as of February 4, 1997, by and among the Company,
the Guarantor and Bankers Trust Company, as trustee.
"Majority in liquidation amount of Capital Securities" means a vote by
Holder(s) of Capital Securities, voting separately as a class, of more than 50%
of the liquidation amount of all Capital Securities outstanding at the time of
determination.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Guarantor, and
delivered to the Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of February 4, 1997 among the Guarantor, the Company, the Trust and the
Initial Purchasers named therein, as such agreement may be amended, modified or
supplemented from time to time.
"Responsible Officer" means, with respect to the Trustee, any managing
director, any vice president, any assistant vice president, any assistant
secretary, any assistant treasurer, or any other officer of the Corporate Trust
and Agency Group of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Successor Trustee" means a successor Trustee possessing the
qualifications to act as Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trustee" means Bankers Trust Company until a Successor Trustee has
been appointed and has accepted such appointment pursuant to the terms of this
Guarantee Agreement and thereafter means each such Successor Trustee.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions; and
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.02. Lists of Holders of Securities.
(a) The Guarantor shall furnish or cause to be furnished to the Trustee
(a) semiannually, not later than June 1 and December 1 in each year, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders ("List of Holders") as of a date not more than 15 days prior to the
time such list is furnished, and (b) at such other times as the Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished; provided that, the Guarantor shall not be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Trustee by the Guarantor or at
any time the Trustee is the Securities Registrar under the Trust Agreement. The
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Trustee. Within 60 days after May 15 of
each year commencing May 15, 1997, the Trustee shall provide to the Holders of
the Capital Securities such reports as are required by Section 313(a) of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Trustee. The Guarantor shall provide
to the Trustee such documents, reports and information as required by Section
314 of the Trust Indenture Act (if any) in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act, and shall provide,
within 120 days after the end of each of its fiscal years, the compliance
certificate required by Section 314(a)(4) of the Trust Indenture Act in the form
and in the manner required by such Section.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Guarantee Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.06. Events of Default; Waiver. The Holders of a Majority in
liquidation amount of Capital Securities may, by vote, on behalf of all of the
Holders, waive any past Event of Default and its consequences. Upon such waiver,
any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.07. Event of Default; Notice.
(a) The Trustee shall, within 90 days after the occurrence of an Event
of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all Events of Default known to the Trustee, unless such defaults have
been cured before the giving of such notice, provided that the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Trustee shall not be deemed to have knowledge of any Event of
Default unless the Trustee shall have received written notice, or a Responsible
Officer charged with the administration of the Trust Agreement shall have
obtained written notice, of such Event of Default.
SECTION 2.08. Conflicting Interests. The Trust Agreement shall be deemed to
be specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TRUSTEE
SECTION 3.01. Powers and Duties of the Trustee.
(a) This Guarantee Agreement shall be held by the Trustee for the
benefit of the Holders, and the Trustee shall not transfer this Guarantee
Agreement to any Person except the Trustee shall assign rights hereunder to a
Holder to the extent such assignment is necessary to exercise such Holder's
rights pursuant to Section 5.04 or to a Successor Trustee upon acceptance by
such Successor Trustee of its appointment to act as Successor Trustee. The
right, title and interest of the Trustee shall automatically vest in any
Successor Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Trustee.
(b) If an Event of Default has occurred and is continuing, the Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Trustee, before the occurrence of any Event of Default and
after the curing or waiving of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.06), the
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Guarantee Agreement, and the Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee Agreement;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a Majority in liquidation amount
of the Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
SECTION 3.02. Certain Rights of Trustee.
(a) Subject to the provisions of Section 3.01:
(i) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
rely upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor;
(iv) the Trustee may consult with counsel of its choice, and
the advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion; such counsel may be counsel
to the Guarantor or any of its Affiliates and may include any of its
employees; the Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction;
(v) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have
provided to the Trustee reasonable security and indemnity satisfactory
to the Trustee against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as
may be requested by the Trustee; provided that nothing contained in
this Section 3.02(a)(v) shall be taken to relieve the Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee Agreement;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(viii) whenever in the administration of this Guarantee
Agreement the Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Trustee (i) may request instructions from the
Holders, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the Trustee shall be construed to be a duty.
SECTION 3.03. Compensation; Fees; Indemnity.
The Guarantor agrees:
(a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by the Trustee hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Guarantee Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold the Trustee harmless
against, any and all loss, damage, claims, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this Guarantee Agreement, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
The provisions of this Section 3.03 shall survive the termination of this
Guarantee Agreement.
ARTICLE IV
TRUSTEE
SECTION 4.01. Trustee; Eligibility.
(a) There shall at all times be a Trustee which shall:
(i) not be an Affiliate of the Guarantor or the Company; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for the
purposes of this Section 4.01(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Trustee shall cease to be eligible to so act
under Section 4.01(a), the Trustee shall immediately resign in the manner and
with the effect set out in Section 4.02(c).
(c) If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, subject to the rights of the Trustee under the
penultimate paragraph thereof.
SECTION 4.02. Appointment, Removal and Resignation of Trustee.
(a) Subject to Section 4.02(b), the Trustee may be appointed or removed
without cause at any time by the Guarantor.
(b) The Trustee shall not be removed until a Successor Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Trustee and delivered to the Guarantor.
(c) The Trustee appointed to office shall hold office until a Successor
Trustee shall have been appointed or until its removal or resignation. The
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing executed by the Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Trustee and delivered to the Guarantor and the
resigning Trustee.
(d) If no Successor Trustee shall have been appointed and accepted
appointment as provided in this Section 4.02 within 60 days after delivery to
the Guarantor of an instrument of resignation, the resigning Trustee may
petition any court of competent jurisdiction for appointment of a Successor
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Guarantor
may have or assert against any Person. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Trust to pay such amounts to the
Holders.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Trust or any other Person before proceeding against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.03. Obligations Not Affected. The obligation of the Guarantor to
make the Guarantee Payments under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Capital Securities to be performed
or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Capital Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with, the Capital Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Junior Subordinated Notes permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Capital Securities, or any
action on the part of the Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Capital Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Trustee to be held
for the benefit of the Holders; (ii) the Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Trustee under this Guarantee Agreement, provided that such
direction shall not be in conflict with any rule of law or with this Guarantee
Agreement, and could not involve the Trustee in personal liability in
circumstances where reasonable indemnity would not be adequate; and (iv) any
Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against or requesting or directing that action be taken by the
Trustee or any other Person; it being understood and intended that no one or
more of such Holders shall have any right in any manner whatsoever by virtue of,
or by availing of, any provision of this Guarantee Agreement to affect, disturb
or prejudice the rights of any other of such Holders or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Guarantee Agreement, except in the manner herein provided and
for the equal and ratable benefit of all of such Holders.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication) or upon the distribution of Junior Subordinated Notes to the
Holders in exchange for all of the Capital Securities.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Trust in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Trust with
respect to the Capital Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.01. Subordination. This Guarantee Agreement will constitute
an unsecured obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the Guarantor, including
the Junior Subordinated Notes, except those obligations or liabilities made pari
passu or subordinate by their terms, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference securities of any Affiliate of the Guarantor, and (iii)
senior to all common stock of the Guarantor.
ARTICLE VII
TERMINATION
SECTION 7.01. Termination. This Guarantee Agreement shall terminate and
be of no further force and effect upon: (i) full payment of the Redemption Price
of all Capital Securities, (ii) the distribution of Junior Subordinated Notes to
the Holders in exchange for all of the Capital Securities, or (iii) full payment
of the amounts payable in accordance with the Trust Agreement upon liquidation
of the Trust. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid with respect to Capital
Securities or under this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Capital Securities then outstanding. Except in
connection with a consolidation, merger, conveyance, transfer, or lease
involving the Guarantor that is permitted under Article Eight of the Indenture,
the Guarantor shall not assign its obligations hereunder.
SECTION 8.02. Amendments. Except with respect to any changes which do
not materially and adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Holders of not less than 66-2/3% in
liquidation amount of all the outstanding Capital Securities. The provisions of
Article Six of the Trust Agreement concerning meetings of Holders shall apply to
the giving of such approval.
SECTION 8.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Trustee and the
Holders:
The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Facsimile No.: (404) 506-0808
Attn: Secretary
with copy to:
Southern Company Services, Inc.
270 Peachtree Street, N.W., Suite 2000
Atlanta, Georgia 30303
Facsimile No.: (404) 506-0674
Attention: Corporate Finance Department
(b) if given to the Trust, in care of the Trustee, or to the Trustee at
the Trust's (and the Trustee's) address set forth below or such other address as
the Trustee on behalf of the Trust may give notice to the Holders:
Southern Company Capital Trust I
c/o Bankers Trust Company
Four Albany Street
New York, New York 10006
Attn: Corporate Trust and Agency Group
Manager Public Utilities Group
with a copy, in the case of a notice to the Trust (other than a notice from
the Guarantor), to the Guarantor;
(c) if given to any Holder, at the address set forth on the books and
records of the Trust.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 8.04. Exchange Offer.
In the event an Exchange Offer Registration Statement (as defined in
the Registration Rights Agreement) becomes effective and the Trust issues any
Exchange Capital Securities in the Exchange Offer, the Guarantor will enter into
a new capital securities guarantee agreement, in substantially the same form as
this Guarantee Agreement, with respect to the Exchange Capital Securities.
SECTION 8.05. Benefit. This Guarantee Agreement is solely for the benefit
of the Holders and, subject to Section 3.01(a), is not separately transferable
from the Capital Securities.
SECTION 8.06. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are
to Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
SECTION 8.07. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK. THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
ANY COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY
WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN
ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER, OR THAT THIS GUARANTEE AGREEMENT OR ANY DOCUMENT OR ANY
INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED
IN OR BY SUCH COURTS. THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE
UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN
THIS GUARANTEE AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
THE SOUTHERN COMPANY
By:
Name: W.L. Westbrook
Title: Financial Vice President
BANKERS TRUST COMPANY
By:
Name:
Title:
EXHIBIT 5.1
Troutman Sanders LLP
600 Peachtree Street
Atlanta, GA 30308
404-885-3000
August 4, 1997
The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Southern Company Capital Funding, Inc.
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Re: Southern Company Capital Funding, Inc. Exchange Offer
Gentlemen:
We have acted as counsel to The Southern Company ("Southern"), Southern
Company Capital Funding, Inc. ("Capital") and Southern Company Capital Trust I
(the "Trust") in connection with the preparation of a Registration Statement on
Form S-4 (File Nos. 333-28349, 333-28349-01 and 333-28349-02), as amended (the
"Registration Statement"), which has been filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), relating to
the proposed offer to exchange up to $325,000,000 aggregate liquidation amount
of the Trust's 8.19% Exchange Capital Securities (the "Exchange Capital
Securities") for a like liquidation amount of its outstanding 8.19% Capital
Securities (the "Original Capital Securities"), of which $325,000,000 aggregate
liquidation amount are issued and outstanding. The Exchange Capital Securities
will be guaranteed (the "Exchange Capital Securities Guarantee") by Southern
pursuant to a guarantee agreement (the "Exchange Guarantee Agreement") between
Southern and Bankers Trust Company, as trustee (the "Guarantee Trustee"), with
respect to the payment of distributions and payments upon liquidation,
redemption and otherwise to the extent set forth in the Prospectus (the
"Prospectus") filed as part of the Registration Statement.
In connection with the offer to exchange the Exchange Capital Securities
for the Original Capital Securities, Capital will also offer to exchange
$335,052,000 aggregate principal amount of its 8.19% Exchange Junior
Subordinated Notes due February 1, 2037 (the "Exchange Subordinated Notes") for
a like aggregate principal amount of its 8.19% Junior Subordinated Notes due
February 1, 2037 (the "Original Subordinated Notes"), which were purchased by
the Trust with the proceeds of the Original Capital Securities. Like the
Exchange Capital Securities, the Exchange Subordinated Notes, the Exchange Notes
Guarantee (as defined in the Prospectus) and the Exchange Capital Securities
Guarantee will be registered under the Act.
<PAGE>
The Southern Company
Southern Company Capital Funding, Inc.
August 4, 1997
Page 2
The Original Capital Securities were, and the Exchange Capital Securities
are being, issued pursuant to the Amended and Restated Trust Agreement dated as
of February 1, 1997 among Capital, as sponsor, Bankers Trust Company, as
property trustee, Bankers Trust (Delaware), as Delaware trustee, and the
administrative trustees named therein. The Original Capital Securities were
guaranteed by Southern on a subordinated basis with respect to distributions and
payments upon liquidation, redemption and otherwise. The Original Subordinated
Notes were, and the Exchange Subordinated Notes will be, issued pursuant to an
Indenture dated as of February 1, 1997 among Southern, Capital and Bankers Trust
Company, as trustee, as supplemented by a First Supplemental Indenture dated as
of February 4, 1997 among Southern, Capital and Bankers Trust Company, as
trustee (collectively, the "Indenture"). The Original Subordinated Notes were
guaranteed by Southern pursuant to the Notes Guarantee (as defined in the
Registration Statement), and the Exchange Subordinated Notes will be guaranteed
by Southern pursuant to the Exchange Notes Guarantee.
We have reviewed copies of the Registration Statement and the
Prospectus and such other documents as we have deemed necessary or appropriate
as a basis for the opinion set forth below.
Based on the foregoing, we are of the opinion that:
(i) assuming (a) due authorization, execution and delivery of
the Indenture, (b) establishment of the terms of the Exchange
Subordinated Notes in conformity with the Indenture and (c) due
execution, delivery, authentication and issuance of the Exchange
Subordinated Notes in accordance with the Indenture and exchange for a
like principal amount of validly tendered Original Subordinated Notes,
the Exchange Subordinated Notes will constitute valid and binding
obligations of Capital entitled to the benefits of the Indenture and
enforceable against Capital in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfer), reorganization, moratorium or similar laws affecting
creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law);
<PAGE>
The Southern Company
Southern Company Capital Funding, Inc.
August 4, 1997
Page 3
(ii) assuming due authorization, execution and delivery of the
Exchange Guarantee Agreement by Southern and the Guarantee Trustee,
the Exchange Capital Securities Guarantee will constitute a valid and
binding obligation of Southern enforceable against Southern in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfer), reorganization, moratorium or
similar laws affecting creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and
(iii) assuming due authorization, execution and delivery of the
Indenture, the Exchange Notes Guarantee will constitute a valid and
binding obligation of Southern enforceable against Southern in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfer), reorganization, moratorium or
similar laws affecting creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
In rendering the foregoing opinion, with respect to matters of New York
law, we have relied on the opinion of Dewey Ballantine attached hereto as Annex
I.
We consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to Troutman Sanders LLP
under the caption "Validity of Exchange Capital Securities" in the Prospectus.
In giving the foregoing consent, we do not hereby admit that we come within the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission thereunder.
Very truly yours,
TROUTMAN SANDERS LLP
<PAGE>
EXHIBIT 5.1--Annex I
Dewey Ballantine
1301 Avenue of the Americas
New York, New York 10019
August 4, 1997
Troutman Sanders LLP
600 Peachtree Street, N.E.
Suite 5200
Atlanta, Georgia 30308
Re: Southern Company Capital Funding, Inc. Exchange Offer
Gentlemen:
We have acted as counsel to the Initial Purchasers in connection with
the preparation of a Registration Statement on Form S-4 (File Nos. 333-28349,
333-28349-01 and 333-28349-02), as amended (the "Registration Statement"), which
has been filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Act"), relating to the proposed offer to exchange
up to $325,000,000 aggregate liquidation amount of 8.19% Exchange Capital
Securities (the "Exchange Capital Securities") of Southern Company Capital Trust
I (the "Trust") for a like liquidation amount of the Trust's outstanding 8.19%
Capital Securities (the "Original Capital Securities"), of which $325,000,000
aggregate liquidation amount are issued and outstanding. The Exchange Capital
Securities will be guaranteed (the "Exchange Capital Securities Guarantee") by
The Southern Company ("Southern") pursuant to a guarantee agreement (the
"Exchange Guarantee Agreement") between Southern and Bankers Trust Company, as
trustee (the "Guarantee Trustee"), with respect to the payment of distributions
and payments upon liquidation, redemption and otherwise to the extent set forth
in the Prospectus (the "Prospectus") filed as part of the Registration
Statement.
In connection with the offer to exchange the Exchange Capital
Securities for the Original Capital Securities, Southern Company Capital
Funding, Inc. ("Capital") will also offer to exchange $335,052,000 aggregate
principal amount of its 8.19% Exchange Junior Subordinated Notes due February 1,
2037 (the "Exchange Subordinated Notes") for a like aggregate principal amount
of its 8.19% Junior Subordinated Notes due February 1, 2037 (the "Original
Subordinated Notes"), which were purchased by the Trust with the proceeds of the
Original Capital Securities. Like the Exchange Capital Securities, the Exchange
Subordinated Notes, the Exchange Notes Guarantee (as defined in the Prospectus)
and the Exchange Capital Securities Guarantee will be registered under the Act.
<PAGE>
Troutman Sanders LLP
August 4, 1997
Page 2
The Original Capital Securities were, and the Exchange Capital Securities
are being, issued pursuant to the Amended and Restated Trust Agreement dated as
of February 1, 1997 among Capital, as sponsor, Bankers Trust Company, as
property trustee, Bankers Trust (Delaware), as Delaware trustee, and the
administrative trustees named therein. The Original Capital Securities were
guaranteed by Southern on a subordinated basis with respect to distributions and
payments upon liquidation, redemption and otherwise. The Original Subordinated
Notes were, and the Exchange Subordinated Notes will be, issued pursuant to an
Indenture dated as of February 1, 1997 among Southern, Capital and Bankers Trust
Company, as trustee, as supplemented by a First Supplemental Indenture dated as
of February 4, 1997 among Southern, Capital and Bankers Trust Company, as
trustee (collectively, the "Indenture"). The Original Subordinated Notes were
guaranteed by Southern pursuant to the Notes Guarantee (as defined in the
Registration Statement), and the Exchange Subordinated Notes will be guaranteed
by Southern pursuant to the Exchange Notes Guarantee.
We have reviewed copies of the Registration Statement and the
Prospectus and such other documents as we have deemed necessary or appropriate
as a basis for the opinion set forth below.
Based on the foregoing, we are of the opinion that:
(i) assuming (a) due authorization, execution and delivery of
the Indenture, (b) establishment of the terms of the Exchange
Subordinated Notes in conformity with the Indenture and (c) due
execution, delivery, authentication and issuance of the Exchange
Subordinated Notes in accordance with the Indenture and exchange for a
like principal amount of validly tendered Original Subordinated Notes,
the Exchange Subordinated Notes will constitute valid and binding
obligations of Capital entitled to the benefits of the Indenture and
enforceable against Capital in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfer), reorganization, moratorium or similar laws affecting
creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law);
(ii) assuming due authorization, execution and delivery of the
Exchange Guarantee Agreement by Southern and the Guarantee Trustee,
the Exchange Capital Securities Guarantee will constitute a valid and
binding obligation of Southern enforceable against Southern in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfer), reorganization, moratorium or
similar laws affecting creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and
<PAGE>
Troutman Sanders LLP
August 4, 1997
Page 3
(iii) assuming due authorization, execution and delivery of the
Indenture, the Exchange Notes Guarantee will constitute a valid and
binding obligation of Southern enforceable against Southern in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfer), reorganization, moratorium or
similar laws affecting creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
This opinion is furnished solely for your benefit in connection with
your rendering opinions to Southern and Capital to be filed as Exhibits 5.1 and
5.3 to the Registration Statement and we hereby consent to your attaching this
opinion as an annex to such opinions. This opinion may not be relied upon by you
for any other purpose, or quoted to or relied upon by any other person, firm or
entity for any purpose, without our prior written consent.
Very truly yours,
/s/Dewey Ballantine
DEWEY BALLANTINE
Exhibit 5.2
August 4, 1997
Southern Company Capital Trust I
c/o Southern Company Capital Funding, Inc.
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Re: Southern Company Capital Trust I
Ladies and Gentlemen:
We have acted as special Delaware counsel for The Southen Company, a
Delaware corporaiton ("Southern"), Southern Company Capital Funding, Inc., a
Delaware corporation (the "Company"), and Southern Company Capital Trust I, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:
(a) The Certificate of Trust of the Trust, dated as of January 24, 1997
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on January 24, 1997;
(b) The Trust Agreement of the Trust, dated as of January 24, 1997, between
the Company, as Depositor, and the trustee of the Trust named therein;
(c) Amendment No. 1 to the Registration Statement (the "Registration
Statement") on Form S-4, including a prospectus (the "Prospectus"), relating to
the 8.19%
<PAGE>
Southern Company Capital Trust I
August 4, 1997
Page 2
Exchange Capital Securities of the Trust representing preferred undivided
beneficial interests in the assets of the Trust (each, a "Capital Security" and
collectively, the "Capital Securities"), as proposed to be filed by Southern,
the Company and the Trust with the Securities and Exchange Commission on or
about August 4, 1997;
(d) The Amended and Restated Trust Agreement of the Trust, among the
Company, as Depositor, the trustees of the Trust named therein, and the holders,
from time to time, of undivided beneficial interests in the assets of the Trust
(including Exhibits C and E thereto) (the "Trust Agreement"); and
(e) A Certificate of Good Standing for the Trust, dated August 4, 1997,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed in paragraphs (a) through (e) above. In particular, we have
not reviewed any document (other than the documents listed in paragraphs (a)
through (e) above) that is referred to in or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the opinions stated
herein. We have conducted no independent factual investigation of our own but
rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust Agreement
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Capital Security is to be issued by the Trust (collectively, the "Capital
Security Holders") of a Capital Securities Certificate for such Capital Security
and the payment for the
<PAGE>
Southern Company Capital Trust I
August 4, 1997
Page 3
Capital Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Capital Securities are issued and
sold to the Capital Security Holders in accordance with the Trust Agreement and
the Registration Statement. We have not participated in the preparation of the
Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good standing
as a business trust under the Delaware Business Trust Act.
2. The Capital Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capitla Security Holders, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We note that the Capital Security Holders may be
obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Validity of Exchange Capital
Securities" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
EXHIBIT 8.1
Troutman Sanders LLP
600 Peachtree Street
Atlanta, GA 30308
404-885-3000
August 4, 1997
The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Southern Company Capital Funding, Inc.
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Re: Southern Company Capital Trust I
Certain Federal Income Tax Considerations
Gentlemen:
We have acted as special tax counsel to The Southern Company
("Southern"), Southern Company Capital Funding, Inc. ("Capital") and Southern
Company Capital Trust I (the "Trust") in connection with the preparation of a
Registration Statement on Form S-4, as amended (the "Registration Statement"),
which has been filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), relating to the proposed offer
to exchange up to $325,000,000 aggregate liquidation amount of the Trust's 8.19%
Exchange Capital Securities (the "Exchange Capital Securities") for a like
liquidation amount of its outstanding 8.19% Capital Securities (the "Original
Capital Securities"), of which $325,000,000 aggregate liquidation amount are
issued and outstanding. The Exchange Capital Securities will be guaranteed (the
"Exchange Capital Securities Guarantee") by Southern with respect to the payment
of distributions and payments upon liquidation, redemption and otherwise to the
extent set forth in the Prospectus (the "Prospectus") filed as part of the
Registration Statement.
In connection with the offer to exchange the Exchange Capital
Securities for the Original Capital Securities, Capital will also offer to
exchange $335,052,000 aggregate principal amount of its 8.19% Exchange
Subordinated Notes due February 1, 2037 (the "Exchange Subordinated Notes") for
a like aggregate principal amount of its 8.19% Subordinated Notes due February
1, 2037 (the "Original Subordinated Notes"), which were purchased by the Trust
with the proceeds of the Original Capital Securities. Like the Exchange Capital
Securities, the Exchange Subordinated Notes, the Exchange Capital Securities
Guarantee and the Exchange Notes Guarantee will be registered under the Act.
<PAGE>
The Southern Company
Southern Company Capital Funding, Inc.
August 4, 1997
Page 2
We have reviewed copies of the Registration Statement and the
Prospectus and such other documents as we have deemed necessary or appropriate
as a basis for the opinion set forth below.
Based on the foregoing, we are of the opinion that if the offer and
sale of the Exchange Capital Securities are conducted in the manner described in
the Prospectus and if the terms of the Exchange Capital Securities are as
contemplated by the Prospectus, then the statements as to matters of law and
legal conclusions contained in the Prospectus under the caption "Certain Federal
Income Tax Considerations" are correct in all material respects and the
discussion thereunder does not omit any material provision with respect to the
matters covered.
We consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to Troutman Sanders LLP
under the captions "Certain Federal Income Tax Considerations" and "Validity of
Exchange Capital Securities" in the Registration Statement. In giving the
foregoing consent, we do not hereby admit that we come within the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/Troutman Sanders LLP
TROUTMAN SANDERS LLP
EXHIBIT 99.1
LETTER OF TRANSMITTAL
TO ACCOMPANY
OFFER TO EXCHANGE ITS 8.19% EXCHANGE CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 8.19% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
PURSUANT TO THE PROSPECTUS DATED AUGUST 4, 1997
SOUTHERN COMPANY CAPITAL TRUST I
- -------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON SEPTEMBER 3, 1997, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
To: Bankers Trust Company, Exchange Agent
<TABLE>
<CAPTION>
By Mail: By Hand: By Overnight Mail:
Or Courier:
<S> <C> <C>
BT SERVICES TENNESSEE, INC. BANKERS TRUST COMPANY BT SERVICES TENNESSEE, INC.
REORGANIZATION UNIT CORPORATE TRUST & AGENCY GROUP CORPORATE TRUST & AGENCY GROUP
P.O. BOX 292737 RECEIPT & DELIVERY WINDOW REORGANIZATION UNIT
NASHVILLE, TN 37229-2737 123 WASHINGTON STREET, 1ST FLOOR 648 GRASSMERE PARK ROAD
NEW YORK, NY 10006 NASHVILLE, TN 37211
FOR INFORMATION: TO CONFIRM BY TELEPHONE FACSIMILE TRANSMISSIONS:
(800) 735-7777 (615) 835-3572 (ELIGIBLE INSTITUTIONS ONLY)
(615) 835-3701
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same
meaning given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Original
Capital Securities (as defined below) either if Original Capital Securities are
to be forwarded herewith or if tenders of Original Capital Securities are to be
made by book-entry transfer to an account maintained by Bankers Trust Company
(the "Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in "The Exchange Offer -- Procedures for Tendering Original
Capital Securities" in the Prospectus.
Holders of Original Capital Securities whose certificates (the
"Certificates") for such Original Capital Securities are not immediately
available or who cannot deliver their Certificates and all other required
documents to the Exchange Agent on or prior to the Expiration Date (as defined
in the Prospectus) or who cannot complete the procedures for book-entry transfer
on a timely basis must tender their Original Capital Securities according to the
guaranteed delivery procedures set forth in "The Exchange Offer -- Procedures
for Tendering Original Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
<TABLE>
<S> <C> <C> <C> <C>
- ----------------------------------------- ---------------------- ------------------- -------------------- -------------------
Please print Name and Address Please Show Original Capital Liquidation Amount Beneficial
of Registered Holder Certificate Number(s) Securities of Original Holders and Names
(Need not be Tendered Capital Securities in which such
Completed by (Attach Tendered Securities are
Book-Entry Holders) additional list (if Liquidation held
if needed) Amount of Original
Capital Securities
is Less than All)*
---------------------- ------------------- -------------------- -------------------
---------------------- ------------------- -------------------- -------------------
---------------------- ------------------- -------------------- -------------------
---------------------- ------------------- -------------------- -------------------
---------------------- ------------------- -------------------- -------------------
---------------------- ------------------- -------------------- -------------------
TOTAL
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* All Original Capital Securities held shall be deemed tendered unless a lesser
number is specified in this column.
- -------------------------------------------------------------------------------
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
|_| CHECK HERE IF TENDERED ORIGINAL CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
DTC Account Number:
Transaction Code Number:
|_| CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED ORIGINAL CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name of Registered Holders(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution:
DTC Account Number:
Transaction Code Number:
|_| CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED ORIGINAL
CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER
SET FORTH ABOVE.
|_| CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE ORIGINAL CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:
Address:
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Southern Company Capital Trust I, a
statutory business trust formed under the laws of the State of Delaware (the
"Trust"), The Southern Company, a Delaware corporation ("Southern"), and
Southern Company Capital Funding, Inc., a Delaware corporation, as Sponsor
("Capital"), the above described aggregate liquidation amount of the Trust's
8.19% Capital Securities (the "Original Capital Securities") in exchange for a
like aggregate liquidation amount of the Trust's 8.19% Exchange Capital
Securities (the "Exchange Capital Securities") which have been registered under
the Securities Act of 1933 (the "Securities Act"), upon the terms and subject to
the conditions set forth in the Prospectus dated August 4, 1997 (as the same may
be amended or supplemented from time to time, the "Prospectus"), receipt of
which is acknowledged, and in this Letter of Transmittal (which, together with
the Prospectus, constitute the "Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Original Capital Securities tendered herewith in accordance with
the terms and conditions of the Exchange Offer (including, if the Exchange Offer
is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Trust all right, title and interest in and to such Original Capital
Securities as are being tendered herewith. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as agent of
Southern, Capital and the Trust in connection with the Exchange Offer) with
respect to the tendered Original Capital Securities, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), subject only to the right of withdrawal described in
the Prospectus, to (i) deliver Certificates for Original Capital Securities to
Southern, Capital or the Trust together with all accompanying evidences of
transfer and authenticity to, or upon the order of, the Trust, upon receipt by
the Exchange Agent, as the undersigned's agent, of the Exchange Capital
Securities to be issued in exchange for such Original Capital Securities, (ii)
present Certificates for such Original Capital Securities for transfer, and to
transfer the Original Capital Securities on the books of the Trust, and (iii)
receive for the account of the Trust all benefits and otherwise exercise all
rights of beneficial ownership of such Original Capital Securities, all in
accordance with the terms and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENT(S) AND WARRANT(S) THAT THE UNDERSIGNED
HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
ORIGINAL CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED
FOR EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE ORIGINAL CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY SOUTHERN, CAPITAL, THE TRUST OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT
AND TRANSFER OF THE ORIGINAL CAPITAL SECURITIES TENDERED HEREBY, AND THE
UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS
AGREEMENT.
THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE
OFFER.
The name(s) and address(es) of the registered holder(s) of the Original
Capital Securities tendered hereby should be printed above, if they are not
already set forth above, as they appear on the Certificates representing such
Original Capital Securities. The Certificate number(s) and the Original Capital
Securities that the undersigned wishes to tender should be indicated in the
appropriate boxes above.
If any tendered Original Capital Securities are not exchanged pursuant
to the Exchange Offer for any reason, or if Certificates are submitted for more
Original Capital Securities than are tendered or accepted for exchange,
Certificates for such nonexchanged or nontendered Original Capital Securities
will be returned (or, in the case of Original Capital Securities tendered by
book-entry transfer, such Original Capital Securities will be credited to an
account maintained at DTC), without expense to the tendering holder, promptly
following the expiration or termination of the Exchange Offer.
The undersigned understands that tenders of Original Capital Securities
pursuant to any one of the procedures described in "The Exchange Offer --
Procedures for Tendering Original Capital Securities" in the Prospectus and in
the instructions hereto will, upon Southern's, Capital's and the Trust's
acceptance for exchange of such tendered Original Capital Securities, constitute
a binding agreement among the undersigned, Southern, Capital and the Trust upon
the terms and subject to the conditions of the Exchange Offer. The undersigned
recognizes that, under certain circumstances set forth in the Prospectus,
Southern, Capital and the Trust may not be required to accept for exchange any
of the Original Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions," below, the undersigned hereby directs that the Exchange Capital
Securities be issued in the name(s) of the undersigned or, in the case of a
book-entry transfer of Original Capital Securities, that such Exchange Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute Certificates representing Original Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or, in
the case of a book-entry transfer of Original Capital Securities, will be
credited to the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under "Special Delivery Instructions," please deliver
Exchange Capital Securities to the undersigned at the address shown below the
undersigned's signature.
BY TENDERING ORIGINAL CAPITAL SECURITIES AND EXECUTING THIS LETTER OF
TRANSMITTAL OR BY DELIVERYING AN AGENT'S MESSAGE IN LIEU THEREOF, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF SOUTHERN, CAPITAL OR THE TRUST WITHIN THE MEANING OF RULE 405
UNDER THE SECURITIES ACT, (II) ANY EXCHANGE CAPITAL SECURITIES TO BE RECEIVED BY
THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS, (III)
THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO
PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH
EXCHANGE CAPITAL SECURITIES, AND (IV) IF THE UNDERSIGNED IS NOT A BROKER-DEALER,
THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A
DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH EXCHANGE CAPITAL
SECURITIES. BY TENDERING ORIGINAL CAPITAL SECURITIES PURSUANT TO THE EXCHANGE
OFFER AND EXECUTING THIS LETTER OF TRANSMITTAL, A HOLDER OF ORIGINAL CAPITAL
SECURITIES WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH
CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION
FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A)
SUCH ORIGINAL CAPITAL SECURITIES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A
NOMINEE, OR (B) SUCH ORIGINAL CAPITAL SECURITIES WERE ACQUIRED BY SUCH
BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR
OTHER TRADING ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR
SUPPLEMENTED FROM TIME TO TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT
IN CONNECTION WITH ANY RESALE OF SUCH EXCHANGE CAPITAL SECURITIES (PROVIDED
THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH BROKER-DEALER
WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF
THE SECURITIES ACT).
SOUTHERN, CAPITAL AND THE TRUST HAVE AGREED THAT, SUBJECT TO THE
PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE
AMENDED OR SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING
BROKER-DEALER (AS DEFINED BELOW) IN CONNECTION WITH RESALES OF EXCHANGE CAPITAL
SECURITIES RECEIVED IN EXCHANGE FOR ORIGINAL CAPITAL SECURITIES, WHERE SUCH
ORIGINAL CAPITAL SECURITIES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER
FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING
ACTIVITIES, FOR A PERIOD NOT EXCEEDING 90 DAYS AFTER THE EXPIRATION DATE
(SUBJECT TO EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE
PROSPECTUS). IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED ORIGINAL CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH ORIGINAL CAPITAL
SECURITIES AND EXECUTING THIS LETTER OF TRANSMITTAL OR BY DELIVERING AN AGENT'S
MESSSAGE IN LIEU THEREOF, AGREES THAT, UPON RECEIPT OF NOTICE FROM SOUTHERN,
CAPITAL OR THE TRUST OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF (I) ANY
FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN THE
PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR (II) ANY FACT WHICH CAUSES THE
PROSPECTUS TO OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE
STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING OR (III) OF THE
OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE REGISTRATION RIGHTS
AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND THE SALE OF EXCHANGE
CAPITAL SECURITIES PURSUANT TO THE PROSPECTUS UNTIL SOUTHERN, CAPITAL OR THE
TRUST HAS AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR
OMISSION AND HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO
THE PARTICIPATING BROKER-DEALER OR SOUTHERN, CAPITAL OR THE TRUST HAS GIVEN
NOTICE THAT THE SALE OF THE EXCHANGE CAPITAL SECURITIES MAY BE RESUMED, AS THE
CASE MAY BE. IF SOUTHERN, CAPITAL OR THE TRUST GIVES SUCH NOTICE TO SUSPEND THE
SALE OF THE EXCHANGE CAPITAL SECURITIES, IT SHALL EXTEND THE 90-DAY PERIOD
REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE
THE PROSPECTUS IN CONNECTION WITH THE RESALE OF EXCHANGE CAPITAL SECURITIES BY
THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING
OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL
HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO
PERMIT RESALES OF THE EXCHANGE CAPITAL SECURITIES OR TO AND INCLUDING THE DATE
ON WHICH SOUTHERN, CAPITAL OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF
EXCHANGE CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
Holders of Original Capital Securities whose Original Capital
Securities are accepted for exchange will not receive accrued interest on such
Original Capital Securities for any period from and after the last Interest
Payment Date to which interest has been paid or duly provided for on such
Original Capital Securities prior to the original issue date of the Exchange
Capital Securities or, if no such interest has been paid or duly provided for,
will not receive any accrued interest on such Original Capital Securities, and
the undersigned waives the right to receive any interest on such Original
Capital Securities accrued from and after such Interest Payment Date or, if no
such interest has been paid or duly provided for, from and after February 4,
1997.
All authority herein conferred or agreed to be conferred in this Letter
of Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
Please be advised that Southern, Capital and the Trust are making the
Exchange Offer in reliance on the position of the staff of the Division of
Corporation Finance of the Securities and Exchange Commission set forth in
certain interpretive letters addressed to third parties in other transactions.
In addition, each of Southern and Capital has authorized us to inform you as
follows: Neither Southern nor Capital has entered into any arrangement or
understanding with any person to distribute the Exchange Capital Securities to
be received in the Exchange Offer and, to the best of its information and
belief, each person participating in the Exchange Offer is acquiring the
Exchange Capital Securities in its ordinary course of business and has no
arrangement or understanding with any person to participate in the distribution
of the Exchange Capital Securities to be received in the Exchange Offer. In this
regard, Southern and Capital will make each person participating in the Exchange
Offer aware that if such person is participating in the Exchange Offer for the
purpose of distributing the Exchange Capital Securities to be acquired in the
Exchange Offer, such person (a) could not rely on the Staff position enunciated
in the interpretative letters referred to above and (b) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction. Southern and Capital acknowledge
that such a secondary resale transaction by such person participating in the
Exchange Offer for the purpose of distributing the Exchange Capital Securities
should be covered by an effective registration statement containing the selling
securityholder information required by Item 507 or 508, as applicable, of
Regulation S-K. Furthermore, Southern and Capital will include in the
transmittal letter to be executed by an exchange offeree in order to participate
in the Exchange Offer (x) an acknowledgment that if such exchange offeree is a
broker-dealer that will receive Exchange Capital Securities for its own account
in exchange for Original Capital Securities that were acquired as a result of
market-making activities or other trading activities, it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities and
(y) a statement that by so acknowledging and by delivering a prospectus, such
exchange offeree will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
<PAGE>
- -------------------------------------------------------------------------------
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
(SIGNATURE(S) OF HOLDER(S)
Dated: 1997 Must be signed by registered holder(s) exactly as name(s) appear(s)
on Certificate(s) for the Original Capital Securities hereby tendered or on a
security position listing, or by any person(s) authorized to become the
registered holder(s) by endorsements and documents transmitted herewith
(including such options of counsel, certifications and other information as may
be required by the Trust or the Trustee for the Original Capital Securities to
comply with the restrictions on transfer applicable to the Original Capital
Securities). If signature is by an attorney-in-fact, executor, administrator,
trustee, guardian, officer of a corporation or another acting in a fiduciary
capacity or representative capacity, please set forth the signer's full title.
See Instruction 5.
Name(s):
(PLEASE PRINT)
Capacity (full title):
Address:
(INCLUDE ZIP CODE)
Telephone Number:
Tax ID Number:
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
AUTHORIZED SIGNATURE
Date: 1997
Name of Firm:
Capacity (full title):
(PLEASE PRINT)
Address:
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<S> <C>
------------------------------------------------------------ ----------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, AND 6) (SEE INSTRUCTIONS 1, 5, AND 6)
To be completed ONLY if the Exchange Capital Securities are to be To be completed ONLY if Exchange Capital Securities
issued in the name of someone other than the registered holder are to be sent to someone other than the registered
of the Original Capital Securities whose name(s) appear(s) above. holder of the Original Capital Securities whose
name(s) appear(s) above, or such registered
holder(s) at an address other than that shown above.
Issue Mail
|_| Original Capital Securities not tendered to: |_| Original Capital Securities not tendered to:
|_| Exchange Capital Securities to: |_| Exchange Capital Securities to:
Name(s) Name(s)
Address Address
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
Telephone Number Telephone Number
Tax ID Number
------------------------------------------------------------ ---------------------------------------------------
</TABLE>
<PAGE>
INSTRUCTIONS
Forming part of the terms and conditions of the Exchange Offer
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES.
This Letter of Transmittal is to be completed either if (a) Certificates
are to be forwarded herewith or (b) tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in "The Exchange Offer --
Procedures for Tendering Original Capital Securities" in the Prospectus and an
Agent's Message is not delivered. Certificates, or timely confirmation of a
book-entry transfer of such Original Capital Securities into the Exchange
Agent's account at DTC, as well as this Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, and any other documents required by this Letter of Transmittal, must
be received by the Exchange Agent at any of its addresses set forth herein on or
prior to the Expiration Date. Tenders by book-entry transfer may also be made by
delivering an Agent's Message in lieu of this Letter of Transmittal. The term
"Agent's Message" means a message, transmitted by DTC to and received by the
Exchange Agent and forming a part of a book-entry confirmation, which states
that DTC has received an express acknowledgment from the DTC participant, which
acknowledgment states that such participant has received and agrees to be bound
by the Letter of Transmittal (including the representations contained herein)
and that the Trust, Capital and Southern may enforce the Letter of Transmittal
against such participant. Original Capital Securities may be tendered in whole
or in part in the liquidation amount of $100,000 (100 Original Capital
Securities) and integral multiples of $1,000 in excess thereof, provided that,
if any Original Capital Securities are tendered for exchange in part, the
untendered liquidation amount thereof must be $100,000 (100 Original Capital
Securities) or any integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Original Capital Securities and (i) whose
Original Capital Securities are not immediately available or (ii) who cannot
deliver their Original Capital Securities, this Letter of Transmittal and all
other required documents to the Exchange Agent on or prior to the Expiration
Date or (iii) who cannot complete the procedures for delivery by book-entry
transfer on a timely basis, may tender their Original Capital Securities by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedures set forth in "The Exchange Offer --
Procedures for Tendering Original Capital Securities" in the Prospectus.
Pursuant to such procedures: (A) such tender must be made by or through an
Eligible Institution (as defined below); (B) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made available
by Southern, must be received by the Exchange Agent on or prior to the
Expiration Date; and (C) the Certificates (or a book-entry confirmation (as
defined in the Prospectus)) representing all tendered Original Capital
Securities, in proper form for transfer, together with a Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent within three New York Stock
Exchange trading days after the date of execution of such Notice of Guaranteed
Delivery, all as provided in "The Exchange Offer -- Procedures for Tendering
Original Capital Securities" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Original Capital
Securities to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or
prior to the Expiration Date. As used herein and in the Prospectus, "Eligible
Institution" means a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as "an eligible guarantor institution," including (as such terms
are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither Southern, Capital nor the Trust will accept any alternative,
conditional or contingent tenders. Each tendering holder, by execution of a
Letter of Transmittal (or facsimile thereof), waives any right to receive any
notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES.
No signature guarantee on this Letter of Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this document, shall include any
participant in DTC whose name appears on a security position listing as
the owner of the Original Capital Securities) of Original Capital
Securities tendered herewith, unless such holder(s) has completed
either the box entitled "Special Issuance Instructions" or the box
entitled "Special Delivery Instructions" above, or
(ii) such Original Capital Securities are tendered for the account of a
firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE.
If the space provided in the box captioned "Description of Original Capital
Securities" is inadequate, the Certificate number(s) and/or the liquidation
amount of Original Capital Securities and any other required information should
be listed on a separate signed schedule which is attached to this Letter of
Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS.
If less than all the Original Capital Securities evidenced by any
Certificate submitted are to be tendered, fill in the liquidation amount of
Original Capital Securities which are to be tendered in the box entitled
"Liquidation Amount of Original Capital Securities Tendered (if Liquidation
Amount of Original Capital Securities is Less than All)." In such case, new
Certificate(s) for the remainder of the Original Capital Securities that were
evidenced by your old Certificate(s) will only be sent to the holder of the
Original Capital Security, promptly after the Expiration Date. All Original
Capital Securities represented by Certificates delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Original Capital Securities
may be withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written, telegraphic,
telex or facsimile transmission of such notice of withdrawal must be timely
received by the Exchange Agent at any of its addresses set forth above or in the
Prospectus on or prior to the Expiration Date. Any such notice of withdrawal
must specify the name of the person who tendered the Original Capital Securities
to be withdrawn, the aggregate liquidation amount of Original Capital Securities
to be withdrawn, and (if Certificates for Original Capital Securities have been
tendered) the name of the registered holder of the Original Capital Securities
as set forth on the Certificate for the Original Capital Securities, if
different from that of the person who tendered such Original Capital Securities.
If Certificates for the Original Capital Securities have been delivered or
otherwise identified to the Exchange Agent, then prior to the physical release
of such Certificates for the Original Capital Securities, the tendering holder
must submit the serial numbers shown on the particular Certificates for the
Original Capital Securities to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case of
Original Capital Securities tendered for the account of an Eligible Institution.
If Original Capital Securities have been tendered pursuant to the procedures for
book-entry transfer set forth in "The Exchange Offer -- Procedures for Tendering
Original Capital Securities," the notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawal of Original
Capital Securities, in which case a notice of withdrawal will be effective if
delivered to the Exchange Agent by written, telegraphic, telex or facsimile
transmission. Withdrawals of tenders of Original Capital Securities may not be
rescinded. Original Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described in the Prospectus under "The Exchange Offer -- Procedures
for Tendering Original Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by Southern, Capital and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. Southern, Capital and the Trust, any affiliates or
assigns of Southern, Capital and the Trust, the Exchange Agent or any other
person shall not be under any duty to give any notification of any
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification. Any Original Capital Securities which have been
tendered but which are withdrawn will be returned to the holder thereof without
cost to such holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered holder(s) of the
Original Capital Securities tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Original Capital Securities tendered hereby are owned of
record by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If any tendered Original Capital Securities are registered in different
name(s) on several Certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal (or facsimiles thereof) as there
are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to Southern, Capital and the Trust, in their sole discretion, of
such persons' authority to so act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Original Capital Securities listed and transmitted hereby, no endorsement(s) of
Certificate(s) or separate bond power(s) are required unless Exchange Capital
Securities are to be issued in the name of a person other than the registered
holder(s). Signature(s) on such Certificate(s) or bond power(s) must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Original Capital Securities listed, the Certificates
must be endorsed or accompanied by appropriate bond powers, signed exactly as
the name or names of the registered owner(s) appear(s) on the Certificates, and
also must be accompanied by such opinions of counsel, certifications and other
information as Southern, Capital, the Trust or the Trustee for the Original
Capital Securities may require in accordance with the restrictions on transfer
applicable to the Original Capital Securities. Signatures on such Certificates
or bond powers must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
If Exchange Capital Securities are to be issued in the name of a person
other than the signer of this Letter of Transmittal, or if Exchange Capital
Securities are to be sent to someone other than the signer of this Letter of
Transmittal or to an address other than that shown above, the appropriate boxes
on this Letter of Transmittal should be completed. Certificates for Original
Capital Securities not exchanged will be returned by mail or, if tendered by
book-entry transfer, by crediting the account indicated above maintained at DTC.
See Instruction 4.
Southern, Capital and the Trust will determine, in their sole discretion,
all questions as to the form of documents, validity, eligibility (including time
of receipt) and acceptance for exchange of any tender of Original Capital
Securities, which determination shall be final and binding on all parties.
Southern, Capital and the Trust reserve the absolute right to reject any and all
tenders determined by either of them not to be in proper form or the acceptance
of which, or exchange for, may, in the view of counsel to Southern, Capital and
the Trust, be unlawful. Southern, Capital and the Trust also reserve the
absolute right, subject to applicable law, to waive any of the conditions of the
Exchange Offer set forth in the Prospectus under "The Exchange Offer -
Conditions to the Exchange Offer" or any conditions or irregularity in any
tender of Original Capital Securities of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
Southern's, Capital's and the Trust's interpretation of the terms and conditions
of the Exchange Offer (including this Letter of Transmittal and the instructions
hereto) will be final and binding. No tender of Original Capital Securities will
be deemed to have been validly made until all irregularities with respect to
such tender have been cured or waived. Southern, Capital, the Trust, any
affiliates or assigns of Southern, Capital, the Trust, the Exchange Agent, or
any other person shall not be under any duty to give notification of any
irregularities in tenders or incur any liability for failure to give such
notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES.
Questions and requests for assistance may be directed to the Exchange Agent
at any of its addresses and telephone number set forth on the front of this
Letter of Transmittal. Additional copies of the Prospectus, the Notice of
Guaranteed Delivery and the Letter of Transmittal may be obtained from the
Exchange Agent or from your broker, dealer, commercial bank, trust company or
other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9.
Under U.S. Federal income tax law, a holder whose tendered Original Capital
Securities are accepted for exchange is required to provide the Exchange Agent
with such holder's correct taxpayer identification number ("TIN") on Substitute
Form W-9 below. If the Exchange Agent is not provided with the correct TIN, the
Internal Revenue Service (the "IRS") may subject the holder or other payee to a
$50 penalty. In addition, payments to such holders or other payees with respect
to Original Capital Securities exchanged pursuant to the Exchange Offer may be
subject to 31% backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Original Capital Securities or of the last transferee appearing on the
transfers attached to, or endorsed on, the Original Capital Securities. If the
Original Capital Securities are registered in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. NO CONDITIONAL TENDERS.
No alternative, conditional or contingent tenders will be accepted. All
tendering holders of Original Capital Securities, by execution of this Letter of
Transmittal, shall waive any right to receive notice of the acceptance of
Original Capital Securities for exchange.
Neither Southern, Capital, the Trust, the Exchange Agent nor any other
person is obligated to give notice of any defect or irregularity with respect to
any tender of Original Capital Securities nor shall any of them incur any
liability for failure to give any such notice.
11. LOST, DESTROYED OR STOLEN CERTIFICATES.
If any Certificate(s) representing Original Capital Securities have been
lost, destroyed or stolen, the holder should promptly notify the Exchange Agent.
The holder will then be instructed as to the steps that must be taken in order
to replace the Certificate(s). This Letter of Transmittal and related documents
cannot be processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
12. SECURITY TRANSFER TAXES.
Holders who tender their Original Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however,
Exchange Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Original Capital
Securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of Original Capital Securities in connection with the Exchange
Offer, then the amount of any such transfer tax (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT
ON OR PRIOR TO THE EXPIRATION DATE.
<PAGE>
(TO BE COMPLETED BY ALL TENDERING SECURITY HOLDERS)
(SEE INSTRUCTION 9)
PAYER'S NAME: BANKERS TRUST COMPANY
<PAGE>
<TABLE>
- --------------------------------------------- -------------------------------------------- ----------------------------------------
<S> <C> <C>
SUBSTITUTE FORM W-9 PART 1-- PLEASE PROVIDE YOUR TIN ON THE TIN:
LINE AT RIGHT AND CERTIFY BY SIGNING AND
DATING BELOW
Department of the Treasury Internal Revenue
Service Payor's Request for Taxpayer
Identification Number (TIM) and Social Security Number
Certification NAME
or
ADDRESS
CITY, STATE & ZIP CODE Employer Identification Number
-------------------------------------------- ----------------------------------------
-------------------------------------------------------------------------------------
PART 2
Awaiting TIN |_|
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
PART 3 - CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT (1) the
number shown on this form is my correct taxpayer identification number (or I am
waiting for a number to be issued to me), (2) I am not subject to backup withholding
either because (i) I am exempt rom backup withholding, (ii) I have not been notified
by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or (iii) the IRS has notified
me that I am no longer subject to backup withholding, and (3) any other information
provided on this form is true and correct.
SIGNATURE
DATE
You must cross out item (iii) in Part (2) above if you have been notified by the IRS
that you are subject to backup withholding because of underreporting interest or
dividends on your tax return and you have not been notified by the IRS that you are no
longer subject to backup withholding.
- --------------------------------------------- --------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID
TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
- ------------------------------------------------------------------------------------------------------------------------------------
</FN>
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
payments made to me on account of the Exchange Capital Securities shall be
retained until I provide a taxpayer identification number to the Exchange Agent
and that, if I do not provide my taxpayer identification number within 60 days,
such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding and 31% of all reportable payments made to me thereafter will
be withheld and remitted to the Internal Revenue Service until I provide a
taxpayer identification number.
Signature
Date: , 1997
- ------------------------------------------------------------------------------
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF 8.19% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
SOUTHERN COMPANY CAPITAL TRUST I
FULLY AND UNCONDITIONALLY GUARANTEED BY
THE SOUTHERN COMPANY
This Notice of Guaranteed Delivery, or one substantially equivalent to
this form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Trust's (as defined below) 8.19% Capital Securities (the
"Original Capital Securities") are not immediately available, (ii) Original
Capital Securities, the Letter of Transmittal and all other required documents
cannot be delivered to Bankers Trust Company (the "Exchange Agent") on or prior
to the Expiration Date (as defined in the Prospectus referred to below) or (iii)
the procedures for delivery by book-entry transfer cannot be completed on a
timely basis. This Notice of Guaranteed Delivery may be delivered by hand,
overnight courier or mail, or transmitted by facsimile transmission, to the
Exchange Agent. See "The Exchange Offer -- Procedures for Tendering Original
Capital Securities" in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
BANKERS TRUST COMPANY
<TABLE>
<CAPTION>
By Mail: By Hand: By Overnight Mail:
Or Courier:
<S> <C> <C>
BT SERVICES TENNESSEE, INC. BANKERS TRUST COMPANY BT SERVICES TENNESSEE, INC.
REORGANIZATION UNIT CORPORATE TRUST & AGENCY GROUP CORPORATE TRUST & AGENCY GROUP
P.O. BOX 292737 RECEIPT & DELIVERY WINDOW REORGANIZATION UNIT
NASHVILLE, TN 37229-2737 123 WASHINGTON STREET, 1ST FLOOR 648 GRASSMERE PARK ROAD
NEW YORK, NY 10006 NASHVILLE, TN 37211
FOR INFORMATION: TO CONFIRM BY TELEPHONE FACSIMILE TRANSMISSIONS:
(800) 735-7777 (615) 835-3572 (ELIGIBLE INSTITUTIONS ONLY)
(615) 835-3701
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE
TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF
A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN
"ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE
MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER
OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Southern Company Capital Trust I, a
Delaware business trust (the "Trust"), upon the terms and subject to the
conditions set forth in the Prospectus dated August 4, 1997 (as the same may be
amended or supplemented from time to time, the "Prospectus"), and the related
Letter of Transmittal (which together constitute the "Exchange Offer"), receipt
of which is hereby acknowledged, the aggregate liquidation amount of Original
Capital Securities set forth below pursuant to the guaranteed delivery
procedures set forth in the Prospectus under the caption "The Exchange Offer --
Procedures for Tendering Original Capital Securities."
Name(s) of Registered Holder(s):
Aggregate Liquidation Amount Tendered:
Certificate No(s):
Address(es):
Area Code and Telephone Number(s):
If Original Capital Securities will be tendered by book-entry transfer, provide
the following information:
Signature(s):
DTC Account Number:
Date:
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at any of its addresses set forth above, either the Original
Capital Securities tendered hereby in proper form for transfer, or confirmation
of the book-entry transfer of such Original Capital Securities to the Exchange
Agent's account at The Depositary Trust Company ("DTC"), pursuant to the
procedures for book-entry transfer set forth in the Prospectus, in either case
together with one or more properly completed and duly executed Letter(s) of
Transmittal (or facsimile thereof) and any other required documents within five
business days after the date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Original Capital Securities tendered hereby to the Exchange
Agent within the time period set forth above and that failure to do so could
result in a financial loss to the undersigned.
Name of Firm:
Authorized Signature:
Title:
Address:
Telephone Number:
Date:
NOTE: DO NOT SEND ORIGINAL CAPITAL SECURITIES WITH THIS NOTICE OF
GUARANTEED DELIVERY. ACTUAL SURRENDER OF ORIGINAL CAPITAL SECURITIES MUST BE
MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
Exhibit 99.3
EXCHANGE AGENT AGREEMENT
August __, 1997
Bankers Trust Company
Attention: Corporate Trust and Agency Group
Manager Public Utilities Group
Four Albany Street
4th Floor
New York, New York 10006
Ladies and Gentlemen:
The Southern Company, a Delaware corporation ("Southern"), Southern
Company Capital Funding, Inc., a Delaware corporation, as Sponsor ("Capital"),
and Southern Company Capital Trust I, a Delaware statutory business trust (the
"Trust"), hereby appoint Bankers Trust Company ("Bankers Trust") to act as
exchange agent (the "Exchange Agent") in connection with an exchange offer by
Southern, Capital and the Trust to exchange up to $325,000,000 aggregate
liquidation amount of the Trust's 8.19% Exchange Capital Securities (the
"Exchange Capital Securities"), which have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), for a like aggregate liquidation
amount of the Trust's outstanding 8.19% Capital Securities (the "Original
Capital Securities" and, together with the Exchange Capital Securities, the
"Capital Securities"). The terms and conditions of the exchange offer are set
forth in a Prospectus dated August 4, 1997 (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the related Letter of
Transmittal, which together constitute the "Exchange Offer." The registered
holders of the Capital Securities are hereinafter referred to as the "Holders."
Capitalized terms used herein and not defined shall have the respective meanings
ascribed thereto in the Prospectus.
On the basis of the representations, warranties and agreements of
Southern, Capital, the Trust and Bankers Trust contained herein and subject to
the terms and conditions hereof, the following sets forth the agreement among
Southern, Capital, the Trust and Bankers Trust, as Exchange Agent for the
Exchange Offer:
1. APPOINTMENT AND DUTIES AS EXCHANGE AGENT.
a. Southern, Capital and the Trust hereby authorize Bankers Trust to
act as Exchange Agent in connection with the Exchange Offer and Bankers Trust
agrees to act as Exchange Agent in connection with the Exchange Offer. As
Exchange Agent, Bankers Trust will perform those services as are outlined
herein, including accepting tenders of Original Capital Securities, and
communicating generally regarding the Exchange Offer with brokers, dealers,
commercial banks, trust companies and other persons, including Holders of the
Original Capital Securities.
b. Southern, Capital and the Trust acknowledge and agree that Bankers
Trust has been retained pursuant to this Agreement to act solely as Exchange
Agent in connection with the Exchange Offer and, in such capacity, Bankers Trust
shall perform such duties in good faith as are outlined herein.
c. Bankers Trust will examine each of the Letters of Transmittal and
certificates for Original Capital Securities and any other documents delivered
or mailed to Bankers Trust by or for Holders of the Original Capital Securities,
and any book-entry confirmations received by Bankers Trust with respect to the
Original Capital Securities, to ascertain whether:
(i) the Letters of Transmittal and any such other documents are
duly executed and properly completed in accordance with the
instructions set forth therein and that such book-entry confirmations
are in due and proper form and contain the information required to be
set forth therein,
(ii) the Original Capital Securities have otherwise been properly
tendered, and
(iii) Holders have provided their correct Tax Identification
Number or required certification.
Determination of all questions as to validity, form, eligibility and acceptance
for exchange of any Original Capital Securities shall be made by Southern,
Capital or the Trust, whose determination shall be final and binding. In each
case where the Letters of Transmittal or any other documents have been
improperly completed or executed or where book-entry confirmations are not in
due and proper form or omit certain information, or any of the certificates for
Original Capital Securities are not in proper form for transfer or some other
irregularity in connection with the tender or acceptance of the Original Capital
Securities exists, Bankers Trust will endeavor upon request of Southern, Capital
or the Trust to advise the tendering Holders of the irregularity and to take any
other action as Southern, Capital or the Trust may request to cause such
irregularity to be corrected. Notwithstanding the above, Bankers Trust shall not
be under any duty to give any notification of any irregularities in tenders or
incur any liability for failure to give any such notification.
d. With the approval of any officer of Capital or any other party
designated by any such officer of Capital (such approval, if given orally, to be
confirmed in writing), Bankers Trust is authorized to waive any irregularities
in connection with any tender of Original Capital Securities pursuant to the
Exchange Offer.
e. Tenders of Original Capital Securities may be made only as set forth
in the Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer" and Original Capital Securities shall be considered properly
tendered only when tendered in accordance with such procedures set forth
therein. Notwithstanding the provisions of this paragraph, Original Capital
Securities which any officer of Capital or any other party designated by any
such officer of Capital shall approve (such approval, if given orally, to be
confirmed in writing) as having been properly tendered shall be considered to be
properly tendered.
f. Bankers Trust shall advise Southern, Capital and the Trust with
respect to any Original Capital Securities received as soon as possible after
5:00 p.m., New York City Time, on the Expiration Date and accept its
instructions with respect to disposition of such Original Capital Securities.
g. Bankers Trust shall deliver certificates for Original Capital
Securities tendered in part to the transfer agent for split-up and shall return
any untendered Original Capital Securities or Original Capital Securities which
have not been accepted by Southern, Capital and the Trust to the Holders
promptly after the expiration or termination of the Exchange Offer.
h. Upon acceptance by Southern, Capital and the Trust of any Original
Capital Securities duly tendered pursuant to the Exchange Offer (such
acceptance, if given orally, to be confirmed in writing), Southern, Capital and
the Trust will cause Exchange Capital Securities in exchange therefor to be
issued as promptly as possible and Bankers Trust will deliver such Exchange
Capital Securities on behalf of Southern, Capital and the Trust at the rate of
$100,000 (100 Capital Securities) liquidation amount of Exchange Capital
Securities for each $100,000 liquidation amount of Original Capital Securities
tendered as promptly as possible after acceptance by Southern, Capital and the
Trust of the Original Capital Securities for exchange and notice (such notice,
if given orally, to be confirmed in writing) of such acceptance by Southern,
Capital and the Trust. Unless otherwise instructed by Southern, Capital or the
Trust, Bankers Trust shall issue Exchange Capital Securities only in
denominations of $100,000 (100 Capital Securities) or any integral multiple of
$1,000 in excess thereof.
i. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and the conditions set forth in the Prospectus and the
Letter of Transmittal, Original Capital Securities tendered pursuant to the
Exchange Offer may be withdrawn at any time on or prior to the Expiration Date
in accordance with the terms of the Exchange Offer.
j. The Trust shall not be required to exchange any Original Capital
Securities tendered if any of the conditions set forth in the Exchange Offer are
not met. Notice of any decision by Southern, Capital and the Trust not to
exchange any Original Capital Securities tendered shall be given by Southern,
Capital or the Trust either orally (if given orally, to be confirmed in writing)
or in a written notice to Bankers Trust.
k. If, pursuant to the Exchange Offer, Southern, Capital and the Trust
do not accept for exchange all or part of the Original Capital Securities
tendered because of an invalid tender, the occurrence of certain other events
set forth in the Prospectus under the caption "The Exchange Offer -- Conditions
to the Exchange Offer" or otherwise, Bankers Trust shall, upon notice from
Southern, Capital or the Trust (such notice, if given orally, to be confirmed in
writing), promptly after the expiration or termination of the Exchange Offer
return such certificates for unaccepted Original Capital Securities (or effect
appropriate book-entry transfer), together with any related required documents
and the Letters of Transmittal relating thereto that are in Bankers Trust's
possession, to the persons who deposited such certificates.
l. Certificates for reissued Original Capital Securities, unaccepted
Original Capital Securities or Exchange Capital Securities shall be forwarded by
(a) first-class certified mail, return receipt requested under a blanket surety
bond obtained by Bankers Trust protecting Bankers Trust, Southern, Capital and
the Trust from loss or liability arising out of the non-receipt or non-delivery
of such certificates or (b) by registered mail insured by Bankers Trust
separately for the replacement value of each such certificate.
m. Bankers Trust is not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker, dealer, commercial
bank, trust company or other nominee or to engage or use any person to solicit
tenders.
n. As Exchange Agent, Bankers Trust:
(i) shall have no duties or obligations other than those
specifically set forth herein or as may be subsequently agreed to in
writing;
(ii) will make no representations and will have no
responsibilities as to the validity, value or genuineness of any of
the certificates for the Original Capital Securities deposited
pursuant to the Exchange Offer, and will not be required to and will
make no representation as to the validity, value or genuineness of the
Exchange Offer;
(iii) shall not be obligated to take any legal action hereunder
which might in Bankers Trust's reasonable judgment involve any expense
or liability, unless Bankers Trust shall have been furnished with
indemnity reasonably satisfactory to it and additional fees for the
taking of such action;
(iv) may reasonably rely on and shall be protected in acting
in reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to Bankers Trust and
reasonably believed by Bankers Trust to be genuine and to have been
signed by the proper party or parties;
(v) may reasonably act upon any tender, statement, request,
comment, agreement or other instrument whatsoever not only as to its
due execution and validity and effectiveness of its provisions, but
also as to the truth and accuracy of any information contained therein,
which Bankers Trust believes in good faith to be genuine and to have
been signed or represented by a proper person or persons acting in a
fiduciary or representative capacity;
(vi) may rely on and shall be protected in acting upon written
or oral instructions from any officer of Capital or any other party
designated by any such officer of Capital;
(vii) may consult with its own counsel with respect to any
questions relating to Bankers Trust's duties and responsibilities and
the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by Bankers Trust hereunder in good faith and in accordance with
the advice of such counsel; and
(viii) shall not advise any person tendering Original Capital
Securities pursuant to the Exchange Offer as to whether to tender or
refrain from tendering all or any portion of its Original Capital
Securities or as to the market value, decline or appreciation in market
value of any Original Capital Securities that may or may not occur as a
result of the Exchange Offer or as to the market value of the Exchange
Capital Securities.
p. Bankers Trust shall take such action as may from time to time be
requested by Southern, Capital or the Trust to furnish copies of the Prospectus,
Letter of Transmittal and the Notice of Guaranteed Delivery or such other forms
as may be approved from time to time by Southern, Capital and the Trust, to all
persons requesting such documents and to accept and comply with telephone
requests for information relating to the Exchange Offer. Southern, Capital and
the Trust will furnish Bankers Trust with copies of such documents at its
request.
q. Bankers Trust shall advise orally and promptly thereafter confirm in
writing to Southern, Capital and the Trust and such other person or persons as
Southern, Capital and the Trust may request, daily (and more frequently during
the week immediately preceding the Expiration Date and if otherwise reasonably
requested) up to and including the Expiration Date, the aggregate liquidation
amount of Original Capital Securities which have been tendered pursuant to the
terms of the Exchange Offer and the items received by Bankers Trust pursuant to
the Exchange Offer and this Agreement. In addition, Bankers Trust will also
provide, and cooperate in making available to Southern, Capital and the Trust,
or any such other person or persons upon request made from time to time, such
other information in its possession as Southern, Capital and the Trust may
reasonably request. Such cooperation shall include, without limitation, the
granting by Bankers Trust to Southern, Capital and the Trust, and such person or
persons as Southern, Capital and the Trust may request, access to those persons
on Bankers Trust's staff who are responsible for receiving tenders, in order to
ensure that immediately prior to the Expiration Date Southern, Capital and the
Trust shall have received adequate information in sufficient detail to enable
Southern, Capital and the Trust to decide whether to extend the Exchange Offer.
Bankers Trust shall prepare a final list of all persons whose tenders were
accepted, the aggregate liquidation amount of Original Capital Securities
tendered, the aggregate liquidation amount of Original Capital Securities
accepted and deliver said list to Southern, Capital and the Trust.
r. Letters of Transmittal, book-entry confirmations and Notices of
Guaranteed Delivery shall be stamped by Bankers Trust as to the date and the
time of receipt thereof and shall be preserved by Bankers Trust for a period of
time at least equal to the period of time Bankers Trust preserves other records
pertaining to the transfer of securities, or one year, whichever is longer, and
thereafter shall be delivered by Bankers Trust to Southern, Capital and the
Trust. Bankers Trust shall dispose of unused Letters of Transmittal and other
surplus materials by returning them to Southern, Capital or the Trust.
s. Bankers Trust hereby expressly waives any lien, encumbrance or right
of set-off whatsoever that Bankers Trust may have with respect to any funds
deposited with it for the payment of transfer taxes by reason of amounts, if
any, borrowed by Southern, Capital or the Trust, or any of its or their
subsidiaries or affiliates pursuant to any loan or credit agreement with Bankers
Trust or for compensation owed to Bankers Trust hereunder or for any other
matter.
2. COMPENSATION.
For services rendered as Exchange Agent hereunder, Bankers Trust shall
be entitled to such reasonable compensation as shall be agreed to by Southern.
3. INDEMNIFICATION.
Southern, Capital and the Trust hereby agree to indemnify the Exchange
Agent for, and to hold it harmless against, any loss, liability or expense
incurred without negligence, bad faith or willful misconduct on its part arising
out of or in connection with the acceptance or administration of this Agreement
and the performance of its duties hereunder, including the costs and expenses of
defending itself against any claim of liability in connection with the exercise
or performance of any of its powers or duties hereunder. This indemnification
shall survive the termination of this Agreement pursuant to Section 10 hereof.
4. GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York applicable to contracts executed in and to be
performed in that state.
5. NOTICES.
Any communication or notice provided for hereunder shall be in writing
and shall be given (and shall be deemed to have been given upon receipt) by
delivery in person, telecopy, or overnight delivery or by registered or
certified mail (postage prepaid, return receipt requested) to the applicable
party at the addresses indicated below:
If to Southern: The Southern Company
270 Peachtree Street, N.W.
Atlanta, Georgia 30303
Attn: Tommy Chisholm, Secretary
Telephone: (770) 393-0650
Facsimile: (404) 506-0544
If to Capital: Southern Company Capital Funding, Inc.
64 Perimeter Center East
Atlanta, Georgia 30346
Attn: Richard Childs, Assistant Secretary
Telephone: (770) 393-0650
Facsimile: (770) 821-2894
If to Bankers Trust: Bankers Trust Company
Four Albany Street
4th Floor
New York, New York 10006
Telephone: (212) 250-6826
Facsimile: (212) 250-6725
If to the Trust: Southern Company Capital Trust I
64 Perimeter Center East
Atlanta, Georgia 30346
Attn: Richard Childs, Administrative Trustee
Telephone: (770) 393-0650
Facsimile: (770) 821-2894
or, as to each party, at such other address as shall be designated by such party
in a written notice complying as to delivery with the terms of this Section.
6. PARTIES IN INTEREST.
This Agreement shall be binding upon and inure solely to the benefit of
each party hereto and nothing in this Agreement, express or implied, is intended
to or shall confer upon any other person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement. Without limitation to
the foregoing, the parties hereto expressly agree that no holder of Original
Capital Securities or Exchange Capital Securities shall have any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
7. COUNTERPARTS; SEVERABILITY.
This Agreement may be executed in one or more counterparts, and by
different parties hereto on separate counterparts, each of which when so
executed shall be deemed an original, and all of such counterparts shall
together constitute one and the same agreement. If any term or other provision
of this Agreement or the application thereof is invalid, illegal or incapable of
being enforced by any rule of law, or public policy, all other provisions of
this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the agreements contained herein is not affected
in any manner adverse to any party. Upon such determination that any term or
provision or the application thereof is invalid, illegal or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the agreements contained herein may be performed
as originally contemplated to the fullest extent possible.
8. CAPTIONS.
The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
9. ENTIRE AGREEMENT; AMENDMENT.
This Agreement constitutes the entire understanding of the parties
hereto with respect to the subject matter hereof. This Agreement may not be
amended or modified nor may any provision hereof be waived except in writing
signed by each party to be bound thereby.
10. TERMINATION.
This Agreement shall terminate upon the earliest of (a) the 90th day
following the expiration, withdrawal, or termination of the Exchange Offer, (b)
the close of business on the date of actual receipt of written notice by Bankers
Trust from Southern, Capital and the Trust stating that this Agreement is
terminated, (c) one year following the date of this Agreement, or (d) the time
and date on which this Agreement shall be terminated by mutual consent of the
parties hereto.
11. MISCELLANEOUS.
Bankers Trust hereby acknowledges receipt of the Prospectus and the
Letter of Transmittal and the Notice of Guaranteed Delivery and further
acknowledges that it has examined each of them. Any inconsistency between this
Agreement, on the one hand, and the Prospectus and the Letter of Transmittal and
the Notice of Guaranteed Delivery (as they may be amended or supplemented from
time to time), on the other hand, shall be resolved in favor of the latter three
documents, except with respect to the duties, liabilities and indemnification of
Bankers Trust as Exchange Agent which shall be controlled by this Agreement.
Kindly indicate your willingness to act as Exchange Agent and Bankers Trust's
acceptance of the foregoing provisions by signing in the space provided below
for that purpose and returning to Southern a copy of this Agreement so signed,
whereupon this Agreement and Bankers Trust's acceptance shall constitute a
binding agreement among Bankers Trust, Southern, Capital and the Trust.
Very truly yours,
THE SOUTHERN COMPANY
By:___________________________
Name:
Title:
SOUTHERN COMPANY CAPITAL FUNDING, INC.
By:___________________________
Name:
Title:
SOUTHERN COMPANY CAPITAL TRUST I
By:___________________________
Name:
Title:
Accepted as of the date first above written:
BANKERS TRUST COMPANY,
as Exchange Agent
By:___________________________
Name:
Title:
