SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 18, 1998
THE SOUTHERN COMPANY
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(Exact name of registrant as specified in its charter)
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Delaware 1-3526 58-0690070
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(State or other jurisdiction (Commission File (IRS Employer Identification
of incorporation) Number) No.)
270 Peachtree Street, NW, Atlanta, Georgia 30303
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 393-0650
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N/A
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events.
On June 18, 1998, The Southern Company ("Southern"), Southern Company
Capital Funding, Inc. ("Capital") and Southern Company Capital Trust IV (the
"Trust") entered into an Underwriting Agreement covering the issue and sale by
the Trust of 8,000,000 7 1/8% Trust Originated Preferred Securities (liquidation
amount $25 per Preferred Security). Said Preferred Securities were registered
under the Securities Act of 1933, as amended, pursuant to the registration
statement (Registration Statement Nos. 333-50659, 333-50659-01 and 333-50659-02)
of the Company, Capital and the Trust.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
1 Underwriting Agreement, dated June 18, 1998, among the
Company, Capital, the Trust and Merrill Lynch & Co., as
Representative for the Underwriters named in Schedule I
thereto.
4.2 Second Supplemental Indenture dated as of June 25, 1998,
providing for the issuance of the Company's Series D 7 1/8%
Junior Subordinated Notes due June 30, 2038.
4.5 Amended and Restated Trust Agreement of Southern Company
Capital Trust IV.
4.6 Form of Preferred Security of Southern Company Capital Trust
IV (included in Exhibit 4.5 above).
4.7 Form of Series D 7 1/8% Junior Subordinated Note (included in
Exhibit 4.2 above).
4.8 Preferred Securities Guarantee of Southern relating to the
Preferred Securities.
4.9 Agreement as to Expenses and Liabilities relating to Southern
Company Capital Trust IV (included in Exhibit 4.5 above).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: June 25, 1998 THE SOUTHERN COMPANY
By /s/Patricia Roberts
Patricia Roberts
Assistant Secretary
Exhibit 1
8,000,000
PREFERRED SECURITIES
SOUTHERN COMPANY CAPITAL TRUST IV
(a Delaware Statutory Business Trust)
7-1/8% Trust Originated Preferred Securities
(Liquidation Amount $25 Per Preferred Security)
UNDERWRITING AGREEMENT
June 18, 1998
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Goldman, Sachs & Co.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
The Robinson-Humphrey Company, LLC
Smith Barney Inc.
As Representatives of the several Underwriters named in Schedule I hereto c/o
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Southern Company Capital Trust IV (the "Trust"), a statutory
business trust organized under the Business Trust Act (the "Delaware Act") of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C.
(ss.) 3801 et seq.), Southern Company Capital Funding, Inc., a Delaware
corporation ("SoCo Capital"), and The Southern Company, a Delaware corporation
(the "Company" and, together with the Trust and SoCo Capital, the "Offerors"),
confirm their agreement (the "Agreement") with you and each of the other
Underwriters named in Schedule I hereto (collectively, the "Underwriters", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom you are acting as Representatives (in such
capacity, you shall hereinafter be referred to as the "Representatives"), with
respect to the sale by the Trust and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of 7-1/8% Trust Originated
Preferred Securities (liquidation amount $25 per Preferred Security) of the
Trust ("Preferred Securities") set forth in Schedule I. The Preferred Securities
will be guaranteed by the Company with respect to distributions and payments
upon liquidation, redemption and otherwise (the "Preferred Securities
Guarantee") pursuant to the Preferred Securities Guarantee Agreement (the
"Preferred Securities Guarantee Agreement"), dated as of June 1, 1998, between
the Company and Bankers Trust Company, as trustee (the "Preferred Securities
Guarantee Trustee"). The Preferred Securities and the related Preferred
Securities Guarantee are referred to herein as the "Securities."
The Offerors understand that the Underwriters propose to make
a public offering of the Preferred Securities as soon as the Representatives
deem advisable after this Agreement has been executed and delivered.
The entire proceeds from the sale of the Securities will be
combined with the entire proceeds from the sale by the Trust to SoCo Capital of
its common securities (the "Common Securities") and will be used by the Trust to
purchase the $206,186,000 aggregate principal amount of 7-1/8% Junior
Subordinated Notes, due June 30, 2028 (the "Junior Subordinated Notes") to be
issued by SoCo Capital. The Junior Subordinated Notes will be guaranteed by the
Company with respect to interest and principal, including payments on
acceleration, redemption and otherwise (the "Notes Guarantee") pursuant to the
terms of the Indenture.
The Preferred Securities and the Common Securities will be
issued pursuant to the Amended and Restated Trust Agreement, dated as of June 1,
1998 (the "Trust Agreement"), among SoCo Capital, as Depositor, Wayne Boston and
Richard A. Childs (the "Administrative Trustees"), Bankers Trust (Delaware), a
Delaware banking corporation (the "Delaware Trustee") and Bankers Trust Company,
a New York banking corporation (the "Property Trustee" and, together with the
Delaware Trustee and the Administrative Trustees, the "Trustees"), as trustees,
and the holders from time to time of undivided beneficial interests in the
assets of the Trust. The Junior Subordinated Notes will be issued pursuant to an
indenture, dated as of June 1, 1997, as supplemented and amended (the "Base
Indenture"), between SoCo Capital and Bankers Trust Company, as trustee (the
"Debt Trustee"), and a second supplemental indenture to the Base Indenture,
dated as of June 25, 1998 (the "Supplemental Indenture," and together with the
Base Indenture and any other amendments or supplements thereto, the
"Indenture"), among SoCo Capital, the Company and the Debt Trustee.
The Company and the Trust will enter into an Agreement as to
Expenses and Liabilities dated as of June 1, 1998 (the "Agreement as to Expenses
and Liabilities"). Pursuant to the Agreement as to Expenses and Liabilities, the
Company will guarantee to each person or entity to whom the Trust may be
indebted or liable, the full payment of such obligations.
<PAGE>
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Offerors
jointly and severally represent and warrant to each Underwriter as follows:
(a) A registration statement on Form S-3, as amended (File
Nos. 333-50659, 333-50659-01 and 333-50659-02), in respect of the
Preferred Securities, the Preferred Securities Guarantee, the Notes
Guarantee and the Junior Subordinated Notes has been prepared and filed
in accordance with the provisions of the Securities Act of 1933, as
amended (the "Securities Act"), with the Securities and Exchange
Commission (the "Commission"); such registration statement, as it may
have been amended through the time the same first became effective (the
"Effective Date"), including the financial statements, the documents
incorporated or deemed incorporated therein by reference, pursuant to
Item 12 of Form S-3 under the 1933 Act, the exhibits thereto and the
information deemed to be part thereof pursuant to Rule 430A(b) of the
rules and regulations of the Commission under the 1933 Act, being
herein called the "Registration Statement", the prospectus included in
the Registration Statement on the Effective Date that omits the
information, if any, deemed to be a part thereof pursuant to Rule
430A(b) of the rules and regulations of the Commission under the 1933
Act, being herein called the "Preliminary Prospectus", and the
prospectus, including the price and terms of the offering, the interest
rate, maturity date and certain other information filed with the
Commission in accordance with Rule 430A and pursuant to Rule 424(b) of
the rules and regulations of the Commission under the 1933 Act,
including all documents then incorporated or deemed to have been
incorporated therein by reference, being herein called the
"Prospectus." The Registration Statement has been declared effective by
the Commission and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been initiated or, to the best knowledge of the Company,
threatened by the Commission. Any reference herein to the Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to the Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in the Preliminary Prospectus or
the Prospectus, as the case may be.
(b) The documents incorporated by reference in the
Registration Statement or Prospectus, when they were filed with the
Commission, complied in all material respects with the applicable
provisions of the Exchange Act and the rules and regulations of the
Commission thereunder, and as of such time of filing, when read
together with the Prospectus, none of such documents contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents are filed with the Commission, will comply
in all material respects with the applicable provisions of the Exchange
Act and the rules and regulations of the Commission thereunder and,
when read together with the Prospectus as it otherwise may be amended
or supplemented, will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
neither the Trust, SoCo Capital nor the Company makes any warranty or
representation to any Underwriter with respect to: (A) any statements
or omissions made in reliance upon and in conformity with information
furnished in writing to the Trust, SoCo Capital or the Company by an
Underwriter through you expressly for use in the Preliminary Prospectus
or the Prospectus; or (B) any information set forth in the Preliminary
Prospectus or the Prospectus under the caption "Description of the
Preferred Securities--Book Entry Only Issuance -- The Depository Trust
Company."
(c) The Registration Statement, at the Effective Date, and the
Preliminary Prospectus, when delivered to the Underwriters for their
use in marketing the Preferred Securities, complied and the Prospectus,
at the time it was filed pursuant to Rule 424(b) under the Securities
Act and at the Closing Date, will comply, in all material respects, in
form and substance, with the applicable provisions of the Securities
Act, the Exchange Act, the Trust Indenture Act of 1939, as amended (the
"TIA") and the rules and regulations of the Commission thereunder. The
Registration Statement, at the Effective Date, did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; the Prospectus, at the time it was
filed pursuant to Rule 424(b) under the Securities Act and at the
Closing Date, will not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein in the light of the circumstances under which they
were made not misleading; except that neither the Company, SoCo Capital
nor the Trust makes any warranties or representations with respect to
(A) that part of the Registration Statement which shall constitute the
Statements of Eligibility (Form T-1) (collectively, the "Form T-1")
under the TIA, (B) statements or omissions made in the Registration
Statement or the Prospectus in reliance upon and in conformity with
information furnished in writing to the Trust, SoCo Capital or the
Company by an Underwriter expressly for use therein or (C) any
information set forth in the Prospectus under the caption "Description
of the Preferred Securities--Book-Entry Only Issuance -- The Depository
Trust Company".
(d) With respect to the Registration Statement, the conditions
for use of Form S-3, as set forth in the General Instructions thereof,
have been satisfied.
(e) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, there has been no material adverse change in
the business, properties or financial condition of the Company.
(f) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, there has not been any material adverse
change or, to the best of the Company's knowledge, any development
involving a prospective material adverse change in or affecting the
business, properties or financial condition of the Trust (it being
understood that any such change involving only the Company shall not
constitute such a change with respect to the Trust).
(g) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, there has not been any material adverse
change or, to the best of the Company's knowledge, any development
involving a prospective material adverse change in or affecting the
business, properties or financial condition of SoCo Capital (it being
understood that any such change involving only the Company shall not
constitute such a change with respect to SoCo Capital).
(h) The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the
State of Delaware, and has due corporate authority to conduct the
business in which it is engaged and to own and operate the properties
used by it in such business, to enter into and perform its obligations
under this Agreement, the Indenture and the Preferred Securities
Guarantee Agreement and to issue and deliver the Preferred Securities
Guarantee and the Notes Guarantee.
(i) SoCo Capital has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the
State of Delaware and has due corporate authority to conduct its
business, as described in the Registration Statement and the
Prospectus, to enter into and perform its obligations under this
Agreement, the Trust Agreement and the Indenture and to purchase, own
and hold the Common Securities issued by the Trust and to issue the
Junior Subordinated Notes.
(j) The Trust has been duly created and is validly existing
and in good standing as a business trust under the Delaware Act with
the power and authority to own property and to conduct its business as
described in the Registration Statement and the Prospectus and to enter
into and perform its obligations under this Agreement and the Trust
Agreement; the Trust is duly qualified to transact business as a
foreign company and is in good standing in any other jurisdiction in
which such qualification is necessary, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the Trust; the Trust is not a party to or otherwise
bound by any agreement other than those described in the Prospectus;
the Trust is and will be classified for United States federal income
tax purposes as a grantor trust and not as an association taxable as a
corporation; and the Trust is and will be treated as a consolidated
subsidiary of the Company pursuant to generally accepted accounting
principles.
(k) The Common Securities have been duly authorized by the
Trust Agreement and, when issued and delivered by the Trust to SoCo
Capital against payment therefor as described in the Registration
Statement and the Prospectus, will be validly issued and (subject to
the terms of the Trust Agreement) fully paid and non-assessable
undivided beneficial interests in assets of the Trust and will conform
in all material respects to all statements relating thereto contained
in the Prospectus; the issuance of the Common Securities is not subject
to preemptive or other similar rights; and, on the Closing Date (as
defined herein), all of the issued and outstanding Common Securities of
the Trust will be directly owned by SoCo Capital, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equitable right.
(l) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
(m) The Trust Agreement has been duly authorized by SoCo
Capital and, on the Closing Date, will have been duly executed and
delivered by SoCo Capital and the Administrative Trustees, and assuming
due authorization, execution and delivery of the Trust Agreement by the
Delaware Trustee and the Property Trustee, the Trust Agreement will, on
the Closing Date, be a valid and binding obligation of SoCo Capital and
the Administrative Trustees, enforceable against SoCo Capital and the
Administrative Trustees in accordance with its terms, except to the
extent that enforcement thereof may be limited by (1) bankruptcy,
insolvency, reorganization, receivership, liquidation, fraudulent
conveyance, moratorium or other similar laws affecting creditors'
rights generally or (2) general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in equity)
(the "Enforceability Exceptions") and will conform in all material
respects to all statements relating thereto in the Prospectus; and on
the Closing Date, the Trust Agreement will have been duly qualified
under the TIA.
(n) The Preferred Securities Guarantee Agreement and the
Agreement as to Expenses and Liabilities have been duly authorized by
the Company and, on the Closing Date, will have been duly executed and
delivered by the Company, and, assuming due authorization, execution
and delivery of the Preferred Securities Guarantee Agreement and the
Agreement as to Expenses and Liabilities by the other respective
parties thereto, the Preferred Securities Guarantee Agreement and the
Agreement as to Expenses and Liabilities will, on the Closing Date,
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms except to the extent
that enforcement thereof may be limited by the Enforceability
Exceptions, and each of the Preferred Securities Guarantee, the
Agreement as to Expenses and Liabilities and the Preferred Securities
Guarantee Agreement will conform in all material respects to all
statements relating thereto contained in the Prospectus, and, on the
Closing Date, the Preferred Securities Guarantee Agreement will have
been duly qualified under the TIA.
(o) The Preferred Securities have been duly authorized by the
Trust Agreement and, when issued and delivered by the Trust pursuant to
this Agreement against payment of the consideration set forth herein,
will be validly issued and (subject to the terms of the Trust
Agreement) fully paid and non-assessable undivided beneficial interests
in the assets of the Trust, will be entitled to the benefits of the
Trust Agreement and will conform in all material respects to all
statements relating thereto contained in the Prospectus, the issuance
of the Preferred Securities is not subject to preemptive or other
similar rights; (subject to the terms of the Trust Agreement) holders
of Preferred Securities will be entitled to the same limitation of
personal liability under Delaware law as extended to stockholders of
private corporations for profit.
(p) The Indenture has been duly authorized by SoCo Capital and
the Company and, on the Closing Date, will have been duly executed and
delivered by SoCo Capital and the Company, and, assuming due
authorization, execution and delivery of the Indenture by the Debt
Trustee, the Indenture will, on the Closing Date, constitute a valid
and binding obligation of each of SoCo Capital and the Company,
enforceable against each in accordance with its terms except to the
extent that enforcement thereof may be limited by the Enforceability
Exceptions; the Indenture will conform in all material respects to all
statements relating thereto contained in the Prospectus; and on the
Closing Date, the Indenture will have been duly qualified under the
TIA.
(q) The issuance and delivery of the Junior Subordinated Notes
have been duly authorized by SoCo Capital and, on the Closing Date, the
Junior Subordinated Notes will have been duly executed by SoCo Capital
and, when authenticated in the manner provided for in the Indenture and
delivered against payment therefor as described in the Prospectus, will
constitute valid and legally binding obligations of SoCo Capital,
enforceable against SoCo Capital in accordance with their terms, except
to the extent that enforcement thereof may be limited by the
Enforceability Exceptions, will be in the form contemplated by, and
entitled to the benefits of, the Indenture and will conform in all
material respects to all statements relating thereto in the Prospectus.
(r) The Company's obligations under the Preferred Securities
Guarantee (i) are subordinate and junior in right of payment to all
liabilities of the Company, except those obligations or liabilities
made pari passu or subordinate by their terms, (ii) are pari passu with
the preferred stock that may be issued by the Company and (iii) are
senior to all common stock of the Company.
(s) The Junior Subordinated Notes are subordinated and junior
in right of payment to all "Senior Indebtedness" (as defined in the
Indenture) of SoCo Capital.
(t) The Notes Guarantee is subordinate and junior to all
"Senior Indebtedness" (as defined in the Indenture") of the Company.
(u) Each of the Administrative Trustees of the Trust has been
duly authorized by the Company to execute and deliver the Trust
Agreement.
(v) Neither the Trust, the Company nor SoCo Capital nor any of
the Company's other subsidiaries is and, after giving effect to the
offering and sale of the Preferred Securities, will be an "investment
company" or an entity "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the
"1940 Act").
(w) The execution, delivery and performance by the Offerors of
this Agreement and by the Trust and SoCo Capital of the Trust
Agreement, the Preferred Securities, the Common Securities, the Junior
Subordinated Notes, and by SoCo Capital and the Company of the
Indenture, and by the Company of the Preferred Securities Guarantee
Agreement, the Agreement as to Expenses and Liabilities, the Preferred
Securities Guarantee and the Notes Guarantee and the consummation by
the Offerors of the transactions contemplated herein and therein and
compliance by the Offerors with their respective obligations hereunder
and thereunder shall have been duly authorized by all necessary action
(corporate or otherwise) on the part of the Offerors and do not and
will not result in any violation of the charter or bylaws of the
Company, SoCo Capital or the Trust Agreement or related Certificate of
Trust and do not and will not conflict with, or result in a breach of
any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Trust, SoCo Capital or the Company
under (A) any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument to which the Trust, SoCo Capital
or the Company is a party or by which any of them may be bound or to
which any of their properties may be subject (except for conflicts,
breaches or defaults which would not, individually or in the aggregate,
be materially adverse to the Trust, SoCo Capital or the Company or
materially adverse to the transactions contemplated by this Agreement),
or (B) any existing applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or court,
domestic or foreign, or any regulatory body or administrative agency or
other governmental body having jurisdiction over the Trust, SoCo
Capital or the Company, or any of their respective properties.
(x) No authorization, approval, consent or order of any court
or governmental authority or agency is necessary in connection with the
issuance and sale of the Common Securities or the offering of the
Preferred Securities, the Junior Subordinated Notes, the Preferred
Securities Guarantee or the Notes Guarantee or the transactions
contemplated in this Agreement, except (A) such as may be required
under the Securities Act or the rules and regulations thereunder; (B)
such as may be required under the Public Utility Holding Company Act of
1935, as amended (the "1935 Act"); (C) the qualification of the Trust
Agreement, the Preferred Securities Guarantee Agreement and the
Indenture under the TIA; and (D) such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Trust
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Trust, at
the price per security set forth in Schedule II hereto, the number of Preferred
Securities set forth in Schedule I opposite the name of such Underwriter, plus
any additional number of Preferred Securities that such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) The purchase price per Preferred Security to be paid by
the several Underwriters for the Preferred Securities shall be an amount equal
to the initial public offering price set forth on Schedule II, which is a fixed
price determined by agreement between the Representatives and the Offerors. As
compensation to the Underwriters for their commitments hereunder and in view of
the fact that the proceeds of the sale of the Preferred Securities will be used
to purchase the Junior Subordinated Notes of the Company, the Company hereby
agrees to pay on the Closing Date (as defined below) to the Representatives, for
the accounts of the several Underwriters, a commission per Preferred Security as
set forth on Schedule II for the Preferred Securities to be delivered by the
Trust hereunder on the Closing Date.
(c) Payment of the purchase price for, and delivery of
certificates for, the Preferred Securities shall be made at the offices of
Troutman Sanders, LLP, 600 Peachtree Street, N.E., Atlanta, Georgia at 10:00
A.M., New York time, on June 25, 1998 (unless postponed in accordance with the
provisions of Section 10) or such other time, place or date as shall be agreed
upon by the Representatives, the Trust, SoCo Capital and the Company (such time
and date of payment and delivery being herein called the "Closing Date").
Payment shall be made to the Trust, by wire transfer in federal funds at the
Closing Date, against delivery to Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("ML") for the respective accounts of the Underwriters of
certificates for the Preferred Securities to be purchased by them. Certificates
for the Preferred Securities shall be in such denominations and registered in
such names as the Representatives may request in writing at least two business
days before the Closing Date. It is understood that each Underwriter has
authorized ML, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Preferred Securities which it has agreed
to purchase. ML, individually and not as representatives of the Underwriters,
may (but shall not be obligated to) make payment of the purchase price for the
Preferred Securities to be purchased by any Underwriter whose funds have not
been received by the Closing Date, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) The Preferred Securities will be represented by a global
certificate in definitive form and registered in the name of Cede & Co., as
nominee of The Depository Trust Company ("DTC"). The certificate evidencing the
Preferred Securities shall be delivered to ML through the facilities of DTC in
New York, New York for the accounts of the several Underwriters.
(e) On the Closing Date, the Company will pay, or cause to be
paid, the commission payable at such time to the Underwriters under Section 2(b)
hereof by wire transfer to ML in federal funds.
SECTION 3. COVENANTS OF THE OFFERORS. Each of the Offerors
jointly and severally covenants with each Underwriter as follows:
(a) The Offerors, on or prior to the Closing Date, will
deliver to the Underwriters conformed copies of the Registration
Statement as originally filed and of all amendments thereto, heretofore
or hereafter made, including any post-effective amendment (in each case
including all exhibits filed therewith, and including unsigned copies
of each consent and certificate included therein or filed as an exhibit
thereto, except exhibits incorporated by reference, unless specifically
requested). As soon as the Company is advised thereof, it will advise
ML orally of the issuance of any stop order under the Securities Act
with respect to the Registration Statement, or the institution of any
proceedings therefor, of which the Company shall have received notice,
and will use its best efforts to prevent the issuance of any such stop
order and to secure the prompt removal thereof, if issued. The Offerors
will deliver to the Underwriters sufficient conformed copies of the
Registration Statement, the Preliminary Prospectus and the Prospectus
and of all supplements and amendments thereto (in each case without
exhibits) for distribution to each Underwriter and, from time to time,
as many copies of the Prospectus, the Preliminary Prospectus and the
Prospectus as the Underwriters may reasonably request for the purposes
contemplated by the Securities Act or the Exchange Act.
(b) The Offerors will furnish the Underwriters with copies of
each amendment and supplement to the Preliminary Prospectus and the
Prospectus relating to the offering of the Preferred Securities in such
quantities as the Underwriters may from time to time reasonably
request. If, during the period (not exceeding nine months) when the
delivery of a prospectus shall be required by law in connection with
the sale of any Preferred Securities by an Underwriter or dealer, any
event relating to or affecting the Company, or of which the Company
shall be advised in writing by the Underwriters, shall occur, which in
the opinion of the Company or of Underwriters' counsel should be set
forth in a supplement to or an amendment of the Preliminary Prospectus
or the Prospectus, as the case may be, in order to make the Preliminary
Prospectus or the Prospectus not misleading in the light of the
circumstances when it is delivered, or if for any other reason it shall
be necessary during such period to amend or supplement the Preliminary
Prospectus or the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Preliminary Prospectus or the
Prospectus in order to comply with the Securities Act or the Exchange
Act, the Company forthwith will (i) notify the Underwriters to suspend
solicitation of purchases of the Preferred Securities and (ii) at its
expense, make any such filing or prepare and furnish to the
Underwriters a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Preliminary Prospectus
or the Prospectus which will supplement or amend the Preliminary
Prospectus or the Prospectus so that, as supplemented or amended, it
will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Preliminary
Prospectus or the Prospectus is delivered, not misleading or which will
effect any other necessary compliance. In case any Underwriter is
required to deliver a prospectus in connection with the sale of any
Preferred Securities after the expiration of the period specified in
the preceding sentence, the Company, upon the request of such
Underwriter, will furnish to such Underwriter, at the expense of such
Underwriter, a reasonable quantity of a supplemented or amended
prospectus, or supplements or amendments to the Prospectus, complying
with Section 10(a) of the Securities Act. During the period specified
in the second sentence of this subsection, the Company will continue to
prepare and file with the Commission on a timely basis all documents or
amendments required under the Exchange Act and the rules and
regulations thereunder; provided, that the Company shall not file such
documents or amendments without also furnishing copies thereof prior to
such filing to the Representatives and Dewey Ballantine LLP.
(c) The Offerors will endeavor, in cooperation with the
Underwriters, to qualify the Preferred Securities and, to the extent
required or advisable, the Preferred Securities Guarantee and the
Junior Subordinated Notes, for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the
United States as the Representatives may designate; provided, however,
that none of the Offerors shall be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to
file a consent to service of process or to file annual reports or to
comply with any other requirements in connection with such
qualification deemed by the Company to be unduly burdensome.
(d) The Company will make generally available to its security
holders as soon as practicable but not later than 45 days after the
close of the period covered thereby, an earning statement of the
Company (in form complying with the provisions of Rule 158 of the rules
and regulations under the Securities Act) covering a twelve-month
period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in Rule 158) of
the Registration Statement.
(e) The Offerors will use best efforts to effect the listing
of the Preferred Securities on the New York Stock Exchange; if the
Preferred Securities are exchanged for Junior Subordinated Notes, the
Company will use its best efforts to effect the listing of the Junior
Subordinated Notes on any exchange on which the Preferred Securities
are then listed.
(f) During a period of 15 days from the date of this
Agreement, neither the Trust, SoCo Capital nor the Company will,
without the ML's prior written consent, directly or indirectly, sell,
offer to sell, grant any option for the sale of, or otherwise dispose
of, any Preferred Securities, any security convertible into or
exchangeable into or exercisable for Preferred Securities or the Junior
Subordinated Notes or any debt securities substantially similar to the
Junior Subordinated Notes or equity securities substantially similar to
the Preferred Securities (except for the Junior Subordinated Notes and
the Preferred Securities issued pursuant to this Agreement).
(g) As soon as practicable after the date of this Agreement,
and in any event within the time prescribed by Rule 424 under the
Securities Act, to file the Prospectus with the Commission and to
advise the Representatives of such filing and to confirm such advice in
writing.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all
expenses incident to the performance of each Offeror's obligations under this
Agreement, including, but not limited to, the expenses of (i) the printing and
filing of the Registration Statement as originally filed and of each amendment
thereto (ii) the preparation, issuance and delivery of the certificate(s) for
the Preferred Securities to the Underwriters, (iii) the fees and disbursements
of the Company's, SoCo Capital's and the Trust's counsel and accountants, (iv)
the qualification of the Preferred Securities and, to the extent required or
advisable, the Notes Guarantee, the Preferred Securities Guarantee and the
Junior Subordinated Notes, under securities laws in accordance with the
provisions of Section 3(c) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any blue sky survey (such fees and
disbursements of counsel shall not exceed $3,500), (v) the printing and delivery
to the Underwriters of copies of the Registration Statement as originally filed
and of each amendment thereto and of the Preliminary Prospectus and the
Prospectus and any amendments or supplements thereto, (vi) the printing and
delivery to the Underwriters of copies of any blue sky survey, (vii) the fee of
the National Association of Securities Dealers, Inc. in connection with its
review of the offering contemplated by this Agreement, if applicable, (viii) the
fees and expenses of the Debt Trustee, including the fees and disbursements of
counsel for the Debt Trustee in connection with the Indenture and the Junior
Subordinated Notes, (ix) the fees and expenses of the Delaware Trustee, the
Property Trustee and the Guarantee Trustee, including the fees and disbursements
of counsel for the Delaware Trustee in connection with the Trust Agreement and
the related Certificate of Trust, (x) the fees and disbursements of Delaware
counsel to the Trust and SoCo Capital, (xi) any fees payable in connection with
the rating of the Preferred Securities and Junior Subordinated Notes, (xii) the
fees and expenses incurred with the listing of the Preferred Securities and, if
applicable, the Junior Subordinated Notes on the New York Stock Exchange, (xiii)
the cost and charges of any transfer agent or registrar and (xiv) the cost of
qualifying the Preferred Securities and, if applicable, the Junior Subordinated
Notes with the Depository Trust Company.
Except as otherwise provided in Section 9 hereof, the
Underwriters shall pay all other expenses incurred by them in connection with
their offering of the Preferred Securities, including fees and disbursements of
their counsel, Dewey Ballantine LLP.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters to purchase and pay for the Preferred Securities
are subject to the following conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect on the Closing Date and no
proceedings for that purpose shall be pending before, or to the
knowledge of the Company threatened by, the Commission on such date. If
filing of the Preliminary Prospectus or the Prospectus, or any
supplement thereto, is required pursuant to Rule 424, the Preliminary
Prospectus or the Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424.
(b) Orders of the Commission permitting the transactions
contemplated hereby substantially in accordance with the terms and
conditions hereof shall be in full force and effect and shall contain
no provision unacceptable to the Underwriters or the Company (but all
provisions of such order or orders heretofore entered, copies of which
have heretofore been delivered to the Representatives, are deemed
acceptable to the Underwriters and the Company and all provisions of
such order or orders hereafter entered shall be deemed acceptable to
the Underwriters and the Company unless within 24 hours after receiving
a copy of any such order any party to this Agreement shall give notice
to the other parties to the effect that such order contains an
unacceptable provision).
(c) On the Closing Date the Representatives shall have
received:
(1) The opinion, dated the Closing Date, of Troutman
Sanders LLP, counsel for the Company, substantially in the form
attached hereto as Schedule III.
(2) The opinion, dated the Closing Date, of Richards,
Layton & Finger, Delaware counsel to the Trust, substantially in the
form attached hereto as Schedule IV.
(3) The opinion, dated the Closing Date, of Richards,
Layton & Finger, Delaware counsel to Bankers Trust (Delaware), as
Delaware Trustee under the Trust Agreement, substantially in the form
attached hereto as Schedule V.
(4) The opinion, dated the Closing Date, of White and
Case, counsel to the Property Trustee, the Guarantee Trustee and the
Debt Trustee, substantially in the form attached hereto as Schedule VI.
(5) The favorable opinion, dated as of the Closing
Date, of Dewey Ballantine LLP, counsel for the Underwriters,
substantially in the form attached hereto as Schedule VII.
(6) At the Closing Date, there shall not have been,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus (x) any material adverse
change in the business, properties or financial condition of the
Company, and (y) any development involving a prospective material
adverse change in the business, properties or financial condition of
the Trust or SoCo Capital (it being understood that any such change
including only the Company shall not constitute such a change with
respect to the Trust or SoCo Capital), whether or not arising in the
ordinary course of business, and the Representatives shall have
received a certificate of the Chairman of the Board, the President or
any Vice President of the Company and SoCo Capital and a certificate of
the Administrative Trustees of the Trust, and dated as of the Closing
Date, to the effect that (i) there has been no such material adverse
change and prospective material adverse change, respectively, (ii) the
representations and warranties in Section 1 hereof are true and correct
with the same force and effect as though expressly made at and as of
the Closing Date, (iii) the Offerors have complied with all agreements
and satisfied all conditions on their respective parts to be performed
or satisfied on or prior to the Closing Date, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or, to
the knowledge of the Company, threatened by the Commission.
(7) On the Closing Date, the Representatives shall
have received from Arthur Andersen LLP a letter dated the Closing Date
to the effect that: (A) they are independent public accountants with
respect to the Company within the meaning of the Securities Act and the
rules and regulations under the Securities Act; (B) in their opinion,
the financial statements and schedules audited by them and incorporated
by reference in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the Exchange Act and the rules and regulations under the
Securities Act and the Exchange Act; (C) they have performed certain
limited procedures through a specified date not more than five business
days prior to the date of such letter, namely (i) reading the minute
books of the Company; (ii) reading the unaudited financial statements,
if any, of the Company incorporated in the Prospectus and agreeing the
amounts therein with the Company's accounting records; (iii) making
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters regarding whether the unaudited
financial statements, if any, incorporated in the Prospectus (a) are in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial
statements incorporated in the Prospectus and (b) comply as to form in
all material respects with the applicable accounting requirements of
the Exchange Act and the rules and regulations under the Exchange Act;
(iv) reading the unaudited amounts for Operating Revenues, Income
Before Interest Charges and Net Income After Dividends on Preferred
Stock and the unaudited Ratios of Earnings to Fixed Charges and
Earnings to Fixed Charges Plus Preferred Dividend Requirements
(Pre-Income Tax Basis), which amounts shall include such amounts for
the latest calendar quarter subsequent to that covered by the financial
statements incorporated by reference in the Prospectus for which such
amounts are available at the time this agreement becomes effective; (v)
reading the unaudited financial statements from which the amounts and
ratios described in (iv) were derived and agreeing the amounts therein
to the Company's accounting records; (vi) making inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters regarding whether (a) the unaudited amounts and
ratios referred to in (iv) above and the unaudited and the unaudited
financial statements referred to in (v) above are stated on a basis
substantially consistent with that of the corresponding audited amounts
or ratios included or incorporated by reference in the Prospectus and
(b) as of a specified date not more than five business days prior to
the date of delivery of such letter, there has been any change in the
capital stock or long-term debt of the Company or any decrease in net
assets as compared with amounts shown in the latest audited balance
sheet incorporated in the Prospectus, except in each case for changes
or decreases which (I) the Prospectus discloses have occurred or may
occur, (II) are occasioned by the declaration of dividends, (III) are
occasioned by draw-downs under existing pollution control financing
arrangements, (IV) are occasioned by draw-downs and regularly scheduled
payments of capitalized lease obligations, (V) are occasioned by the
purchase or redemption of bonds or stock to satisfy mandatory or
optional redemption provisions relating thereto, or (VI) are disclosed
in such letter; (vii) reading the unaudited amounts for Operating
Revenues, Income Before Interest Charges and Net Income After Dividends
on Preferred Stock and the unaudited Ratios of Earnings to Fixed
Charges and Earnings to Fixed Charges Plus Preferred Dividend
Requirements (Pre-Income Tax Basis) for the latest calendar quarter
subsequent to those set forth in (iv) above, which if available shall
be set forth in such letter; (viii) reading the unaudited financial
statements from which the amounts and ratios described in (vii) above
were derived and which will be attached to such letter and agreeing the
amounts therein to the Company's accounting records; and (ix) making
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters regarding whether the unaudited
amounts and ratios referred to in (vii) above and the unaudited
financial statements referred to in (viii) above are stated on a basis
substantially consistent with that of the corresponding audited amounts
or ratios included or incorporated by reference in the Prospectus; and
(D) reporting their findings as a result of performing the limited
procedures set forth in (C) above. It is understood that the foregoing
procedures do not constitute an audit performed in accordance with
generally accepted auditing standards and they would not necessarily
reveal matters of significance with respect to the comments made in
such letter, and accordingly that Arthur Andersen LLP make no
representations as to the sufficiency of such procedures for the
several Underwriter's purposes.
(8) On the Closing Date, Dewey Ballantine LLP,
counsel for the Underwriters, shall have been furnished with such
documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Preferred
Securities as herein contemplated and related proceedings, or in order
to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Offerors, in connection with the issuance and
sale of the Preferred Securities as herein contemplated shall be
satisfactory in form and substance to the Representatives and Dewey
Ballantine LLP, counsel for the Underwriters.
(9) On the Closing Date, the Preferred Securities
shall have been approved for listing on the New York Stock Exchange
upon notice of issuance.
(10) On the Closing Date, the Representatives shall
have received a certificate of a vice president of the Company
certifying that a Special Event (as defined in the Prospectus) shall
not have occurred and be continuing.
(11) That no amendment or supplement to the
Registration Statement, the Preliminary Prospectus or the Prospectus
filed subsequent to the date of this Agreement (including any filing
made by the Company pursuant to Section 13 or 14 of the Exchange Act)
shall be unsatisfactory in form to Dewey Ballantine LLP or shall
contain information (other than with respect to an amendment or
supplement relating solely to the activity of any Underwriter or
Underwriters) which, in the reasonable judgment of the Representatives,
shall materially impair the marketability of the Preferred Securities.
(12) The Offerors shall have performed their
respective obligations when and as provided under this Agreement.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Offerors at any time prior to the
Closing Date, and such termination shall be without liability of any party to
any other party except as provided in Sections 4, 7 and 9(b) hereof.
SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE OFFERORS.
The obligations of the Offerors shall be subject to the
conditions set forth in the first sentence of Section 5(a) and in Section 5(b).
In case such conditions shall not have been fulfilled, this Agreement may be
terminated by the Company by mailing or delivering written notice thereof to the
Underwriters. Any such termination shall be without liability of any party to
any other party except as otherwise provided in Sections 4, 7 and 9(b) hereof.
SECTION 7. INDEMNIFICATION.
(a) The Offerors jointly and severally agree to indemnify and
hold harmless each of the Underwriters and each person, if any, who controls any
such Underwriter within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, 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, Exchange Act or otherwise, and to reimburse
the Underwriters and such controlling person or persons, if any, 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 the Preliminary Prospectus, the Registration Statement or the
Prospectus or, if the Offerors shall furnish to the Underwriters any amendments
or any supplements thereto, or shall make any filings pursuant to Section 13 or
14 of the Exchange Act which are incorporated therein by reference, in the
Registration Statement, the Preliminary Prospectus, or the Prospectus as so
amended or supplemented, or arise out of or are based upon any omission or
alleged omission to state therein a material fact 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 alleged untrue statement or omission or alleged omission which was
made in the Registration Statement, the Preliminary Prospectus or the Prospectus
in reliance upon and in conformity with information furnished in writing to the
Company by, or through the Representatives on behalf of, any Underwriter for use
therein and except that this indemnity with respect to the Preliminary
Prospectus and the Prospectus, if the Offerors shall have furnished any
amendment or supplement thereto, shall not inure to the benefit of any
Underwriter (or of any person controlling such Underwriter) on account of any
losses, claims, damages, liabilities or actions arising from the sale of the
Preferred Securities to any person if a copy of the Preliminary Prospectus or
the Prospectus (exclusive of documents incorporated therein by reference), as
the same may then be amended or supplemented, shall not have been sent or given
by or on behalf of such Underwriter to such person with or prior to the written
confirmation of the sale involved and the untrue statement or alleged untrue
statement or omission or alleged omission was corrected in the Preliminary
Prospectus or the Prospectus as supplemented or amended at the time of such
confirmation. Each Underwriter agrees, 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 Offerors on account of
its agreement contained in this Section 7, to notify the Offerors in writing of
the commencement thereof but the omission of such Underwriter so to notify the
Offerors of any such action shall not release the Offerors from any liability
which it may have to such Underwriter or to such controlling person otherwise
than on account of the indemnity agreement contained in this Section 7. In case
any such action shall be brought against the Underwriters or any such person
controlling such Underwriters and such Underwriter shall notify the Offerors of
the commencement thereof as above provided, the Offerors shall be entitled to
participate in (and, to the extent that they shall wish, including the selection
of counsel, to direct) the defense thereof, at their own expense. In case the
Offerors elect to direct such defense and select such counsel, any Underwriter
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 Underwriter or controlling person unless the employment of such counsel has
been authorized in writing by the Offerors in connection with defending such
action. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include any statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party. In no event shall any indemnifying party have any liability or
responsibility in respect of the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
effected without its prior written consent.
(b) The Company agrees to indemnify the Trust against all
loss, liability, claim, damage and expense whatsoever, as due from the Trust
under Section 7(a) hereunder.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, SoCo Capital, their directors and such
of their officers who have signed the Registration Statement, the Trust and each
other Underwriter and each person, if any, who controls the Offerors or any such
other Underwriter within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act to the same extent and upon the same terms as
the indemnity agreement of the Offerors set forth in Section 7(a) hereof, but
only with respect to alleged untrue statements or omissions made in the
Registration Statement, the Preliminary Prospectus, or such documents as amended
or supplemented, in reliance upon and in conformity with information furnished
in writing to the Offerors by, or through the Representatives on behalf of, such
Underwriter for use therein.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY.
All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers or Trustees of the
Offerors submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or controlling person, or by, or on behalf of the Offerors and shall survive
delivery of the Preferred Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Representatives may terminate this Agreement, by
notice to the Offerors, at any time at or prior to the Closing Date if (i)
trading in securities on the New York Stock Exchange shall have been generally
suspended, (ii) minimum or maximum ranges for prices shall have been generally
established on the New York Stock Exchange by the Commission or by the New York
Stock Exchange, (iii) a general banking moratorium shall have been declared by
federal or New York State authorities, (iv) there shall have occurred any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by the United States Congress or any other
substantial national or international calamity or emergency affecting the United
States, in any such case provided for in clauses (i) through (iv) with the
result that, in the reasonable judgement of the Representatives, the
marketability of the Preferred Securities shall have been materially impaired.
(b) If this Agreement shall be terminated by the Underwriters
pursuant to subsection (a) above or because of any failure or refusal on the
part of the Offerors to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Offerors shall be unable
to perform their obligations under this Agreement, then in any such case, the
Company will reimburse the Underwriters, severally, for the reasonable fees and
disbursements of Dewey Ballantine LLP and for the out of pocket expenses (in an
amount not exceeding a total of $10,000) reasonably incurred by the Underwriters
in making preparations for the purchase, sale and delivery of the Preferred
Securities and, upon such reimbursement, the Offerors shall be absolved from any
further liability hereunder, except as provided in Sections 4 and 7.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one
or more of the Underwriters shall fail on the Closing Date to purchase the
Preferred Securities that it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not
exceed 10% of the Preferred Securities, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase
the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations
of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10%
of the Preferred Securities, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Offerors shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
SECTION 11. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at Merrill Lynch, Pierce,
Fenner & Smith Incorporated, World Financial Center, New York, New York 10281,
Attention: Robert D. Craig, notices to the Offerors shall be directed to the
Company, SoCo Capital or the Trust c/o: Southern Company Services, Inc., 270
Peachtree Street N.W., Atlanta, Georgia 30303, Attention: Charles N. Eldred.
SECTION 12. PARTIES. This Agreement shall inure to the benefit
of and be binding upon the Underwriters, the Trust, SoCo Capital, the Company
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Trust, SoCo Capital and the
Company and their respective successors and the controlling persons and
officers, directors and trustees referred to in Section 7 and their heirs and
legal Representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Trust, SoCo Capital and the
Company and their respective successors, and said controlling persons and
officers, directors and trustees and their heirs and legal Representatives, and
for the benefit of no other person, firm or corporation. No purchaser of
Preferred Securities from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in said State. Except as
otherwise set forth herein, specified times of day refer to New York City time.
SECTION 14. COUNTERPARTS. This Agreement may be executed by
any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Trust, SoCo Capital and the Company
a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement between the Underwriters and the Trust, SoCo
Capital and the Company in accordance with its terms.
Very truly yours,
THE SOUTHERN COMPANY
By:________________________________
Title:______________________________
SOUTHERN COMPANY CAPITAL
FUNDING, INC.
By:________________________________
Title:______________________________
SOUTHERN COMPANY CAPITAL TRUST IV
By:________________________________
Title:______________________________
CONFIRMED AND ACCEPTED,
as of the date first above written
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
THE ROBINSON-HUMPHREY COMPANY, LLC
SMITH BARNEY INC.
As representatives of the other several Underwriters
named in Schedule I hereto
By: MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By:____________________________________
Title:__________________________________
<PAGE>
SCHEDULE I
- -------------------------------------------------------------------------------
NUMBER OF
UNDERWRITERS REFERRED SECURITIES
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated 840,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Goldman, Sachs & Co. 820,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Lehman Brothers Inc. 820,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Morgan Stanley & Co. Incorporated 820,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Prudential Securities Incorporated 820,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
The Robinson-Humphrey Company, LLC 820,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Smith Barney Inc. 820,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
ABN AMRO Incorporated 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Robert W. Baird & Co. Incorporated 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Bear, Stearns & Co. Inc. 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
J.C. Bradford & Co. 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
CIBC Oppenheimer Corp. 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Cowen & Company 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Credit Suisse First Boston Corporation 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Dain Rauscher Wessels 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
A.G. Edwards & Sons, Inc. 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
EVEREN Securities, Inc. 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Legg Mason Wood Walker, Incorporated 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
J.P. Morgan Securities Inc. 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
OLDE Discount Corporation 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Piper Jaffray Inc. 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Raymond James & Associates, Inc. 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Tucker Anthony Incorporated 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Wheat First Securities, Inc. 80,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Crowell, Weedon & Co. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Fahnestock & Co., Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
First Albany Corporation 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Gibralter Securities Co. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Gruntal & Co., L.L.C. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Hilliard Lyons Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Wayne Hummer & Co. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Interstate/Johnson Lane Corporation 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Janney Montgomery Scott Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
McDonald & Company Securities, Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Mesirow Financial, Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Morgan Keegan & Company, Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Regions Investment Company, Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Roney Capital Markets 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Scott & Stringfellow, Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Muriel Siebert & Co., Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Stephens Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Sterne, Agee & Leach, Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Stifel, Nicolaus & Company, Incorporated 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Stone & Youngberg 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Trilon International Inc. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Utendahl Capital Partners, L.P. 40,000
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
TOTAL 8,000,000
- -------------------------------------------------------------------------
Schedule III
[Letterhead of TROUTMAN SANDERS LLP]
__________ __, 1998
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
The Robinson-Humphrey Company, LLC
Smith Barney Inc.
As representatives of the underwriters named in Schedule I to the Underwriting
Agreement c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
New York, New York 10281
SOUTHERN COMPANY CAPITAL TRUST IV
____ % TRUST ORIGINATED PREFERRED SECURITIES
Dear Sirs:
We have acted as counsel to The Southern Company (the
"Company") in connection with (i) the formation of (a) Southern Company Capital
Trust IV, a Delaware statutory business trust (the "Trust"), pursuant to the
amended and restated trust agreement dated __________, 1998 among Southern
Company Capital Funding, Inc., a Delaware corporation ("SoCo Capital") and the
trustees named therein (the "Trust Agreement") and (b) SoCo Capital (SoCo
Capital along with the Company and the Trust being hereinafter sometimes
referred to as the "Offerors"); (ii) the Trust's issuance and sale of Trust
Originated Preferred Securities evidencing approximately a 97% undivided
interest in the Trust (the "Preferred Securities"); (iii) the Trust's issuance
and sale of Common Securities evidencing approximately a 3% undivided interest
in the Trust (the "Common Securities"); (iv) SoCo Capital's issuance and sale to
the Trust of $___________ of its ___% Junior Subordinated Notes (the "Notes")
pursuant to a Subordinated Note Indenture dated as of June 1, 1997, as
supplemented and amended, among SoCo Capital, the Company and Bankers Trust
Company, as trustee, as supplemented by the Second Supplemental Indenture dated
as of __________ __, 1998 (collectively, the "Indenture"); (v) the Agreement as
to Expenses and Liabilities dated as of __________ 1, 1998, between the Company
and the Trust (the "Agreement as to Expenses and Liabilities"); (vi) its
issuance of a guarantee (the "Preferred Securities Guarantee") of the Preferred
Securities pursuant to a Preferred Securities Guarantee Agreement dated as of
__________ 1, 1998 (the "Preferred Securities Guarantee Agreement") between the
Company and ___________________, as trustee; and (vii) its issuance of a
guarantee (the "Notes Guarantee") of the Notes pursuant to the terms of the
Indenture. The Preferred Securities are being sold to you today pursuant to the
terms of a Underwriting Agreement dated __________, 1998 (the "Underwriting
Agreement"), among the Company, SoCo Capital, the Trust and the underwriters
named in Schedule I thereto (the "Underwriters") for whom you are acting as
Representatives. This opinion is being delivered to you as Representatives
pursuant to Section 5(c)(1) thereof.
All capitalized terms not otherwise defined herein shall have
the meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the Registration Statement on Form S-3 (Nos. 333-_______, 333-________ and
333-________) pertaining to the Preferred Securities (the "Registration
Statement") filed under the Securities Act of 1933, as amended (the "Act") and
the prospectus dated ___________, 1998, filed with the Securities and Exchange
Commission on __________, 1998 (the "Prospectus"), which pursuant to Form S-3
incorporates by reference the Annual Report on Form 10-K of the Company for the
fiscal year ended December 31, 1997, the Quarterly Reports on Form 10-Q of the
Company for the quarters ended and the Current Reports on Form 8-K of the
Company dated (the "Exchange Act Documents"), each as filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters
of fact upon, the documents delivered to you at the closing (except the
certificates representing the Preferred Securities and the Notes, of which we
have examined specimens), and we have made such other and further investigations
as we deemed necessary to express the opinions hereinafter set forth. In such
examination, we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies, and the authenticity of the originals of
such latter documents.
Based upon the foregoing, and subject to the qualifications
and limitations stated herein, we are of the opinion, relying as to matters of
New York law upon the opinion dated the date hereof rendered to you by Dewey
Ballantine LLP and as to matters of Delaware law upon the opinion dated the date
hereof rendered to you by Richards, Layton & Finger, that:
<PAGE>
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has due corporate authority to conduct the business in which it is
engaged, to own and operate the properties used by it in such business and to
enter into and perform its obligations under the Preferred Securities Guarantee
Agreement, the Indenture, the Agreement as to Expenses and Liabilities and the
Underwriting Agreement.
2. SoCo Capital has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Delaware and has due corporate authority to conduct the business, as described
in the Prospectus, to enter into and perform its obligations under the
Underwriting Agreement, the Trust Agreement and the Indenture and to purchase,
own and hold the Common Securities issued by the Trust and to issue the Notes.
3. The execution, delivery and performance by the Offerors of
the Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Offerors.
4. All orders, consents or other authorizations or approvals
of the Commission legally required for the issuance and delivery of the Notes,
the Preferred Securities Guarantee and the Notes Guarantee and the issuance and
sale of the Preferred Securities have been obtained; such orders are sufficient
for the issuance and delivery of the Notes, the Common Securities, the Preferred
Securities Guarantee and the Notes Guarantee and the issuance and sale of the
Preferred Securities; the issuance and delivery of the Notes, the Preferred
Securities Guarantee and the Notes Guarantee and the issuance and sale of the
Preferred Securities conform in all material respects with the terms of such
orders; and no other order, consent or other authorization or approval of any
United States federal governmental body (other than in connection or in
compliance with the provisions of the securities or "blue sky" laws of any
jurisdiction, as to which we express no opinion) is legally required for the
issuance and delivery of the Notes, the Preferred Securities Guarantee and the
Notes Guarantee and the issuance and sale of the Preferred Securities in
accordance with the terms of the Underwriting Agreement.
5. The Indenture has been duly authorized, executed and
delivered by SoCo Capital and, assuming the due authorization, execution and
delivery thereof by the Debt Trustee, constitutes a valid and legally binding
instrument of SoCo Capital, enforceable against SoCo Capital in accordance with
its terms, subject to the qualifications that the enforceability of SoCo
Capital's obligations under the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and each of the Indenture and the Notes Guarantee conforms as
to legal matters in all material respects to the description thereof in the
Prospectus.
6. The Notes have been duly authorized and executed by SoCo
Capital and, when authenticated by the Debt Trustee in the manner provided in
the Indenture and delivered against payment therefor, will constitute valid and
binding obligations of SoCo Capital, enforceable against SoCo Capital in
accordance with their terms, subject to the qualifications that the
enforceability of SoCo Capital's obligations under the Notes may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); and the Notes conform as to legal matters in
all material respects to the description thereof in the Prospectus.
7. Each of the Indenture and the Preferred Securities
Guarantee Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms, subject to the
qualifications that the enforceability of the Company's obligations under the
Indenture and the Preferred Securities Guarantee Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); and the Preferred Securities Guarantee
Agreement conforms as to legal matters in all material respects to the
description thereof in the Prospectus.
8. The Agreement as to Expenses and Liabilities has been duly
authorized, executed and delivered by the Company and constitutes a valid and
legally binding instrument of the Company, enforceable against the Company in
accordance with its terms, subject to the qualifications that the enforceability
of the Company's obligations under the Agreement as to Expenses and Liabilities
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and the Agreement as to Expenses and
Liabilities conforms as to legal matters in all material respects to the
description thereof in the Prospectus.
9. Each of the Indenture, the Preferred Securities Guarantee
Agreement and the Trust Agreement has been duly qualified under the Trust
Indenture Act of 1939, as amended.
10. Neither the Company, SoCo Capital nor the Trust is and,
after giving effect to the offering and sale of the Preferred Securities, will
be an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
11. The Trust Agreement has been duly authorized, executed and
delivered by SoCo Capital, and, assuming due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and binding obligation of
SoCo Capital, enforceable against SoCo Capital in accordance with its terms,
subject to the qualifications that the enforceability of SoCo Capital's
obligations under the Trust Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
12. 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.
13. To the best of our knowledge, all of the issued and
outstanding Common Securities of the Trust are directly owned by SoCo Capital,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equitable right.
14. The execution, delivery and performance by the Trust of
the Underwriting Agreement and the Trust Agreement; the issuance by the Trust of
the Preferred Securities and the Common Securities; the consummation by the
Trust of the transactions contemplated thereby; the execution, delivery and
performance by the Company and SoCo Capital of the Underwriting Agreement; and
the compliance by the Trust with its obligations thereunder do not and will not
result in any violation of the Trust Agreement or related Certificate of Trust,
and do not and will not conflict with, or result in a breach of any of the terms
or provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Trust under (A) any contract, indenture, mortgage, loan agreement, note, lease
or any other agreement or instrument known to us to which the Trust is a party
or by which it may be bound or to which any of its properties may be subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the condition
(financial or otherwise) of the Trust), (B) any existing applicable law, rule or
regulation applicable to the Trust (other than the securities or blue sky laws
of any jurisdiction, as to which we express no opinion) or (C) any judgment,
order or decree known to us of any government, governmental instrumentality, or
court, domestic or foreign, or any regulatory body or administrative agency or
other governmental body having jurisdiction over the Trust or any of its
properties; and to the best of our knowledge the Trust is not a party to or
otherwise bound by any agreement other than those which are described in the
Prospectus.
15. The Common Securities have been duly authorized by the
Trust Agreement and (subject to the terms of the Trust Agreement), when issued
and delivered by the Trust to SoCo Capital against payment therefor as described
in the Prospectus, will be validly issued fully paid and nonassessable undivided
beneficial interests in the assets of the Trust; and the issuance of the Common
Securities is not subject to preemptive or other similar rights.
16. The Preferred Securities have been duly authorized by the
Trust Agreement and (subject to the terms of the Trust Agreement), when
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will be validly issued, fully paid and nonassessable undivided
beneficial interests in the assets of the Trust; the holders of the Preferred
Securities will (subject to the terms of the Trust Agreement) be entitled to the
same limitation of personal liability under Delaware law as is extended to
stockholders of private corporations for profit organized under the general
corporation law of the State of Delaware; the issuance of the Preferred
Securities is not subject to preemptive or other similar rights; and the
Preferred Securities conform as to legal matters in all material respects to the
description thereof in the Prospectus.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Prospectus or the Exchange Act Documents and take no responsibility
therefor, except as and to the extent set forth in paragraphs 5, 6, 7, 8, 12 and
16 above. In the course of the preparation by the Company of the Registration
Statement, the Prospectus and the Exchange Act Documents, we participated in
conferences with certain officers and employees of the Company, with
representatives of Arthur Andersen LLP and with your counsel. Based upon our
examination of the Registration Statement, the Prospectus and the Exchange Act
Documents, our investigations made in connection with the preparation of the
Registration Statement, the Prospectus and the Exchange Act Documents and our
participation in the conferences referred to above, (i) we are of the opinion
that the Registration Statement, as of its effective date, and the Prospectus,
as of _______________, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act Documents, as of their
respective dates of filing with the Commission, complied as to form in all
material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Prospectus or the Exchange Act Documents, and (ii)
nothing came to our attention which gives us reason to believe that the
Registration Statement, as of its effective date (including the Exchange Act
Documents on file with the Commission as of such date), contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus (including the Exchange Act Documents) at the
time it was filed pursuant to Rule 424(b) under the Securities Act, or on the
date hereof, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case we express no opinion or belief
with respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the
Prospectus or the Exchange Act Documents.
We are members of the State Bar of Georgia and we do not
express any opinion herein concerning any law other than the law of the State of
Georgia and the federal law of the United States and, to the extent set forth
herein, the laws of the States of Delaware and New York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person without our
prior written consent, except that Dewey Ballantine LLP may rely on this opinion
in giving their opinion pursuant to Section 5(c) of the Underwriting Agreement
insofar as such opinion relates to matters of Georgia law.
Yours very truly,
TROUTMAN SANDERS LLP
<PAGE>
4
Schedule IV
[Letterhead of RICHARDS, LAYTON & FINGER]
__________ __, 1998
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
The Robinson-Humphrey Company, LLC
Smith Barney Inc.
As representatives of the underwriters named in Schedule I to the Underwriting
Agreement c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
New York, New York 10281
Re: Southern Company Capital Trust IV
Ladies and Gentlemen:
We have acted as special Delaware counsel for The Southern
Company, a Delaware corporation (the "Company"), Southern Company Capital
Funding, Inc., a Delaware corporation ("SoCo Capital") and Southern Company
Capital Trust IV, a Delaware business trust (the "Trust"), in connection with
the matters set forth herein. This opinion is being furnished to you pursuant to
Section 5(c)(2) of the Underwriting Agreement, dated _____________, 1998 (the
"Underwriting Agreement"), among the Company, SoCo Capital, the Trust, Merrill
Lynch, Pierce, Fenner & Smith Incorporated and the other Underwriters listed in
Schedule I thereto.
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 ____________,
1998 (the "Original Certificate"), as filed in the office of the Secretary of
State of the State of Delaware (the "Secretary of State") on ____________, 1998;
(b) The Trust Agreement of the Trust, dated as of
____________, 1998 among SoCo Capital and the trustees of the Trust named
therein;
(c) The Amended and Restated Trust Agreement, dated as of
_________, 1998 (including Exhibits C and E thereto) (the "Trust Agreement"),
among SoCo Capital, the trustees of the Trust named therein, and the holders,
from time to time, of the undivided beneficial interests in the assets of the
Trust;
(d) The Underwriting Agreement;
(e) The Prospectus, dated __________ __, 1998 (the
"Prospectus"), relating to the __% Trust Preferred Securities of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
(each, a "Preferred Security" and collectively, the "Preferred Securities");
(f) A Certificate of Good Standing for the Trust, dated
___________ __, 1998, obtained from the Secretary of State;
(g) A certificate of an officer of SoCo Capital, attaching
inter alia copies of SoCo Capital's Certificate of Incorporation and By-Laws;
(h) The Subordinated Note Indenture dated as of June 1, 1997,
as supplemented and amended, by and between SoCo Capital and ___________, as
trustee, as supplemented by the Second Supplemental Indenture dated as of
___________ 1, 1998 (collectively, the "Indenture"), which includes the
guarantee of the Notes (as hereinafter defined) by the Company (the "Notes
Guarantee Agreement");
(i) A specimen of the Series D __% Junior Subordinated Notes
(the "Notes") issued pursuant to the Indenture;
(j) The Preferred Securities Guarantee Agreement, dated as of
_____________ 1, 1998 by and between the Company and ____________ as trustee
(the "Preferred Securities Guarantee Agreement" and, collectively with the Notes
Guarantees, the "Guarantees"); and
(k) A Certificate of Good Standing for SoCo Capital dated
_____________, 1998, obtained from the Secretary of State.
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 (k) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (k) 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) the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraphs 1 and 2 below, the due organization or due
formation or due creation, 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 organization or formation or creation, (iii) the
legal capacity of natural persons who are parties to the documents examined by
us, (iv) except to the extent provided in paragraph 8 below, the power and
authority of each of the parties to the documents examined by us to execute and
deliver, and to perform its obligations under, such documents, (v) except to the
extent provided in paragraph 8 below, 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 Trust Security is to be issued by the Trust
(collectively, the "Trust Security Holders") of a Trust Securities Certificate
for such Trust Security and the payment for the Trust Security acquired by it,
in accordance with the Trust Agreement and the Prospectus, (vii) the issuance
and sale of the Trust Securities to the Trust Security Holders in accordance
with the Trust Agreement and the Prospectus and (viii) that SoCo Capital and the
Company derive no income from or connected with sources within the State of
Delaware and have no assets, activities (other than having a registered agent as
required by the General Corporation Law of the State of Delaware and the filing
of documents and payment of franchise taxes with the Delaware Secretary of
State). We have not participated in the preparation of the Prospectus.
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:
<PAGE>
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act, 12 Del.
C. ss. 3801, et seq. (the "Business Trust Act"), and all filings required under
the laws of the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made.
2. SoCo Capital has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Delaware and has due corporate power and authority under the General Corporation
Laws of the State of Delaware to enter into and perform its obligations under
the Underwriting Agreement, the Trust Agreement and the Indenture and to
purchase, own and hold the Common Securities issued by the Trust and to issue
the Notes.
3. Under the Business Trust Act and the Trust Agreement, the
Trust has the business trust power and authority to (i) own property and conduct
its business, all as described in the Prospectus, (ii) execute and deliver, and
to perform its obligations under, the Underwriting Agreement, (iii) issue and
perform its obligations under the Trust Securities, and (iv) perform its
obligations under the Trust Agreement.
4. The Trust Securities have been duly authorized by the Trust
Agreement and will be duly and validly issued undivided beneficial interests in
the assets of the Trust. Subject to the qualifications set forth in paragraph 7
below, the Preferred Securities will be fully paid and nonassessable undivided
beneficial interests in the assets of the Trust. Under the Business Trust Act
and the Trust Agreement, the Trust Securities are not subject to any preemptive
or other similar rights.
5. Under the Business Trust Act and the Trust Agreement, the
Underwriting Agreement has been duly authorized by all necessary business trust
action on the part of the Trust.
6. No authorization, approval, consent or order of any
Delaware court or Delaware governmental authority or Delaware agency is required
to be obtained by the Trust, the Company or SoCo Capital solely as a result of
(i) the issuance and sale of the Preferred Securities, (ii) the issuance and
delivery of the Notes and (iii) the issuance and delivery of the Guarantees.
7. The Persons to whom Preferred Securities are to be issued
by the Trust (collectively, the "Preferred 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
Preferred Security Holders may be obligated, pursuant to the Trust Agreement, to
(i) provide indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers or exchanges of Preferred Securities
Certificates and the issuance of replacement Preferred Securities Certificates
and (ii) provide security or indemnity in connection with requests of or
directions to the Property Trustee to exercise its rights and powers under the
Trust Agreement.
8. The Trust Agreement constitutes a valid and binding
obligation of SoCo Capital and the Trustees, and is enforceable against SoCo
Capital and the Trustees, in accordance with its terms.
9. The issuance and sale by the Trust of the Trust Securities,
the execution, delivery and performance by the Trust of the Underwriting
Agreement and the Trust Agreement, the consummation by the Trust of the
transactions contemplated by the Underwriting Agreement and the Trust Agreement
and compliance by the Trust with its obligations thereunder do not violate (i)
any of the provisions of the Certificate or the Trust Agreement or (ii) any
applicable Delaware law or Delaware administrative regulation.
10. We have reviewed the statements in the Prospectus under
the caption "Southern Company Capital Trust IV" and, insofar as they contain
statements of Delaware law, such statements are fairly presented.
The opinion expressed in paragraph 8 above is subject as to
enforcement, to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation, fraudulent
conveyance and other similar laws relating to or affecting the rights and
remedies of creditors generally, (ii) principles of equity, including applicable
law relating to fiduciary duties (regardless of whether considered and applied
in a proceeding in equity or at law), and (iii) the effect of applicable public
policy on the enforceability of provisions relating to indemnification.
We consent to your relying as to matters of Delaware law upon
this opinion in connection with the Underwriting Agreement. We consent to the
law firms of Troutman Sanders LLP and Dewey Ballantine LLP relying as to matters
of Delaware law upon this opinion in connection with opinions to be rendered by
them pursuant to the Underwriting Agreement. 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,
RICHARDS, LAYTON & FINGER
<PAGE>
2
Schedule V
[Letterhead of RICHARDS, LAYTON & FINGER]
__________ __, 1998
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
The Robinson-Humphrey Company, LLC
Smith Barney Inc.
As representatives of the underwriters named in Schedule I to the Underwriting
Agreement c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
New York, New York 10281
Re: Southern Company Capital Trust IV
Ladies and Gentlemen:
We have acted as special Delaware counsel to Bankers Trust
(Delaware), a Delaware banking corporation ("BT(DE)"), solely for purposes of
this opinion in connection with Southern Company Capital Trust IV, a business
trust existing under the laws of the State of Delaware (the "Trust") pursuant to
the Trust Agreement, dated as of __________, 1998, as amended and restated by
the Amended and Restated Trust Agreement, dated as of _____________, 1998 among
BT(DE), Southern Company Capital Funding, Inc. ("SoCo Capital"), the other
trustees named therein and the holders from time to time of the undivided
beneficial interests in the assets of the Trust (collectively, the "Trust
Agreement"). This opinion is being delivered to you pursuant to Section 5(c)(3)
of the Underwriting Agreement, dated ___________ __, 1998 (the "Underwriting
Agreement"), among Merrill Lynch, Pierce, Fenner & Smith Incorporated, the
several Underwriters named in Schedule I thereto, The Southern Company, SoCo
Capital and the Trust, pursuant to which the $___,000,000 ___% Preferred
Securities of the Trust will be sold. All capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the
Underwriting Agreement.
We have examined an original or a copy of the Trust Agreement.
We have also examined originals or copies of such other documents and such
corporate records, certificates and other statements of governmental officials
and corporate officers and other Representatives of BT(DE) as we have deemed
necessary or appropriate for the purposes of this opinion. Moreover, as to
certain facts material to the opinions expressed herein, we have relied upon the
representations and warranties contained in the documents referred to in this
paragraph.
Based upon the foregoing and upon an examination of such
questions of law as we have deemed necessary or appropriate, and subject to the
assumptions, exceptions and qualifications set forth below, we advise you that,
in our opinion:
<PAGE>
1. BT(DE) is duly incorporated and is validly existing in good
standing as a banking corporation with trust powers under the laws of the State
of Delaware and has the power and authority to execute, deliver and perform its
obligations under the Trust Agreement.
2. The Trust Agreement has been duly authorized, executed and
delivered by BT(DE) and constitutes a legal, valid and binding obligation of
BT(DE), enforceable against BT(DE), in accordance with its terms.
3. The execution and delivery of, and performance of the terms
of, the Trust Agreement by BT(DE), does not conflict with or constitute a breach
of, or default under, the charter or by-laws of BT(DE).
4. No consent, approval or authorization of, or registration,
declaration or filing with, any court or governmental agency or body having
jurisdiction in the premises is required under Delaware law for the execution,
delivery or performance by BT(DE) of the Trust Agreement.
The foregoing opinions are subject to the following
exceptions, qualifications and assumptions:
(A) We are admitted to practice in the State of Delaware and
we do not hold ourselves out as being experts on the law of any other
jurisdiction. The foregoing opinions are limited to the laws of the State of
Delaware and the federal laws of the United States of America governing the
banking and trust powers of BT(DE) (except that we express no opinion with
respect to (i) state securities or blue sky laws and (ii) federal securities
laws, including, without limitation, the Securities Act of 1933, as amended the
Securities Exchange Act of 1934, as amended, the Trust Indenture Act of 1939, as
amended, and the Investment Company Act of 1940, as amended) and we have not
considered and express no opinion on the laws, rules and regulations of any
other jurisdiction.
(B) The foregoing opinions regarding enforceability are
subject to (i) applicable bankruptcy, insolvency, moratorium, receivership,
reorganization, fraudulent transfer or conveyance and similar laws relating to
and affecting the rights and remedies of creditors generally, (ii) principles of
equity (regardless of whether considered and applied in a proceeding in equity
or at law), and (iii) the effect of federal or state securities laws on the
enforceability of provisions relating to indemnification or contribution.
(C) We have assumed the due authorization, execution and
delivery by each of the parties thereto, other than BT(DE), of the Trust
Agreement, and that each of such parties has the full power, authority and legal
right to execute, deliver and perform such document.
(D) We have assumed that all signatures (other than those of
the Delaware Trustee) on documents examined by us are genuine, that all
documents submitted to us as originals are authentic, and that all documents
submitted to us as copies or specimens conform with the originals, which facts
we have not independently verified.
This opinion may be relied upon by you in connection with the
matters set forth herein, and without our prior written consent, may not be
furnished or quoted to, or relied upon by, any other person or entity for any
purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER
<PAGE>
2
Schedule VI
[Letterhead of WHITE & CASE]
__________ __, 1998
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
The Robinson-Humphrey Company, LLC
Smith Barney Inc.
As representatives of the underwriters named in Schedule I to the Underwriting
Agreement c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
New York, New York 10281
SOUTHERN COMPANY CAPITAL TRUST IV
____% Trust Originated Preferred Securities
Dear Sirs:
We have acted as counsel to Bankers Trust Company (the "Bank")
in connection with (a) the Subordinated Note Indenture, dated as of June 1,
1997, as supplemented and amended, (the "Original Indenture"), among The
Southern Company ("Southern"), Southern Company Capital Funding, Inc. ("SoCo
Capital") and the Bank, as Trustee, (b) the Second Supplemental Indenture dated
as of ___________, 1998 (together with the Original Indenture, herein called the
"Indenture"), among the Company, Southern and the Bank, as Trustee, (c) the
Preferred Securities Guarantee Agreement dated as of ___________, 1998 (the
"Guarantee Agreement") and (d) the Amended and Restated Trust Agreement, dated
as of _________ ______, 1998 (the "Trust Agreement") among SoCo Capital, the
Bank, as Property Trustee, Bankers Trust (Delaware), as Delaware Trustee, and
_______________ and ______________, as Administrative Trustees.
In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
records and other instruments as we have deemed necessary or appropriate for the
purpose of this opinion, including copies of the Indenture, the Trust Agreement,
the Guarantee Agreement and certain resolutions adopted by the Board of
Directors of the Bank.
Based upon the foregoing, we are of the opinion that:
i) the Bank has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of
the State of New York;
ii) the Bank has the corporate trust power and authority to
execute, deliver and perform its duties under the Indenture, the Trust
Agreement and the Guarantee Agreement, has duly executed and delivered
the Indenture, the Trust Agreement and the Guarantee Agreement, and,
insofar as the laws governing the trust powers of the Bank are
concerned and assuming due authorization, execution and delivery
thereof by the other parties thereto, each of the Indenture, the Trust
Agreement and the Guarantee Agreement constitutes a legal, valid and
binding agreement of the Bank, enforceable against the Bank in
accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
laws affecting creditors' rights generally from time to time in effect
and subject, as to enforceability, to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law).
iii) the execution, delivery and performance by the
Bank of the Indenture, the Trust Agreement and the Guarantee Agreement
do not conflict with or constitute a breach of the charter or bylaws of
the Bank.
iv) no approval, authorization or other action by, or
filing with, any governmental authority of the United States of America
or the State of New York having jurisdiction over the trust powers of
the Bank is required in connection with the execution and delivery by
the Bank of the Indenture, the Trust Agreement or the Guarantee
Agreement or the performance by the Bank of its duties thereunder,
except such as have been obtained, taken or made.
We are admitted to practice in the State of New York, and we
express no opinion as to matters governed by any laws other than the laws of the
State of New York and the Federal law of the United States of America. We are
furnishing this opinion to you solely for your benefit. This opinion is not to
be used, circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
WHITE & CASE
<PAGE>
3
Schedule VII
[Letterhead of DEWEY BALLANTINE LLP]
__________ __, 1998
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
The Robinson-Humphrey Company, LLC
Smith Barney Inc.
As representatives of the underwriters named in Schedule I to the Underwriting
Agreement c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
New York, New York 10281
SOUTHERN COMPANY CAPITAL TRUST IV
______% Trust Originated Preferred Securities
Ladies and Gentlemen:
In connection with (i) the formation (A) by The Southern Company (the
"Company") of Southern Company Capital Funding, Inc. ("SoCo Capital") and (B) by
SoCo Capital of Southern Company Capital Trust IV (the "Trust" and,
collectively, with the Company and SoCo Capital, the "Offerors"), a Delaware
statutory business trust, pursuant to the amended and restated trust agreement
dated as of __________ 1, 1998 among SoCo Capital and the trustees named therein
(the "Trust Agreement"); (ii) the Trust's issuance and sale of Trust Originated
Preferred Securities evidencing approximately a 97% undivided interest in the
Trust (the "Preferred Securities"); (iii) the Trust's issuance and sale of its
Common Securities evidencing approximately a 3% undivided interest in the Trust
(the "Common Securities"); (iv) SoCo Capital's issuance and sale to the Trust of
$___________ of its Series _ ___% Junior Subordinated Notes (the "Notes")
pursuant to a Subordinated Note Indenture dated as of June 1, 1997, as
supplemented and amended, among SoCo Capital, the Company and Bankers Trust
Company, as trustee, as supplemented by the Second Supplemental Indenture dated
as of __________ __, 1998 (collectively, the "Indenture"); (v) the Agreement as
to Expenses and Liabilities dated as of _________ 1, 1998, between the Company
and the Trust (the "Agreement as to Expenses and Liabilities"); (vi) the
Company's issuance of a guarantee (the "Preferred Securities Guarantee") of the
Preferred Securities pursuant to a Preferred Securities Guarantee Agreement
dated as of __________ 1, 1998 (the "Guarantee Agreement") between the Company
and Bankers Trust Company, as trustee; and (vii) the Company's issuance of a
guarantee (the "Notes Guarantee") of the Notes pursuant to the terms of the
Indenture, we have acted as counsel to you and the other underwriters named in
the Schedule I (the "Underwriters") to the Underwriting Agreement dated
__________ __, 1998, among the Company, SoCo Capital, the Trust and the
Underwriters for whom you are acting as Representatives (the "Underwriting
Agreement"). This opinion is being delivered to you as Representatives pursuant
to Section 5(c)(5) thereof.
All capitalized terms not otherwise defined herein shall have the
meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined
the Registration Statement on Form S-3 (Nos. 333-_______, 333-________ and
333-________) pertaining to the Preferred Securities (the "Registration
Statement") filed under the Securities Act of 1933, as amended (the "Act") and
the related prospectus dated ___________, 1998, filed pursuant to Rule 424(b)
under the Act with the Securities and Exchange Commission on __________, 1998
(the "Prospectus"), which pursuant to Form S-3 incorporates by reference the
Annual Report on Form 10-K of the Company for the fiscal year ended December 31,
1997, the Quarterly Reports on Form 10-Q of the Company for the quarters ended
and the Current Reports on Form 8-K of the Company dated (the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing (except the certificates
representing the Preferred Securities and the Notes, of which we have examined
specimens), and we have made such other and further investigations as we deemed
necessary to express the opinions hereinafter set forth. In such examination, we
have assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies, and the authenticity of the originals of such latter
documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion, relying as aforesaid and as to
all matters covered hereby which are governed by or dependent upon the laws of
the State of Georgia upon the opinion of Troutman Sanders LLP dated the date
hereof and addressed to you, and as to all matters covered hereby which are
governed by or dependent upon the laws of the State of Delaware upon the opinion
of Richards, Layton & Finger, dated the date hereof and addressed to you (a form
of which is attached as Schedule IV to the Underwriting Agreement), that:
<PAGE>
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has due corporate authority to conduct its business as described in
the Prospectus and to enter into and perform its obligations under the Guarantee
Agreement, the Indenture, the Agreement as to Expenses and Liabilities and the
Underwriting Agreement.
2. SoCo Capital has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Delaware and has due corporate authority to conduct the business in which it is
engaged and to own and operate the properties used by it in such business, to
enter into and perform its obligations under the Guarantee Agreement, the
Underwriting Agreement, the Trust Agreement and the Indenture and to purchase,
own and hold the Common Securities and to issue the Notes.
3. The execution, delivery and performance by the Offerors of
the Underwriting Agreement have been duly authorized by all necessary corporate
action of the Offerors, and the Underwriting Agreement has been duly executed
and delivered by the Offerors.
4. All orders, consents, or other authorizations or approvals
of the Commission legally required for the issuance and delivery of the Notes,
the Notes Guarantee and the Preferred Securities Guarantee and the issuance and
sale of the Preferred Securities have been obtained; such orders are sufficient
for the issuance and delivery of the Notes, the Notes Guarantee and the
Preferred Securities Guarantee and the issuance and sale of the Preferred
Securities; the issuance and delivery of the Notes, the Notes Guarantee and the
Preferred Securities Guarantee and the issuance and sale of the Preferred
Securities conform in all material respects with the terms of such orders; and
no other order, consent or other authorization or approval of any United States
federal governmental body is legally required for the issuance and delivery of
the Notes, the Notes Guarantee and the Preferred Securities Guarantee and the
issuance and sale of the Preferred Securities in accordance with the terms of
the Underwriting Agreement.
5. The Indenture has been duly authorized, executed and
delivered by SoCo Capital and, assuming the due authorization, execution and
delivery thereof by the Debt Trustee, constitutes a valid and legally binding
instrument of SoCo Capital, enforceable against SoCo Capital in accordance with
its terms, subject to the qualifications that the enforceability of SoCo
Capital's obligations under the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and the Indenture conforms as to legal matters in all
material respects to the description thereof in the Prospectus.
6. The Notes have been duly authorized and executed by SoCo
Capital and, when authenticated by the Debt Trustee in the manner provided in
the Indenture and delivered against payment therefor, will constitute valid and
binding obligations of SoCo Capital enforceable against SoCo Capital in
accordance with their terms, subject to the qualifications that the
enforceability of SoCo Capital's obligations under the Notes may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); and the Notes conform as to legal matters in
all material respects to the description thereof in the Prospectus.
7. Each of the Indenture and Guarantee Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
legally binding instrument of the Company, enforceable against the Company in
accordance with its terms, subject to the qualifications that the enforceability
of the Company's obligations under each of the Indenture and the Guarantee
Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and each of the Notes Guarantee
and the Guarantee Agreement conforms as to legal matters in all material
respects to the description thereof in the Prospectus.
8. Each of the Indenture, the Trust Agreement and the
Guarantee Agreement has been duly qualified under the Trust Indenture Act of
1939, as amended.
9. The Agreement as to Expenses and Liabilities has been duly
authorized, executed and delivered by the Company and constitutes a valid and
legally binding instrument of the Company, enforceable against the Company in
accordance with its terms, subject to the qualifications that the enforceability
of the Company's obligations under the Agreement as to Expenses and Liabilities
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and the Agreement as to Expenses and
Liabilities conforms as to legal matters in all material respects to the
description thereof in the Prospectus.
10. The Preferred Securities have been duly authorized by the
Trust Agreement and (subject to the terms of the Trust Agreement), when
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will be validly issued, fully paid and nonassessable beneficial
interests in the assets of the Trust; and the Preferred Securities conform as to
legal matters in all material respects to the description thereof in the
Prospectus.
We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Registration Statement,
the Prospectus or the Exchange Act Documents and take no responsibility
therefor, except as and to the extent set forth in paragraphs 5, 6, 7, 9 and 10
above. In the course of the preparation by the Company of the Registration
Statement, the Prospectus and the Exchange Act Documents, we participated in
conferences with certain officers and employees of the Company, with counsel for
the Company, and with representatives of Arthur Andersen LLP. Based upon our
examination of the Registration Statement, the Prospectus and the Exchange Act
Documents, our investigations made in connection with the preparation of the
Registration Statement, the Prospectus and the Exchange Act Documents and our
participation in the conferences referred to above, (i) we are of the opinion
that the Registration Statement, as of its effective date, and the Prospectus,
as of _______________, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act Documents, as of their
respective dates of filing with the Commission, complied as to form in all
material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that in
each case we express no opinion as to the financial statements or other
financial or statistical data contained or incorporated by reference in the
Registration Statement, the Prospectus or the Exchange Act Documents, and (ii)
nothing came to our attention which gives us reason to believe that the
Registration Statement, as of its effective date (including the Exchange Act
Documents on file with the Commission as of such date), contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus (including the Exchange Act Documents) at the
time it was filed pursuant to Rule 424(b) under the Securities Act, or on the
date hereof, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that in each case we express no opinion or belief
with respect to the financial statements or other financial or statistical data
contained or incorporated by reference in the Registration Statement, the
Prospectus or the Exchange Act Documents.
We are members of the State Bar of New York and we do not express any
opinion herein concerning any law other than the law of the State of New York,
the federal law of the United States, and to the extent set forth herein, the
laws of the States of Delaware and Georgia.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by or furnished to any other person without our prior written
consent, except that Troutman Sanders LLP may rely on this opinion in giving its
opinions dated the date hereof pursuant to Section 5(c)(1) of the Underwriting
Agreement and Sections 102, 302 and 904 of the Indenture, insofar as such
opinions relate to matters of New York law.
Very truly yours,
DEWEY BALLANTINE LLP
Exhibit 4.2
SOUTHERN COMPANY CAPITAL FUNDING, INC.
AND
THE SOUTHERN COMPANY
TO
BANKERS TRUST COMPANY,
TRUSTEE.
SECOND SUPPLEMENTAL INDENTURE
DATED AS OF JUNE 25, 1998
$206,186,000
SERIES D 7-1/8% JUNIOR SUBORDINATED NOTES
DUE JUNE 30, 2028
<PAGE>
TABLE OF CONTENTS1
ARTICLE 1.........................................................2
SECTION 101. Establishment........................................2
SECTION 102. Definitions..........................................2
SECTION 103. Payment of Principal and Interest....................3
SECTION 104. Deferral of Interest Payments........................4
SECTION 105. Denominations........................................5
SECTION 106. Global Securities....................................5
SECTION 107. Transfer.............................................5
SECTION 108. Redemption...........................................6
ARTICLE 2.........................................................6
SECTION 201. Recitals by Company..................................6
SECTION 202. Ratification and Incorporation of Original
Indenture................................................6
SECTION 203. Executed in Counterparts.............................7
SECTION 204. Listing of Notes.....................................7
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 SECOND SUPPLEMENTAL INDENTURE is made as of the 25th day
of June, 1998, 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 June 1, 1997 (the "Original
Indenture"), with Bankers Trust Company, as supplemented by a First Supplemental
Indenture dated as of June 6, 1997 (the "First Supplement Indenture"), with
Bankers Trust Company;
WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as supplemented by the First Supplemental
Indenture and this Second 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;
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 Second 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 D Junior Subordinated Notes
SECTION 101. Establishment. There is hereby established a new series of
Junior Subordinated Notes to be issued under the Indenture, to be designated as
the Company's Series D 7-1/8% Junior Subordinated Notes due June 30, 2028 (the
"Series D Notes").
There are to be authenticated and delivered $206,186,000 principal
amount of Series D Notes, and no further Series D Notes shall be authenticated
and delivered except as provided by Sections 203, 303, 304, 907 or 1107 of the
Original Indenture. The Series D Notes shall be issued in definitive fully
registered form.
The Series D Notes shall be in substantially the form set out in
Exhibit A hereto. The entire principal amount of the Series D Notes shall
initially be evidenced by one certificate issued to the Property Trustee of
Southern Company Capital Trust IV.
The form of the Trustee's Certificate of Authentication for the Series
D 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 D Note in
substantially the form set forth in Section 1404 of the Original Indenture.
Each Series D 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 7-1/8% per annum from the applicable Interest
Payment Date to the date of payment, compounded quarterly, to the extent
permitted by applicable law.
"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 twenty (20) consecutive quarters.
"Interest Payment Dates" means March 31, June 30, September 30 and
December 31 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 June 25, 1998.
"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 IV, 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 D Notes.
"Special Event" means an Investment Company Act Event or Tax Event.
"Stated Maturity" means June 30, 2028.
"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 D Notes, (ii) interest payable on the Series D 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 D Notes shall bear interest at the rate of 7-1/8% per annum
until paid or duly provided for. Interest shall be paid quarterly in arrears on
each Interest Payment Date to the Person in whose name the Series D 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 D 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 D 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 D 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 D Notes will include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Series D 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 D 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 D Notes shall be made upon surrender of the Series D 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 D 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 D Notes for up to twenty (20) consecutive quarters (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
twenty (20) consecutive quarters. 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
D 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 D 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 the New York Stock Exchange or
other 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. The month in which any notice is given pursuant to the
immediately preceding sentence of this Section shall constitute the first month
of the first quarter of the twenty (20) quarters, which comprise the Maximum
Extension Period.
At any time any of the foregoing notices are given to the Trustee, the
Company shall give to the Paying Agent for the Series D Notes such information
as said Paying Agent shall reasonably require in order to fulfill its tax
reporting obligations with respect to such Series D Notes.
SECTION 105. Denominations. The Series D Notes may be issued in the
denominations of $25, or any integral multiple thereof.
SECTION 106. Global Securities. If the Series D Notes are distributed
to Holders of the Trust Securities of the Securities Trust in liquidation of
such Holders' interests therein, the Series D 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 D Notes represented by the Global Security
will not be exchangeable for, and will not otherwise be issuable as, Series D
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 D 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 D 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 D
Notes. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Series D Notes registered in such names as
the Depositary shall direct.
SECTION 107. Transfer. No service charge will be made for any transfer
or exchange of Series D 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 D 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 D 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 D Notes theretofore selected for redemption in whole or in part, except
the unredeemed portion of any Series D Note redeemed in part.
SECTION 108. Redemption. The Series D Notes shall be subject to
redemption at the option of the Company, in whole or in part, without premium or
penalty, at any time or from time to time on or after June 30, 2003, at a
Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest, including Additional Interest, if any, to the
Redemption Date; provided, however, that if a redemption in part shall result in
the delisting of the Preferred Securities issued by the Securities Trust, the
Company may only redeem the Series D Notes in whole. In addition, upon the
occurrence of a Special Event at any time, the Company may, within ninety (90)
days following the occurrence thereof and subject to the terms and conditions of
the Indenture, elect to redeem the Series D Notes, in whole, at a price equal to
100% of the principal amount to be redeemed plus any accrued but unpaid interest
(including Additional Interest) to the Redemption Date.
In the event of redemption of the Series D Notes in part only, a new
Series D 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 D 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 D Notes shall, with
respect to the principal thereof, be divisible by $25.
ARTICLE 2
Miscellaneous Provisions
SECTION 201. Recitals by Company. The recitals in this Second
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 D Notes and of this Second 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 by the First Supplemental Indenture and as supplemented hereby, the
Original Indenture is in all respects ratified and confirmed, and the Original
Indenture, the First Supplemental Indenture and this Second Supplemental
Indenture shall be read, taken and construed as one and the same instrument.
SECTION 203. Executed in Counterparts. This Second 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 D Notes are to be issued
as a Global Security in connection with the distribution of the Series D Notes
to the Holders of the Preferred Securities issued by the Securities Trust, the
Company will use its best efforts to list such Series D Notes on the New York
Stock Exchange or any such other exchange on which such Preferred Securities are
then listed and traded.
<PAGE>
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,
as Trustee
By:____________________________ By:_____________________________
<PAGE>
EXHIBIT A
FORM OF SERIES D NOTE
<PAGE>
NO. 1 CUSIP NO. 842634AZ1
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 D 7-1/8% JUNIOR SUBORDINATED NOTE
DUE JUNE 30, 2028
Principal Amount: $____________
Regular Record Date: 15th calendar day prior to Interest Payment Date
Original Issue Date: June 25, 1998
Stated Maturity: June 30, 2028
Interest Payment Dates: March 31, June 30, September 30 and December 31
Interest Rate: 7-1/8% per annum
Authorized Denomination: $25
Initial Redemption Date: June 30, 2003
Southern Company Capital Funding, Inc., a Delaware corporation (the
"Company", which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to _____________________________________, or registered assigns, the principal
sum of _________ DOLLARS ($__________) on the Stated Maturity shown above (or
upon earlier redemption), and 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, quarterly in arrears on each
Interest Payment Date as specified above, commencing on September 30, 1998 and
on the Stated Maturity (or upon earlier redemption) 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 20 consecutive quarters but not beyond the Stated Maturity of this
Note (each, an "Extension Period"), during which periods unpaid interest
(together with interest thereon) will compound quarterly 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
20 consecutive quarters. 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 the New York Stock Exchange or
other 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
D Notes shall be made upon surrender of the Series D 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: ________ __, ____.
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 June 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 D 7-1/8% Junior Subordinated
Notes due June 30, 2028 (the "Series D Notes") in the aggregate principal amount
of up to $206,186,000. 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 June 30, 2003, at
the option of the Company, without premium or penalty, in whole or in part, at a
Redemption Price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest, including Additional Interest, if any, to the
Redemption Date . 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 without
premium or penalty, in whole, at a Redemption Price equal to 100% of the
principal amount thereof plus any accrued and unpaid interest, including
Additional Interest, if any, to the Redemption Date. 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 D Notes, (ii)
interest payable on the Series D Notes 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.
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 of each series 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 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 $25 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 4.5
SOUTHERN COMPANY CAPITAL TRUST IV
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 June 1, 1998
<PAGE>
SOUTHERN COMPANY CAPITAL TRUST IV
Certain Sections of this Trust Agreement relating
to Sections 310 through 318 of the Trust Indenture
Act of 1939:
Trust Indenture Act Section Trust Agreement 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..................................................10
Section 2.01 Name...........................................10
Section 2.02 Offices of the Trustees; Principal
Place of Business......................................10
Section 2.03 Initial Contribution of Trust
Property; Organizational Expenses......................10
Section 2.04 Issuance of the Preferred Securities...........10
Section 2.05 Subscription and Purchase of Junior
Subordinated Notes; Issuance of the Common
Securities.............................................11
Section 2.06 Declaration of Trust...........................11
Section 2.07 Authorization to Enter into Certain
Transactions...........................................11
Section 2.08 Assets of Trust................................15
Section 2.09 Title to Trust Property........................15
Section 2.10 Mergers and Consolidations of the
Trust..................................................15
ARTICLE III.................................................16
Section 3.01 Payment Account................................16
ARTICLE IV..................................................17
Section 4.01 Distributions..................................17
Section 4.02 Redemption.....................................18
Section 4.03 Subordination of Common Securities.............20
Section 4.04 Payment Procedures.............................20
Section 4.05 Tax Returns and Reports........................20
ARTICLE V...................................................21
Section 5.01 Initial Ownership..............................21
Section 5.02 The Trust Securities Certificates..............21
Section 5.03 Authentication of Trust Securities
Certificates...........................................21
Section 5.04 Registration of Transfer and
Exchange of Preferred Securities Certificates..........21
Section 5.05 Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates..........................22
Section 5.06 Persons Deemed Securityholders.................23
Section 5.07 Access to List of Securityholders'
Names and Addresses....................................23
Section 5.08 Maintenance of Office or Agency................23
Section 5.09 Appointment of Paying Agent....................23
Section 5.10 Ownership of Common Securities by
Depositor..............................................24
Section 5.11 Book-Entry Preferred Securities
Certificates; Common Securities Certificate............24
Section 5.12 Notices to Clearing Agency.....................25
Section 5.13 Definitive Preferred Securities
Certificates...........................................25
Section 5.14 Rights of Securityholders......................26
ARTICLE VI..................................................26
Section 6.01 Limitations on Voting Rights...................26
Section 6.02 Notice of Meetings.............................27
Section 6.03 Meetings of Preferred Securityholders..........27
Section 6.04 Voting Rights..................................28
Section 6.05 Proxies, etc...................................28
Section 6.06 Securityholder Action by Written
Consent................................................28
Section 6.07 Record Date for Voting and Other
Purposes...............................................28
Section 6.08 Acts of Securityholders........................28
Section 6.09 Inspection of Records..........................29
ARTICLE VII.................................................30
Section 7.01 Representations and Warranties of
the Trustees...........................................30
ARTICLE VIII................................................31
Section 8.01 Certain Duties and Responsibilities............31
Section 8.02 Notice of Defaults.............................32
Section 8.03 Certain Rights of Property Trustee.............32
Section 8.04 Not Responsible for Recitals or
Issuance of Securities.................................33
Section 8.05 May Hold Securities............................33
Section 8.06 Compensation; Fees; Indemnity..................33
Section 8.07 Trustees Required; Eligibility.................34
Section 8.08 Conflicting Interests..........................34
Section 8.09 Co-Trustees and Separate Trustee...............35
Section 8.10 Resignation and Removal; Appointment
of Successor...........................................36
Section 8.11 Acceptance of Appointment by
Successor..............................................37
Section 8.12 Merger, Conversion, Consolidation or
Succession to Business.................................38
Section 8.13 Preferential Collection of Claims
Against Depositor or Trust.............................38
Section 8.14 Reports by Property Trustee....................38
Section 8.15 Reports to the Property Trustee................39
Section 8.16 Evidence of Compliance with
Conditions Precedent...................................39
Section 8.17 Number of Trustees.............................39
Section 8.18 Delegation of Power............................39
Section 8.19 Enforcement of Rights of Property
Trustee by Securityholders.............................40
ARTICLE IX..................................................40
Section 9.01 Termination Upon Expiration Date...............40
Section 9.02 Early Termination..............................40
Section 9.03 Termination....................................41
Section 9.04 Liquidation....................................41
Section 9.05 Bankruptcy.....................................42
ARTICLE X...................................................43
Section 10.01 Expense Agreement.............................43
Section 10.02 Limitation of Rights of
Securityholders........................................43
Section 10.03 Amendment.....................................43
Section 10.04 Separability..................................44
Section 10.05 Governing Law.................................44
Section 10.06 Successors....................................44
Section 10.07 Headings......................................44
Section 10.08 Notice and Demand.............................44
Section 10.09 Agreement Not to Petition.....................45
Section 10.10 Conflict with Trust Indenture Act.............45
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 Preferred Securities Certificate
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT is made as of June 1, 1998,
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 March
16, 1998 (the "Original Trust Agreement"), by the execution by the Delaware
Trustee of the Certificate of Trust, dated March 16, 1998, and by the filing of
such Certificate with the Secretary of State of the State of Delaware on March
17, 1998; 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 Preferred Securities by the Trust pursuant to the
Underwriting 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
. 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 Preferred Securities Certificates" means certificates
representing Preferred 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.
"Certificate Depository Agreement" means the agreement among the Trust,
the Property Trustee and The Depository Trust Company, as the initial Clearing
Agency, dated June 23, 1998, relating to the Preferred 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 $25 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 Preferred Securities Certificates" means either or both (as
the context requires) of (i) Preferred Securities Certificates issued in
certificated, fully registered form as provided in Section 5.11(a) and (ii)
Preferred 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.
"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 Preferred 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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"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.
"Guarantee" means the Preferred 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 Preferred 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 $206,186,000 aggregate principal
amount of the Depositor's Series D 7-1/8% Junior Subordinated Notes due June 30,
2028, 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 $25 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.
"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.
"Outstanding", when used with respect to Preferred Securities, means,
as of the date of determination, all Preferred Securities theretofore
authenticated and delivered under this Trust Agreement, except:
(i) Preferred Securities theretofore canceled by the
Administrative Trustees or delivered to the Administrative Trustees for
cancellation;
(ii) Preferred 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 Preferred
Securities; provided that if such Preferred Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Trust Agreement; and
(iii) Preferred Securities in exchange for or in lieu of which
other Preferred 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 Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred 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 Preferred 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 Preferred Securities are owned
by the Depositor, the Holder of the Common Securities, the Guarantor, one or
more Administrative Trustees and/or any such Affiliate. Preferred 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 Preferred 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
Preferred 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.
"Preferred Security" means an undivided beneficial ownership interest
in the assets of the Trust having a Liquidation Amount of $25 and having rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of a Preferred Security or Securities, substantially in the form
attached as Exhibit E.
"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.
"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.
"Relevant Trustee" has the meaning specified in Section 8.10.
"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 June 1, 1997, among the Depositor, the Guarantor and the Indenture
Trustee, as heretofore supplemented and as supplemented by the Supplemental
Indenture.
"Supplemental Indenture" means the Second Supplemental Indenture, dated
as of June 25, 1998, by and among the Depositor, the Guarantor and the Indenture
Trustee.
"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 Preferred Securities Certificates.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Underwriting Agreement" means the Underwriting Agreement, dated June
18, 1998, among the Depositor, the Guarantor, the Trust and the Underwriters
named therein.
ARTICLE II
Establishment of the Trust
. The Trust continued hereby shall be known as "Southern Company Capital Trust
IV", 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.
. 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
E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre Road, Suite
200, Wilmington, Delaware 19805-1266, 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 30303. The Depositor may change the
principal place of business of the Trust at any time by giving notice thereof to
the Trustees.
. 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.
. Contemporaneously with the execution and delivery of this Trust Agreement, the
Administrative Trustees, on behalf of the Trust, shall execute and deliver to
the underwriters named in the Underwriting Agreement Preferred Securities
Certificates, registered in the name of the nominee of the initial Clearing
Agency, in an aggregate amount of 8,000,000 Preferred Securities having an
aggregate Liquidation Amount of $200,000,000, against receipt of the aggregate
purchase price of such Preferred Securities of $200,00,000, which amount the
Administrative Trustees shall promptly deliver to the Property Trustee.
Section 2.05 Subscription and Purchase of Junior Subordinated Notes;
Issuance of the Common . 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 227,440 Common
Securities having an aggregate Liquidation Amount of $6,186,000, 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 $206,186,000, 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 $206,186,000.
. 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.
. 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)(iii), 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 Preferred
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 Preferred Securities
upon such securities exchange or exchanges, if any, as shall be
determined by the Depositor and, if required, the registration of the
Preferred 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 Preferred 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 for filing by the Trust with the Commission a
registration statement on Form S-3 under the Securities Act in relation
to the Preferred 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 Preferred
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 prepare for filing by the Trust an application to the
New York Stock Exchange or any other national stock exchange or the
NASDAQ National Market for listing upon notice of issuance of any
Preferred Securities;
(iv) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto;
(v) to negotiate the terms of the Underwriting Agreement
providing for the sale of the Preferred Securities and to execute,
deliver and perform the Underwriting Agreement on behalf of the Trust;
and
(vi) 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 Preferred Securities.
. The assets of the Trust shall consist of the 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.
. 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 Preferred 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
Preferred 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 Preferred Securities are
then listed, (iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred 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
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on September 30, 1998. 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 7-1/8% per annum of the Liquidation Amount of the Trust Securities. The
amount of Distributions payable for any full quarterly 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 quarterly, 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 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 Preferred 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
Preferred Securities are in book-entry only form, irrevocably deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price. If the Preferred 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 Preferred
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 Preferred 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 Preferred Securities, with such adjustments that each amount so allocated
shall be divisible by $25. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred 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 $25 or integral multiple thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $25; provided, however, that
before undertaking redemption of the Preferred 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 Preferred Securities selected for
redemption and, in the case of any Preferred 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 Preferred Securities shall relate, in the case of
any Preferred Securities redeemed or to be redeemed only in part, to the portion
of the Liquidation Amount of Preferred 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 Preferred 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 Preferred
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 Preferred 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, Preferred
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 Preferred Securities have been cured, waived or
otherwise eliminated. Until any such Events of Default under this Trust
Agreement with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not the Holder of the Common Securities,
and only the Holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.
. Payments in respect of the Preferred 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 Preferred 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.
. 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
. 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.
. Each of the Preferred and Common Securities Certificates shall be issued in
minimum denominations of $25 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.
. 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.
. 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 Preferred 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 Preferred Securities Certificates as herein provided. The
Property Trustee shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Preferred 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 Preferred 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
Preferred Securities that have been called for redemption. At the option of a
Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.08.
Every Preferred 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 Preferred 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 Preferred 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 Preferred 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.
. 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.
. 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.
. The Administrative Trustees shall maintain in the Borough of Manhattan, New
York, an office or offices or agency or agencies where Preferred 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.
. 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.
. 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 Preferred Securities Certificates; Common
Securities Certificate
(a) The Preferred Securities Certificates, upon original issuance, will
be issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred 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 Preferred Securities Certificate representing such beneficial owner's
interest in such Preferred Securities, except as provided in Section 5.13.
Unless and until Definitive Preferred 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 Preferred Securities
Certificates (including the payment of principal of and interest on the
Book-Entry Preferred Securities and the giving of instructions or
directions to Owners of Book-Entry Preferred Securities) as the sole
Holder of Book-Entry Preferred 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 Preferred
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 Preferred 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 Preferred 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.
. To the extent a notice or other communication to the Owners is required under
this Trust Agreement, unless and until Definitive Preferred 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.
. 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 Preferred 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 Preferred Securities. Upon surrender to the
Administrative Trustees of the typewritten Preferred Securities Certificate or
Certificates representing the Book-Entry Preferred Securities Certificates by
the Clearing Agency, accompanied by registration instructions, the
Administrative Trustees or any one of them shall execute and authenticate the
Definitive Preferred 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 Preferred Securities Certificates, the Trustees shall
recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred 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.
. 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 Preferred 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 Preferred 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
Preferred Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of Preferred Securities, except
pursuant to a subsequent vote of the Holders of Preferred Securities. The
Property Trustee shall notify all Holders of the Preferred 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 Preferred 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 Preferred 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 Preferred
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
Preferred Securities. In addition to obtaining the foregoing approvals of the
Holders of the Preferred 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.
. Notice of all meetings of the Preferred Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Administrative Trustees
pursuant to Section 10.08 to each Preferred 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.
. 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 Preferred Securityholders of
record of 25% of the Preferred 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 Preferred Securityholders to vote on any
matters as to which Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Preferred 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
Preferred Securityholders of record present, in person or by proxy, holding more
than 66-2/3% of the Preferred Securities (based upon their Liquidation Amount)
held by the Preferred 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.
. Securityholders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.
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.
. 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).
. 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.
. 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 Preferred 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.
. 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
. 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.
. 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.
. 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 Preferred
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.
. 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.
. 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.
. 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 Preferred
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
Preferred Securities, by Act of the Securityholders of a majority in Liquidation
Amount of the Preferred 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).
. 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.
. 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.
. 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,
1999, 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.
. 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.
. 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.
. If (i) the Trust fails to pay Distributions in full on the Preferred
Securities for more than 20 consecutive quarterly distribution periods, or (ii)
an Event of Default occurs and is continuing, then the Holders of Preferred
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 Preferred 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 Preferred 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 Preferred 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 Preferred 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
Preferred 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
. The Trust shall automatically terminate on December 31, 2033 (the "Expiration
Date") or earlier pursuant to Section 9.02.
. 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 delivery of written direction to the Property Trustee
by the Depositor at any time (which direction is optional and wholly
within the discretion of the Depositor) to terminate the Trust and
distribute the Junior Subordinated Notes to Securityholders as provided
in Section 9.04; and
(iii) the payment at maturity or redemption of all of the
Junior Subordinated Notes, and the consequent payment of the Preferred
Securities.
. 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.
. 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 Preferred Securities
to be listed on such securities exchange as the Preferred 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.
. 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 Preferred
Securities, except that, if an Indenture Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities.
ARTICLE X
Miscellaneous Provisions
. The Depositor shall cause the Guarantor, contemporaneously with the execution
and delivery of this Trust Agreement, to execute and deliver the Expense
Agreement.
. 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.
. 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.
. 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.
. 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.
. The Article and Section headings are for convenience only and shall
not affect the construction of this Trust Agreement.
. 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
Preferred Securityholder, to such Preferred 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), E.A. Delle Donne Corporate
Center, Montgomery Building, 1011 Centre Road, Suite 200, Wilmington, Delaware
19805-1266, 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 IV 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.
. 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
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 IV
Common Securities
(liquidation amount $25 per Common Security)
Southern Company Capital Trust IV, 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 $25 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 June 1, 1998, 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 ________, ____.
Southern Company Capital Trust IV
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
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
THIS AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement") is
made as of June 1, 1998, between The Southern Company, a Delaware corporation
(the "Company"), and Southern Company Capital Trust IV, 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
IV 7-1/8% Trust Originated Preferred Securities (the "Preferred 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 June
1, 1998 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
Preferred 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 Preferred
Securities or other similar interests in the Trust the amounts due such holders
pursuant to the terms of the Preferred 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
Preferred Securities or any Beneficiary must restore payment of any sums paid
under the Preferred Securities, under any Obligation, under the Preferred
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 Preferred 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 Preferred 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 IV
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 IV
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 IV 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.
Certificate Number Number of Preferred Securities
---------
P-1 CUSIP NO. 842636201
Certificate Evidencing Preferred Securities
of
Southern Company Capital Trust IV
7-1/8% Trust Originated Preferred Securities
(Liquidation amount $25 per Preferred Security)
Southern Company Capital Trust IV, 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 (_______)
Preferred Securities of the Trust representing undivided beneficial interests in
the assets of the Trust and designated the Southern Company Capital Trust IV
7-1/8% Trust Originated Preferred Securities (liquidation amount $25 per
Preferred Security) (the "Preferred Securities"). The Preferred 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 Preferred Securities are set forth in, and
this certificate and the Preferred 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 June 1, 1998, as the same may
be amended from time to time (the "Trust Agreement"), including the designation
of the terms of Preferred 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 Preferred Securities
Guarantee Agreement between the Company and Bankers Trust Company, as guarantee
trustee, dated as of June 1, 1998, 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 ________, ____.
SOUTHERN COMPANY CAPITAL TRUST IV
By:
Wayne Boston,
as Administrative Trustee
By:
Richard A. Childs,
as Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Trust Agreement.
as Administrative Trustee
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
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 Preferred 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 Preferred
Securities Certificate)
Exhibit 4.8
PREFERRED SECURITIES GUARANTEE AGREEMENT
Between
The Southern Company
(as Guarantor)
and
Bankers Trust Company
(as Trustee)
dated as of
June 1, 1998
<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..................4
SECTION 2.05. Evidence of Compliance with
Conditions Precedent..............................4
SECTION 2.06. Events of Default; Waiver....................5
SECTION 2.07. Event of Default; Notice.....................5
SECTION 2.08. Conflicting Interests........................5
ARTICLE III................................................5
SECTION 3.01. Powers and Duties of the Trustee.............5
SECTION 3.02. Certain Rights of Trustee....................7
SECTION 3.03. Compensation; Fees; Indemnity................8
ARTICLE IV.................................................9
SECTION 4.01. Trustee; Eligibility.........................9
SECTION 4.02. Appointment, Removal and
Resignation of Trustee............................9
ARTICLE V.................................................10
SECTION 5.01. Guarantee...................................10
SECTION 5.02. Waiver of Notice and Demand.................10
SECTION 5.03. Obligations Not Affected....................10
SECTION 5.04. Rights of Holders...........................11
SECTION 5.05. Guarantee of Payment........................11
SECTION 5.06. Subrogation.................................12
SECTION 5.07. Independent Obligations.....................12
ARTICLE VI................................................12
SECTION 6.01. Subordination...............................12
ARTICLE VII...............................................12
SECTION 7.01. Termination.................................12
ARTICLE VIII..............................................13
SECTION 8.01. Successors and Assigns......................13
SECTION 8.02. Amendments..................................13
SECTION 8.03. Notices.....................................13
SECTION 8.04. Benefit.....................................14
SECTION 8.05. Interpretation..............................14
SECTION 8.06. Governing Law...............................15
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT ("Guarantee Agreement"),
dated as of June 1, 1998, 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 Preferred Securities (as defined herein) of SOUTHERN COMPANY
CAPITAL TRUST IV, a Delaware statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of June 1, 1998, 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 June
25, 1998 $200,000,000 aggregate liquidation amount of its 7-1/8% Trust
Originated Preferred Securities (the "Preferred Securities") representing
preferred undivided beneficial interests in the assets of the Trust and having
the terms set forth in the Trust Agreement;
WHEREAS, the Preferred 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 Preferred
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 Preferred
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 Preferred 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 Preferred 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 Preferred 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 Preferred 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 Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Preferred 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 Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
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 June 1,
1997, among the Company, as Subordinated Note Issuer, the Guarantor, as
guarantor, and Bankers Trust Company, as trustee, as heretofore supplemented and
as supplemented by the Second Supplemental Indenture dated as of June 25, 1998,
by and among the Company, the Guarantor and Bankers Trust Company, as trustee.
"Majority in liquidation amount of Preferred Securities" means a vote
by Holder(s) of Preferred Securities, voting separately as a class, of more than
50% of the liquidation amount of all Preferred 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.
"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, 1999, the Trustee shall provide to the Holders of
the Preferred 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 Preferred 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 Preferred 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 Preferred 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 Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred 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 Preferred 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 Preferred
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 Preferred 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 Preferred 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 Preferred 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 Preferred Securities, (ii) the distribution of Junior Subordinated Notes
to the Holders in exchange for all of the Preferred 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 Preferred 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 Preferred 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 Preferred 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 IV
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 Preferred 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,
as Trustee
By:
Name:
Title:
