<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 20, 1997
REGISTRATION NO. 333-____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D. C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
THE COLONIAL BANCGROUP, INC. COLONIAL CAPITAL II
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CHARTER)
DELAWARE
(STATE OF INCORPORATION) DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR
ORGANIZATION)
6711
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE
NUMBER) 6719
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE
63-0661573 NUMBER)
(I.R.S. EMPLOYER IDENTIFICATION NO.)
APPLIED FOR
ONE COMMERCE STREET, SUITE 800 (I.R.S. EMPLOYER IDENTIFICATION NO.)
MONTGOMERY, ALABAMA 36104
(334) 240-5000 C/O THE COLONIAL BANCGROUP, INC.
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND TELEPHONE ONE COMMERCE STREET, SUITE 800
NO.) MONTGOMERY, ALABAMA 36104
(334) 240-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
W. FLAKE OAKLEY, IV INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE
SECRETARY OFFICES)
POST OFFICE BOX 1108
MONTGOMERY, ALABAMA 36102
(NAME AND ADDRESS OF AGENT FOR SERVICE)
</TABLE>
COPIES TO:
MICHAEL D. WATERS, ESQUIRE
MILLER, HAMILTON, SNIDER & ODOM, L.L.C.
ONE COMMERCE STREET, SUITE 802
MONTGOMERY, ALABAMA 36101-0019
FACSIMILE 334-265-4533
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE (1) FEE
---------- ----------- --------- ---
<S> <C> <C> <C> <C>
8.92% Capital Securities of
Colonial Capital II $70,000,000 100% $70,000,000 $21,212.12
----------- ---- ----------- ----------
Junior Subordinated Deferrable
Interest Debentures of
The Colonial BancGroup,
Inc. (2) $72,165,000 N/A N/A N/A
The Colonial BancGroup, Inc.
Guarantee with respect to
Capital Securities and
Common Securities (3) N/A N/A N/A N/A
Total (4) $70,000,000(5) 100% $70,000,000 $21,212.12
</TABLE>
(1) Estimated solely for the purpose of computing the registration
fee.
(2) The Junior Subordinated Deferrable Interest Debentures (the
"Junior Subordinated Debentures") were originally purchased by
Colonial Capital I with the proceeds of the sale of capital securities
of Colonial Capital I, which are the subject of the Exchange Offer of
Colonial Capital II. No separate consideration will be received for
the Junior Subordinated Debentures distributed upon any liquidation of
Colonial Capital II.
(3) No separate consideration will be received for The Colonial
BancGroup, Inc. Guarantee.
(4) This Registration Statement is deemed to cover the Junior
Subordinated Debentures of The Colonial BancGroup, Inc., the rights of
holders of Junior Subordinated Debentures of The Colonial BancGroup,
Inc under the Indenture, the rights of holders of Capital Securities
of Colonial Capital II under the Trust Agreement, the rights of
holders of the Capital Securities under the Guarantee and the Expense
Agreement entered into be The Colonial BancGroup, Inc. which taken
together fully and unconditionally guarantee the obligations of
Colonial Capital II under the Capital Securities.
(5) Such amount represents the initial public offering price of
the Colonial Capital I Capital Securities to be exchanged for Capital
Securities of Colonial Capitol II hereunder and the principal amount
of Junior Subordinated Debentures that may be distributed upon any
liquidation of Colonial Capital II.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON EACH SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SECTION 8(A), MAY DETERMINE.
<PAGE> 3
THE COLONIAL BANCGROUP, INC.
CROSS REFERENCE SHEET
TO ITEMS IN FORM S-4
<TABLE>
<CAPTION>
FORM S-4 ITEM NUMBER AND CAPTION CAPTION IN PROSPECTUS OR OTHER
LOCATION IN REGISTRATION STATEMENT
<S> <C> <C>
Item 1. Forepart of Registration Statement Facing page,
and Outside Front Cover Page of Cross Reference Sheet,
Prospectus Outside front cover page of
Prospectus
Item 2. Inside Front and Outside Back "AVAILABLE INFORMATION,"
Cover Pages of Prospectus "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE,"
"TABLE OF CONTENTS"
Item 3. Risk Factors, Ratio of Earnings "SUMMARY," "RISK FACTORS,"
to Fixed Charges and Other "THE COLONIAL BANCGROUP,
Information INC. - Consolidated Ratios of Earnings to Fixed Charges and Ratios of
Earnings to Combined Fixed Charges and Preferred Stock Dividends,"
"SELECTED CONSOLIDATED FINANCIAL DATA AND OTHER INFORMATION"
Item 4. Terms of the Transaction "INCORPORATION OF CERTAIN DOCUMENTS" BY REFERENCE," Outside Front
Cover Page; "SUMMARY"; "THE COLONIAL BANCGROUP, INC." "COLONIAL
CAPITAL II," "USE OF PROCEEDS;" "CAPITALIZATION;" "ACCOUNTING
TREATMENT;" "THE EXCHANGE OFFER;" "DESCRIPTION OF NEW SECURITIES";
"DESCRIPTION OF OLD SECURITIES"; "RELATIONSHIP AMONG THE CAPITAL
SECURITIES, THE SUBORDINATED DEBENTURES, THE
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
GUARANTEE AND THE EXPENSE AGREEMENT; "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES"; "CERTAIN ERISA CONSIDERATIONS"; "PLAN OF DISTRIBUTION"
Item 5. Pro Forma Financial Information "CAPITALIZATION"
Item 6. Material Contacts with the Company Not Applicable
Item 7. Additional Information Required for Not Applicable
Reoffering by Persons and Parties
Deemed to be Underwriters
Item 8. Interests of Named Experts and "VALIDITY OF NEW
Counsel SECURITIES" and
"EXPERTS"
Item 9. Disclosure of Commission Position Not Applicable; See Items
on Indemnification for Securities 20 and 22 below
Act Liabilities
Item 10. Information with Respect to S-3 "INCORPORATION OF CERTAIN
Registrants DOCUMENTS BY REFERENCE,"
"THE COLONIAL BANCGROUP,
INC."
Item 11. Incorporation of Certain Information "INCORPORATION OF CERTAIN
by Reference DOCUMENTS INCORPORATED BY
REFERENCE"
Item 12. Information with Respect to S-2 or Not Applicable
S-3 Registrants
Item 13. Incorporation of Certain Information Not Applicable
by Reference
Item 14. Information with Respect to "AVAILABLE INFORMATION,"
Registrants Other Than S-3 or S-2 "COLONIAL CAPITAL I,"
Registrants "COLONIAL CAPITAL II"
Item 15. Information with Respect to S-3 Not Applicable
Companies
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
Item 16. Information with Respect to S-2 or Not Applicable
S-3 Companies
Item 17. Information with Respect to Not Applicable
Companies Other than S-3 or S-2
Companies
Item 18. Information if Proxies, Consents or Not Applicable
Authorizations are to be Solicited
Item 19. Information if Proxies, Consents or "INCORPORATION OF CERTAIN
Authorizations are not to be DOCUMENTS BY REFERENCE."
Solicited or in an Exchange Offer
Item 20. Indemnification of Directors and PART II, Item 20
Officers
Item 21. Exhibits and Financial Statement PART II, Item 21
Schedules
Item 22. Undertakings PART II, Item 22
</TABLE>
<PAGE> 6
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY , 1997
PROSPECTUS
$70,000,000
[LOGO] COLONIAL CAPITAL II
OFFER TO EXCHANGE ITS 8.92% CAPITAL SECURITIES,
SERIES A, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, FOR ANY AND ALL OF THE OUTSTANDING 8.92%
CAPITAL SECURITIES, SERIES A, OF COLONIAL CAPITAL I
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
THE COLONIAL BANCGROUP, INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED.
---------------------
Colonial Capital II, a business trust created under the laws of the State
of Delaware (the "Issuer"), hereby offers, upon the terms and subject to the
conditions set forth in this Prospectus (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the accompanying Letter
of Transmittal (which together constitute the "Exchange Offer"), to exchange up
to $70,000,000 aggregate Liquidation Amount of its 8.92% Capital Securities,
Series A (Liquidation Amount $1,000 per Capital Security) (the "New Capital
Securities") which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to a Registration Statement (as defined
herein) of which this Prospectus constitutes a part, for a like Liquidation
Amount of the outstanding 8.92% Capital Securities, Series A, of Colonial
Capital I (Liquidation Amount $1,000 per Capital Security) (the "Old Capital
Securities"), of which $70,000,000 aggregate Liquidation Amount is outstanding.
Colonial Capital I is also a business trust formed under the laws of the State
of Delaware (the "Old Issuer"), pursuant to an Amended and Restated Trust
Agreement dated January 29, 1997 (the "Old Trust Agreement") among The Colonial
BancGroup, Inc., a Delaware corporation (the "Corporation"), as Depositor,
Wilmington Trust Company, as Property Trustee, and Wilmington Trust Company as
Delaware Trustee. Pursuant to the Exchange Offer, the Corporation is also
exchanging (i) its guarantee with respect to the payment of Distributions (as
defined herein) and payments on liquidation or redemption of the Old Capital
Securities (the "Old Guarantee") for a like guarantee with respect to the New
Capital Securities (the "New Guarantee"), and (ii) all of its outstanding 8.92%
Junior Subordinated Deferrable Interest Debentures issued on January 29, 1997
(the "Old Subordinated Debentures"), of which $72,165,000 aggregate principal
amount is outstanding, for a like aggregate principal amount of its 8.92% Junior
Subordinated Deferrable Interest Debentures (the "New Subordinated Debentures"),
which New Guarantee and New Subordinated Debentures also have been registered
under the Securities Act. The Old Capital Securities, the Old Guarantee and the
Old Subordinated Debentures are collectively referred to herein as the "Old
Securities" and the New Capital Securities, the New Guarantee and the New
Subordinated Debentures are collectively referred to herein as the "New
Securities".
(Cover continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR CERTAIN INFORMATION RELEVANT TO AN
INVESTMENT IN THE CAPITAL SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES
DURING AND UNDER WHICH PAYMENT OF DISTRIBUTIONS ON THE CAPITAL SECURITIES MAY BE
DEFERRED AND CERTAIN RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
---------------------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OR THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is , 1997
<PAGE> 7
(cover page continued)
The terms of the New Securities are identical in all material respects to
the respective terms of the Old Securities, except that (i) the New Securities
have been registered for sale under the Securities Act and therefore will not be
subject to certain restrictions on transfer applicable to the Old Securities,
(ii) the New Capital Securities will not provide for any increase in the
Distribution rate thereon and (iii) the New Subordinated Debentures will not
provide for any increase in the interest rate thereon. See "Description of New
Securities" and "Description of Old Securities". The New Capital Securities are
being offered for exchange in order to satisfy certain obligations of the
Corporation and the Old Issuer under the Exchange and Registration Rights
Agreement, dated as of January 29, 1997 (the "Registration Rights Agreement"),
among the Corporation, the Old Issuer and the Initial Purchasers (as defined
herein) of the Old Capital Securities.
The Old Capital Securities represent preferred undivided beneficial
interests in the assets of the Old Issuer. The Corporation is the owner of all
of the beneficial interests represented by the common securities of the Old
Issuer (the "Old Common Securities" and, collectively with the Old Capital
Securities, the "Old Trust Securities"). The Old Issuer was created for the sole
purpose of issuing the Old Trust Securities and investing the proceeds thereof
in the Old Subordinated Debentures. The Old Subordinated Debentures will mature
on January 15, 2027 (the "Stated Maturity"). The Old Capital Securities will
have a preference under certain circumstances with respect to cash distributions
and amounts payable on liquidation, redemption or otherwise over the Old Common
Securities. In the event that the Exchange Offer is consummated, any Old Capital
Securities which have not been exchanged and which remain outstanding after the
consummation of the Exchange Offer will continue to have the same rights (and
restrictions) as they currently have, except those rights which terminate upon
consummation of the Exchange Offer.
The New Capital Securities represent preferred undivided beneficial
ownership interests in the assets of the Issuer. The Corporation is the owner of
all of the beneficial interests represented by common securities of the Issuer
(the "New Common Securities" and, collectively with the New Capital Securities,
the "New Trust Securities"). Wilmington Trust Company is the Property Trustee of
the Issuer. The Issuer exists for the sole purposes of (i) effecting the
Exchange Offer for the New Capital Securities, (ii) acquiring the New
Subordinated Debentures, and (iii) engaging in other activities necessary,
advisable or incidental thereto. The New Subordinated Debentures will mature on
the Stated Maturity, January 15, 2027. The New Capital Securities will have a
preference under certain circumstances with respect to cash distributions and
amounts payable on liquidation or redemption over the New Common Securities. See
"Description of New Securities -- Subordination of Common Securities."
As used herein, (i) the "Indenture" means the Junior Subordinated Indenture
dated January 29, 1997, as amended and supplemented from time to time, pursuant
to which the Old Subordinated Debentures were issued and the New Subordinated
Debentures will be issued, between the Corporation and Wilmington Trust Company,
as trustee (the "Debenture Trustee"), (ii) the "New Trust Agreement" means the
Amended and Restated Trust Agreement dated as of , 1997, relating
to the Issuer among the Corporation, as Depositor, Wilmington Trust Company, as
Property Trustee (the "Property Trustee") and Wilmington Trust Company, as
Delaware Trustee (the "Delaware Trustee") (the Property Trustee and Delaware
Trustee collectively, the "Issuer Trustees"), (iii) the "New Guarantee
Agreement" means the Guarantee Agreement between the Corporation and Wilmington
Trust Company, as trustee (the "Guarantee Trustee") dated as of ,
1997, providing the New Guarantee, on the terms and conditions described herein,
for the benefit of holders of the New Capital Securities (the "Guarantee"), and
(iv) the "New Expense Agreement" means the Expense Agreement between the
Corporation and the Issuer dated as of , 1997, respecting
the payment of certain expenses by the Corporation. In addition, as the context
may require, unless expressly stated otherwise, (i) the "Capital Securities"
includes the Old Capital Securities and the New Capital Securities, (ii) the
"Subordinated Debentures" includes the Old Subordinated Debentures and the New
Subordinated Debentures, (iii) the "Guarantee" includes the Old Guarantee and
the New Guarantee, (iv) the "Common Securities" includes the Old Common
Securities and the New Common Securities, (v) the "Trust Agreement" includes the
Old Trust Agreement and the New Trust Agreement, and (vi) the "Expense
Agreement" includes the Old Expense Agreement and the New Expense Agreement. The
"Old Expense Agreement" means the Expense Agreement
ii
<PAGE> 8
(cover page continued)
dated January 29, 1997, pursuant to which the Corporation has guaranteed payment
of certain expenses of the Old Issuer.
Except as provided below, the Capital Securities will be represented by
global Capital Securities in fully registered form, deposited with a custodian
for and registered in the name of a nominee of The Depository Trust Company
("DTC"). Beneficial interests in such Capital Securities will be shown on, and
transfers thereof will be effected through, records maintained by DTC and its
participants. Beneficial interests in such Capital Securities will trade in
DTC's Same-Day Funds Settlement System and secondary market trading activity in
such interests will therefore settle in immediately available funds. The Capital
Securities will be issued, and may be transferred, only in blocks having a
Liquidation Amount of not less than $100,000 (100 Capital Securities). See
"Description of New Securities -- Book-Entry, Delivery and Form."
Holders of the Capital Securities will be entitled to receive preferential
cumulative cash distributions accruing from January 15, 1997 and payable
semi-annually in arrears on July 15 and January 15 of each year, commencing July
15, 1997, at the annual rate of 8.92% of the Liquidation Amount of $1,000 per
Capital Security ("Distributions"). The Corporation has the right to defer
payment of interest on the Subordinated Debentures at any time or from time to
time for a period not exceeding 10 consecutive semi-annual periods with respect
to each deferral period (each, an "Extension Period"), provided that no
Extension Period may extend beyond the Stated Maturity of the Subordinated
Debentures. Upon the termination of any such Extension Period and the payment of
all amounts then due, the Corporation may elect to begin a new Extension Period,
subject to the requirements set forth herein. If interest payments on the
Subordinated Debentures are so deferred, Distributions on the Capital Securities
will also be deferred and the Corporation will not be permitted, subject to
certain exceptions described herein, to declare or pay any cash distributions
with respect to the Corporation's capital stock or debt securities of the
Corporation that rank pari passu with or junior to the Subordinated Debentures.
During an Extension Period, interest on the Subordinated Debentures will
continue to accrue (and the amount of Distributions to which holders of the
Capital Securities are entitled will accumulate) at the rate of 8.92% per annum,
compounded semi-annually, and holders of the Capital Securities will be required
to accrue interest income for United States federal income tax purposes. See
"Description of Subordinated Debentures -- Option to Extend Interest Payment
Period" and "Certain Federal Income Tax Consequences -- Interest Income and
Original Issue Discount".
The Corporation has, through the Guarantee, the Trust Agreement, the
Subordinated Debentures, the Indenture and the Expense Agreement, taken
together, fully and unconditionally guaranteed all of the Issuer's obligations
under the Capital Securities (as is the case with the Old Issuer). See
"Relationship Among The Capital Securities, The Subordinated Debentures, The
Guarantee and the Expense Agreement -- Full and Unconditional Guarantee". The
Guarantee of the Corporation guarantees the payment of Distributions and
payments on liquidation or redemption of the Capital Securities, but only in
each case to the extent of funds held by the Issuer, as described herein. See
"Description of Guarantee". If the Corporation does not make interest payments
on the Subordinated Debentures held by the Issuer, the Issuer will have
insufficient funds to pay Distributions on the Capital Securities. The Guarantee
does not cover payment of Distributions when the Issuer does not have sufficient
funds to pay such Distributions. In such event, under the Indenture a holder of
the Capital Securities may institute a legal proceeding directly against the
Corporation to enforce payment of such amounts. See "Description of Subordinated
Debentures -- Enforcement of Certain Rights by Holders of Capital Securities".
The obligations of the Corporation under the Guarantee and the Subordinated
Debentures are subordinate and junior in right of payment to all Senior
Indebtedness (as defined herein) of the Corporation. See "Description of
Subordinated Debentures -- Subordination".
The Capital Securities are subject to mandatory redemption, in whole or in
part, upon repayment of the Subordinated Debentures at maturity or their earlier
redemption. The Subordinated Debentures are redeemable prior to maturity at the
option of the Corporation (i) on or after January 29, 2007, in whole at any time
or in part from time to time at the redemption prices set forth herein, or (ii)
in whole (but not in part), at any time within 90 days following the occurrence
and continuation of a Tax Event, Investment Company Event or Capital Treatment
Event (as defined herein), at redemption prices set forth herein. See
"Description of New Securities -- Redemption".
iii
<PAGE> 9
(cover page continued)
The holder of the Common Securities (i.e., the Corporation) will have the
right at any time to dissolve the Issuer, and, after satisfaction of liabilities
to creditors of the Issuer in accordance with applicable law and the Expense
Agreement, cause the Subordinated Debentures to be distributed to the holders of
the Capital Securities in liquidation of the Issuer, subject to the Issuer
having received an opinion of counsel to the effect that such distribution will
not be a taxable event to holders of Capital Securities. See "Description of New
Securities -- Liquidation Distribution Upon Dissolution".
The Subordinated Debentures are unsecured and are subordinated and junior
in right of payment to all Senior Indebtedness of the Corporation.
In the event of the dissolution of the Issuer, after satisfaction of
liabilities to creditors of the Issuer in accordance with applicable law and the
Expense Agreement, the holders of the Capital Securities will be entitled to
receive as a preference a Liquidation Amount of $1,000 per Capital Security plus
accumulated and unpaid Distributions thereon to the date of payment, which may
be in the form of a distribution of a Like Amount (as defined herein) in
Subordinated Debentures, subject to certain exceptions. See "Description of New
Securities -- Liquidation Distribution Upon Dissolution".
The Issuer is making the Exchange Offer of the New Capital Securities in
reliance on the position of the staff of the Division of Corporation Finance of
the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither the Corporation nor the Issuer has sought its own interpretive
letter, and there can be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of the Division of
Corporation Finance, and subject to the two immediately following sentences, the
Corporation and the Issuer believe that New Capital Securities issued pursuant
to this Exchange Offer in exchange for Old Capital Securities may be offered for
resale, resold and otherwise transferred by a holder thereof (other than a
holder who is a broker-dealer) without further compliance with the registration
and prospectus delivery requirements of the Securities Act, provided that such
New Capital Securities are acquired in the ordinary course of such holder's
business and that such holder is not participating, and has no arrangement or
understanding with any person to participate, in a distribution (within the
meaning of the Securities Act) of such New Capital Securities. However, any
holder of Old Capital Securities who is an "affiliate" of the Corporation, the
Issuer or the Old Issuer within the meaning of Rule 405 under the Securities Act
(an "Affiliate") or who intends to participate in the Exchange Offer for the
purpose of distributing New Capital Securities, or any broker-dealer who
purchased Old Capital Securities from the Old Issuer to resell pursuant to Rule
144A under the Securities Act ("Rule 144A") or any other available exemption
under the Securities Act, (i) will not be able to rely on the interpretations of
the staff of the Division of Corporation Finance of the Commission set forth in
the above-mentioned interpretive letters, and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Old Capital Securities unless
such sale is made pursuant to an exemption from such requirements. In addition,
as described below, if any broker-dealer (a "Participating Broker-Dealer") holds
Old Capital Securities acquired for its own account as a result of market-making
or other trading activities and exchanges such Old Capital Securities for New
Capital Securities, then such Participating Broker-Dealer must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of such New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an Affiliate, (ii) any New Capital Securities to be
received by it are being acquired in the ordinary course of its business, (iii)
it has no arrangement or understanding with any person to participate in a
distribution (within the meaning of the Securities Act) of such New Capital
Securities, and (iv) if such holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a distribution (within the meaning
of the Securities Act) of such New Capital Securities, otherwise the limitations
on transfer described above may apply. In addition, the Corporation and the
Issuer may require such holder, as a condition to such holder's eligibility to
participate in the Exchange Offer, to furnish to the Corporation and the Issuer
(or an agent thereof) in writing information as to the number of
iv
<PAGE> 10
(cover page continued)
"beneficial owners" (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), on behalf of whom such
holder holds Old Capital Securities to be exchanged in the Exchange Offer. Each
Participating Broker-Dealer that receives New Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge that it acquired the Old
Capital Securities for its own account as the result of market-making activities
or other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a Participating Broker-Dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. Based on the position taken by the staff of the Division of
Corporation Finance of the Commission in the interpretive letters referred to
above, the Corporation and the Issuer believe that Participating Broker-Dealers,
may fulfill their prospectus delivery requirements with respect to the New
Capital Securities received upon exchange of such Old Capital Securities (other
than Old Capital Securities which represent an unsold allotment from the
original sale of the Old Capital Securities) with a prospectus meeting the
requirements of the Securities Act, which may be the prospectus prepared for an
exchange offer so long as it contains a description of the plan of distribution
with respect to the resale of such New Capital Securities. Accordingly, this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer during the period referred to below in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities where such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Corporation and the Issuer have agreed that
this Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of such New
Capital Securities for a period ending 90 days after the Expiration Date (as
defined herein) or, if earlier, when all such New Capital Securities have been
disposed of by such Participating Broker-Dealer. See "Plan of Distribution". Any
person, including any Participating Broker-Dealer, who is an Affiliate may not
rely on such interpretive letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. See "The Exchange Offer -- Resales of New Capital
Securities".
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal or delivery of an Agent's Message (as
defined herein) that, upon receipt of notice from the Corporation or the Issuer
of the occurrence of any event or the discovery of any fact which makes any
statement contained or incorporated by reference in this Prospectus untrue in
any material respect or which causes this Prospectus to omit to state a material
fact necessary in order to make the statements contained or incorporated by
reference herein, in the light of the circumstances under which they were made,
not misleading, or of the occurrence of certain other events specified in the
Registration Rights Agreement, such Participating Broker-Dealer will suspend the
sale of New Securities pursuant to this Prospectus until the Corporation or the
Issuer has amended or supplemented this Prospectus to correct such misstatement
or omission and has furnished copies of the amended or supplemented Prospectus
to such Participating Broker-Dealer, or the Corporation or the Issuer has given
notice that the sale of the New Capital Securities (or the New Guarantee or the
New Subordinated Debentures, as applicable) may be resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited secondary market
and no public market for the Old Capital Securities. The New Capital Securities
will be a new issue of securities for which there currently is no market.
Although the Initial Purchasers have informed the Corporation and the Issuer
that they each currently intend to make a market in the New Capital Securities,
they are not obligated to do so, and any such market making may be discontinued
at any time without notice. Accordingly, there can be no assurance as to the
development or liquidity of any market for the New Capital Securities. The
Corporation currently does not intend to apply for listing of the New Capital
Securities on any securities exchange or for quotation through the National
Association of Securities Dealers Automated Quotation System.
Any Old Capital Securities not tendered and accepted in the Exchange Offer
will remain outstanding and will be entitled to all the same rights and will be
subject to the same limitations applicable thereto under the Old
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<PAGE> 11
(cover page continued)
Trust Agreement (except for those rights which terminate upon consummation of
the Exchange Offer). Following consummation of the Exchange Offer, the holders
of Old Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Corporation, the Issuer nor
the Old Issuer will have any further obligation to such holders (other than
under certain limited circumstances) to provide for registration under the
Securities Act of the Old Capital Securities held by them. To the extent that
Old Capital Securities are tendered and accepted in the Exchange Offer, a
holder's ability to sell untendered Old Capital Securities could be adversely
affected. See "Risk Factors -- Consequences of a Failure to Exchange Old Capital
Securities".
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS PROSPECTUS
AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO
TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or prior to 5:00
p.m., New York City time, on , 1997 (such time on such date being
hereinafter called the "Expiration Date"), unless the Exchange Offer is extended
by the Corporation and the Issuer (in which case the term "Expiration Date"
shall mean the latest date and time to which the Exchange Offer is extended).
Tenders of Old Capital Securities may be withdrawn at any time on or prior to
the Expiration Date. The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Old Capital Securities being tendered for exchange.
However, the Exchange Offer is subject to certain events and conditions which
may be waived by the Corporation or the Issuer and to the terms and provisions
of the Registration Rights Agreement. Old Capital Securities may be tendered in
whole or in part having a Liquidation Amount of not less than $100,000 (100
Capital Securities) and or any integral multiple of $1,000 Liquidation Amount (1
Capital Security) in excess thereof. The Corporation has agreed to pay all
expenses of the Exchange Offer, except as otherwise specified herein. See "The
Exchange Offer -- Fees and Expenses". Each New Capital Security will pay
cumulative Distributions from the most recent Distribution Date (as defined
herein) on the Old Capital Securities surrendered in exchange for such New
Capital Securities or, if no Distributions have been paid on such Old Capital
Securities, from January 29, 1997. Holders of the Old Capital Securities whose
Old Capital Securities are accepted for exchange will not receive accumulated
Distributions on such Old Capital Securities for any period from and after the
last Distribution Date on such Old Capital Securities prior to the original
issue date of the New Capital Securities or, if no such Distributions have been
paid, will not receive any accumulated Distributions on such Old Capital
Securities, and will be deemed to have waived the right to receive any
Distributions on such Old Capital Securities accumulated from and after such
Distribution Date or, if no such interest has been paid or duly provided for,
from and after January 29, 1997. This Prospectus, together with the Letter of
Transmittal, is being sent to all registered holders of Old Capital Securities
as of , 1997.
Neither the Corporation nor the Issuer will receive any proceeds from the
issuance of the New Capital Securities offered hereby. No dealer-manager is
being used in connection with this Exchange Offer. See "Use of Proceeds" and
"Plan of Distribution".
THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND CAPITAL SECURITIES MAY BE
TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000. ANY TRANSFER, SALE OR OTHER DISPOSITION OF CAPITAL SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT
TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT
LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES.
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975
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<PAGE> 12
(cover page continued)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"),
NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST
THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF
THAT IT EITHER (I) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING
SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OR ANY PLAN, OR (II) IS
ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1
OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING.
vii
<PAGE> 13
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.......................................
Incorporation of Certain Documents by Reference.............
Summary.....................................................
Risk Factors................................................
The Colonial BancGroup, Inc.................................
Colonial Capital II.........................................
Colonial Capital I..........................................
Use of Proceeds.............................................
Capitalization..............................................
Accounting Treatment........................................
The Exchange Offer..........................................
Description of New Securities...............................
Description of Old Securities...............................
Description of Subordinated Debentures......................
Description of Guarantee....................................
The Expense Agreement.......................................
Relationship Among The Capital Securities, The Subordinated
Debentures, The Guarantee and The Expense Agreement.......
Certain Federal Income Tax Consequences.....................
Certain ERISA Considerations................................
Plan of Distribution........................................
Validity of New Securities..................................
Experts.....................................................
</TABLE>
---------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE CORPORATION OR THE ISSUER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
OF ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO
ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL, NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE CORPORATION OR THE ISSUER SINCE THE DATE HEREOF.
---------------------
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of The
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can also
be obtained at prescribed rates by writing to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such material
may also be accessed
viii
<PAGE> 14
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov. In addition, the Corporation's Common Stock is listed for
trading on the New York Stock Exchange, and such reports, proxy statements and
other information concerning the Corporation can be inspected at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Corporation and the Issuer have filed with the Commission a
Registration Statement on Form S-4 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act with respect to
the securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
For further information with respect to the Corporation and the securities
offered hereby, reference is made to the Registration Statement and the exhibits
and the financial statements, notes and schedules filed as part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission, at the addresses set forth above.
Statements made in this Prospectus concerning the contents of any documents
referred to herein are not necessarily complete, and in each instance are
qualified in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement.
No separate financial statements of the Issuer and the Old Issuer have been
included herein. The Corporation, the Issuer and the Old Issuer do not consider
that such financial statements would be material to holders of the Capital
Securities because the Issuer and the Old Issuer are newly formed special
purpose entities, have no operating history or independent operations and are
not engaged in and do not propose to engage in any activity other than holding
as trust assets the Subordinated Debentures of the Corporation and issuing the
Old Trust Securities and the New Trust Securities. The Corporation has, through
the Guarantee, the Trust Agreement, the Subordinated Debentures, the Indenture
and the Expense Agreement, taken together, fully and unconditionally guaranteed
all of the Issuer's and the Old Issuer's obligations under the Capital
Securities. See "The Colonial BancGroup, Inc.", "Colonial Capital II" and
"Description of New Securities". In addition, the Corporation does not expect
that the Issuer will be filing reports under the Exchange Act with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE, WITHOUT CHARGE,
UPON REQUEST FROM THE PERSON SPECIFIED BELOW. IN ORDER TO INSURE TIMELY DELIVERY
OF SUCH DOCUMENTS, ANY SUCH REQUEST SHOULD BE MADE AT LEAST FIVE BUSINESS DAYS
PRIOR TO THE EXPIRATION DATE.
The following documents filed by the Corporation with the Commission (File
No. 1-13508) are hereby incorporated by reference into this Prospectus:
(1) The Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995;
(2) The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996;
(3) The Corporation's Report on Form 8-K dated July 17, 1996;
(4) The Corporation's Report on Form 8-K/A dated October 9, 1996;
(5) The Corporation's Report on Form 8-K dated January 20, 1997; and
(6) The Corporation's Report on Form 8-K dated February 13, 1997.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of any offering of securities made by this Prospectus, shall be
deemed incorporated by reference in this Prospectus and made a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated or deemed incorporated herein by reference will be deemed to be
modified or superseded for the purpose of this Prospectus to the extent that a
statement contained herein or in another subsequently filed document which also
is, or is deemed to be, incorporated herein by reference modifies or supersedes
such statement. Any such statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
ix
<PAGE> 15
The Corporation will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any and all of the documents which have
been incorporated herein by reference but not delivered herewith (other than the
exhibits to such documents unless specifically incorporated herein). Such
request, in writing or by telephone, should be directed to W. Flake Oakley, IV,
Secretary, The Colonial BancGroup, Inc., One Commerce Street, Post Office Box
1108, Montgomery, Alabama 36192 (telephone 334-240-5000). The foregoing address
and telephone number constitute the mailing address and telephone number of the
Corporation, the Issuer and the Old Issuer.
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<PAGE> 16
SUMMARY
The following is a summary of certain information contained herein and
should be read in conjunction with such information contained elsewhere in this
Prospectus and is subject to, and qualified in its entirety by reference to,
such information. Capitalized terms used herein have the respective meanings
ascribed to them elsewhere in this Prospectus.
THE CORPORATION
The Corporation is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended, and incorporated under the laws of Delaware. It
was organized in 1974. The Corporation operates wholly owned commercial banking
subsidiaries in the states of Alabama, Florida, Georgia and Tennessee, each
under the name "Colonial Bank," a second banking subsidiary in Florida, Colonial
Bank of South Florida, a federal savings bank in Florida, Colonial Bank, FSB,
and a second bank subsidiary in Georgia, Dalton-Whitfield Bank & Trust Company
(collectively the "Bank Subsidiaries"). Colonial Bank conducts a full service
commercial banking business in the state of Alabama through 110 branches. In
Tennessee, Colonial Bank conducts a general commercial banking business through
three branches. In Georgia, Colonial Bank operates eleven branches in the
Atlanta area and Dalton-Whitfield Bank & Trust Company operates three branches
in Dalton. In Florida, Colonial Bank operates eleven branches in the Orlando and
Ormond Beach areas. Colonial Bank of South Florida operates nine branches in
Dade, Broward and Palm Beach Counties, and Colonial Bank, FSB, operates six
branches in Eustis and Lake County. Colonial Mortgage Company, a subsidiary of
Colonial Bank in Alabama, is a mortgage banking company which services
approximately $10 billion in residential loans and which originates mortgages in
37 states through 6 regional offices. The Corporation's commercial banking loan
portfolio is comprised primarily of commercial real estate loans (35%) and
residential real estate loans (46%), a significant portion of which is located
within the State of Alabama. The Corporation's growth in loans over the past
several years has been concentrated in commercial and residential real estate
loans. See "The Colonial BancGroup, Inc."
THE ISSUER
The Issuer is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary of
State on February 14, 1997, and governed by the New Trust Agreement between the
Corporation, as Depositor, and Wilmington Trust Company, as Property Trustee and
as Delaware Trustee and the Administrative Trustees named therein. The Issuer's
business and affairs are conducted by its trustees: initially, Wilmington Trust
Company, as Property Trustee, and Wilmington Trust Company, as Delaware Trustee,
and the Administrative Trustees. The Issuer exists for the exclusive purposes of
(i) complying with the Registration Rights Agreement by offering and issuing the
New Capital Securities pursuant to the Exchange Offer, (ii) acquiring the New
Subordinated Debentures and (iii) engaging in only those other activities
necessary, convenient or incidental thereto (such as registering the transfer of
the New Trust Securities). Accordingly, the New Subordinated Debentures will be
the sole assets of the Issuer, and payments under the New Subordinated
Debentures will be the sole source of revenue of the Issuer. See "Colonial
Capital II."
THE OLD ISSUER
The Old Issuer is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary of
State on January 24, 1997 and governed by the Old Trust Agreement between the
Corporation, as Depositor, and Wilmington Trust Company, as Property Trustee and
as Delaware Trustee, and the Administrative Trustees named therein. The Old
Issuer's business and affairs are conducted by its trustees: Wilmington Trust
Company, as Property Trustee, and Wilmington Trust Company, as Delaware Trustee,
and the Administrative Trustee. The Old Issuer exists for the exclusive purposes
of (i) issuing and selling the Old Trust Securities, (ii) using the proceeds
from the sale of the Old Trust Securities to acquire the Old Subordinated
Debentures and (iii) engaging in only those other activities necessary,
convenient or incidental thereto (such as registering the transfer of the Old
Trust Securities). Accordingly, the Old Subordinated
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<PAGE> 17
Debentures are the sole assets of the Old Issuer, and payments under the Old
Subordinated Debentures will the sole source of revenue of the Old Issuer. See
"Colonial Capital I."
THE EXCHANGE OFFER
SECURITIES EXCHANGED
Up to $70,000,000 aggregate Liquidation Amount of New Capital Securities
are being offered in exchange for a like aggregate Liquidation Amount of Old
Capital Securities. Old Capital Securities may be tendered for exchange in whole
or in part in a liquidation amount of $100,000 (100 Capital Securities) or any
integral multiple of $1,000 in excess thereof. The Corporation and the Issuer
are making the Exchange Offer in order to satisfy the Corporation's and the Old
Issuer's obligations under the Registration Rights Agreement relating to the Old
Capital Securities. For a description of the procedures for tendering Old
Capital Securities, see "The Exchange Offer -- Procedures for Tendering Old
Capital Securities".
EXPIRATION DATE
The Expiration Date of the Exchange Offer will be 5:00 p.m., New York City
time, on , 1997 unless the Exchange Offer is extended by the
Corporation and the Issuer. See "The Exchange Offer -- Expiration Date;
Extensions; Amendments".
CONDITIONS TO EXCHANGE OFFER
The Exchange Offer is subject to certain conditions, which may be waived by
the Corporation and the Issuer in their sole discretion. The Exchange Offer is
not conditioned upon any minimum Liquidation Amount of Old Capital Securities
being tendered. See "The Exchange Offer -- Conditions to Exchange Offer". The
Corporation and the Issuer reserve the right in their sole discretion, subject
to applicable law, at any time and from time to time, (i) to delay the
acceptance of the Old Capital Securities for exchange, (ii) to terminate the
Exchange Offer if certain specified conditions have not been satisfied, (iii) to
extend the Expiation Date of the Exchange Offer and retain all Old Capital
Securities, or (iv) to waive any condition or otherwise amend the terms of the
Exchange Offer in any respect. See "The Exchange Offer -- Expiration Date;
Extensions; Amendments".
WITHDRAWAL RIGHTS
Tenders of Old Capital Securities may be withdrawn at any time on or, prior
to the Expiration Date by delivering a written notice of such withdrawal to
Wilmington Trust Company, as Exchange Agent (the "Exchange Agent"), in
conformity with certain procedures set forth below under "The Exchange Offer --
Withdrawal Rights".
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Tendering holders of Old Capital Securities must complete and sign a Letter
of Transmittal in accordance with the instructions contained therein and forward
the same by mail, facsimile, or hand delivery, together with any other required
documents, to the Exchange Agent, either with the Old Capital Securities to be
tendered or in compliance with the specified procedures for guaranteed delivery
of Old Capital Securities. Certain brokers, dealers, commercial banks, trust
companies and other nominees may also effect tenders by book-entry transfer,
including an Agent's Message in lieu of the Letter of Transmittal. Holders of
Old Capital Securities registered in the name of the broker, dealer, commercial
bank, trust company or other nominee are urged to contact such person promptly
if they wish to tender Old Capital Securities pursuant to the Exchange Offer.
See "The Exchange Offer -- Procedures for Tendering Old Capital Securities".
Letters of Transmittal and certificates representing Old Capital Securities
should not be sent to the Corporation or the Issuer. Such documents should only
be sent to the Exchange Agent. Questions regarding how to tender and requests
for information should be directed to the Exchange Agent. See "The Exchange
Offer -- Exchange Agent".
2
<PAGE> 18
RESALES OF NEW CAPITAL SECURITIES
The Corporation and the Issuer are making the Exchange Offer in reliance on
the position of the staff of the Division of Corporation Finance of the
Commission as set forth in certain interpretive letters addressed to third
parties in other transactions. However, neither the Corporation nor the Issuer
has sought its own interpretive letter and there can be no assurance that the
staff of the Division of Corporation Finance of the Commission would make a
similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance, and subject to the two immediately
following sentences, the Corporation and the Issuer believe that the New Capital
Securities issued pursuant to this Exchange Offer in exchange for Old Capital
Securities may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such New Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of the Old Capital Securities
who is an Affiliate or who intends to participate in the Exchange Offer for the
purpose of distributing the New Capital Securities, or any broker-dealer who
purchased the Old Capital Securities from the Issuer to resell pursuant to Rule
144A or any other available exemption under the Securities Act, (i) will not be
able to rely on the interpretations of the staff of the Division of Corporation
Finance of the Commission set forth in the above-mentioned interpretive letters,
and (ii) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any sale or other transfer of such Old
Capital Securities unless such sale is made pursuant to exemptions from such
requirements. In addition, as described below, any Participating Broker-Dealer
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such New Capital Securities.
Each holder of Old Capital Securities that wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an Affiliate, (ii) any New Capital Securities to be
received by it are being acquired in the ordinary course of its business, (iii)
it has no arrangement or understanding with any person to participate in a
distribution (within the meaning of the Securities Act) of such New Capital
Securities, and (iv) if such holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a distribution, (within the
meaning of the Securities Act) of such New Capital Securities, otherwise the
limitations on transfer described above may apply. Each Participating
Broker-Dealer must acknowledge that it acquired the Old Capital Securities for
its own account as the result of market-making activities or other trading
activities and must agree that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of New Capital
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of Corporation Finance
of the Commission in the interpretive letters referred to above, the Corporation
and the Issuer believe that Participating Broker-Dealers may fulfill their
prospectus delivery requirements with respect to the New Capital Securities
received upon the exchange of such Old Capital Securities (other than Old
Capital Securities which represent an unsold allotment from the original sale of
the Old Capital Securities) with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange offer so
long as it contains a description of the plan of distribution with respect to
the resale of such New Capital Securities. Accordingly, this Prospectus, as it
may be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of New Capital Securities received in
exchange for Old Capital Securities where such Old Capital Securities were
acquired by such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement and to the limitations described
below under "The Exchange Offer -- Resale of New Capital Securities", the
Corporation and the Issuer have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90 days after the Expiration Date or, if earlier, when all such
New Capital Securities have been disposed of by such Participating
Broker-Dealer. See "Plan of Distribution". Any person, including any
Participating Broker-Dealer, who is an Affiliate may not rely on such
interpretive letters and must comply with the registration and
3
<PAGE> 19
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. See "The Exchange Offer -- Resales of New Capital
Securities".
EXCHANGE AGENT
The Exchange Agent is Wilmington Trust Company. The address, telephone and
facsimile numbers of the Exchange Agent are set forth in "The Exchange
Offer -- Exchange Agent" and in the Letter of Transmittal.
USE OF PROCEEDS
Neither the Corporation nor the Issuer will receive any proceeds from the
issuance of the New Capital Securities offered hereby. See "Use of Proceeds".
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS; CERTAIN ERISA CONSIDERATIONS
Holders of Old Capital Securities should review the information set forth
under "Certain Federal Income Tax Considerations" and "Certain ERISA
Considerations" prior to tendering Old Capital Securities in the Exchange Offer.
RATING
The New Capital Securities are expected to be rated BBB- by Fitch Investors
Service, L.P. and BB by Standard & Poor's Ratings Services. A security rating is
not a recommendation to buy, sell or hold securities and may be subject to
revision or withdrawal at any time by the assigning rating organization.
DESCRIPTION OF THE NEW SECURITIES
General. The New Capital Securities represent preferred undivided
beneficial interests in the assets of the Issuer and will have a preference
under certain circumstances with respect to Distributions and amounts payable on
liquidation, redemption or otherwise over the New Common Securities. See
"Description of New Securities -- Subordination of Common Securities". The sole
assets of the Issuer will be the New Subordinated Debentures, and payment under
the New Subordinated Debentures will be the sole revenue of the Issuer. The New
Subordinated Debentures are unsecured subordinated debt securities issued under
the Indenture between the Corporation and Wilmington Trust Company, as trustee.
Securities Offered. The Issuer is offering up to $70,000,000 aggregate
Liquidation Amount of the Issuer's 8.92% Capital Securities which have been
registered under the Securities Act (Liquidation Amount $1,000 per Capital
Securities). The New Capital Securities will be issued under the New Trust
Agreement. The New Trust Agreement and the Old Trust Agreement are identical in
all material respects except for matters relating to the Registration Rights
Agreement and restrictions on transfer of the Old Capital Securities. If the
Exchange Offer is consummated, any Old Capital Securities which remain
outstanding after the consummation of the Exchange Offer will continue to have
the same rights (and restrictions) as they currently have, except for those
rights which terminate upon consummation of the Exchange Offer. See "Description
of New Securities". The terms of the New Capital Securities are identical in all
material respects to the terms of Old Capital Securities, except that the New
Capital Securities have been registered under the Securities Act and therefore
are not subject to certain restrictions on transfer applicable to the Old
Capital Securities and will not provide for any increase in the Distribution
rate thereon. See "The Exchange Offer -- Purpose and Effect of Exchange Offer",
"Description of New Securities" and "Description of Old Securities".
Distributions. Holders of the New Capital Securities will be entitled to
receive as a preference cumulative cash Distributions accruing from January 29,
1997 and payable semi-annually in arrears on July 15 and January 15 of each
year, commencing July 15, 1997, at the per annum rate set forth on the cover
page of the Prospectus to the persons in whose names the New Capital Securities
are registered at the close of business on the relevant record dates. See
"Description of New Securities -- Distributions".
The New Subordinated Debentures are unsecured and rank subordinate and
junior in right of payment to all Senior Indebtedness of the Corporation. The
ability of the Issuer to pay amounts due on the New Capital
4
<PAGE> 20
Securities is solely dependant upon the Corporation making payments on the
Subordinated Debentures as and when required. See "Risk Factors -- Ranking of
Subordinated Obligations Under the Guarantee and the Subordinated Debentures".
Option to Extend Interest Payment Period. So long as no Debenture Event of
Default (as defined herein) has occurred and is continuing, the Corporation has
the right to defer payment of interest on the New Subordinated Debentures at any
time or from time to time by extending the interest payment period thereon for
Extension Periods of up to 10 consecutive semi-annual periods with respect to
each deferral period; provided, however, that no Extension Period may extend
beyond the Stated Maturity of the Subordinated Debentures. If interest payments
on the New Subordinated Debentures are deferred, Distributions on the New
Capital Securities also will be deferred and the Corporation will not be
permitted, subject to certain exceptions set forth herein, to declare or pay any
cash distributions with respect to the Corporation's capital stock or debt
securities of the Corporation that rank pari passu with or junior to the New
Subordinated Debentures. During an Extension Period, Distributions on the New
Capital Securities will continue to accumulate and Distributions that are in
arrears will bear interest on the amount thereof at the per annum rate set forth
on the cover page of this Prospectus (to the extent permitted by applicable
law), compounded semi-annually, and holders of the New Capital Securities will
be required to accrue interest income for United States federal income tax
purposes in advance of receipt of cash related to such income. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Corporation may elect to begin a new Extension Period, subject to the
requirements set forth herein.
The Corporation has no current plan to exercise its right to defer payments
of interest by extending the interest payment period on the New Subordinated
Debentures. However, should the Corporation elect to exercise such right in the
future, the market price of the New Capital Securities is likely to be affected.
See "Risk Factors -- Option to Extend Interest Payment Period; Tax
Consequences", "Description of Subordinated Debentures -- Option to Extend
Interest Payment Period" and "Certain Federal Income Tax Consequences --
Interest Income and Original Issue Discount".
Redemption; Special Event. The New Capital Securities are subject to
mandatory redemption, in whole or in part, upon repayment of the New
Subordinated Debentures at maturity or upon their earlier redemption. The New
Subordinated Debentures are redeemable, at the option of the Corporation, (i) on
or after January 29, 2007, in whole at any time or in part from time to time, or
(ii) in whole (but not in part), at any time within 90 days following the
occurrence and continuation of a Tax Event, Investment Company Event or Capital
Treatment Event (each as defined herein). See "Risk Factors -- Tax Event,
Investment Company Event or Capital Treatment Event Redemption" and "Description
of New Securities -- Redemption".
See "Risk Factors -- Possible Tax Law Changes Affecting Capital Securities"
for a discussion of certain legislative proposals that, if adopted, could give
rise to a Tax Event, which may permit the Corporation to cause a redemption of
the Capital Securities prior to January 29, 2007.
No sinking fund will be established for the benefit of the Capital
Securities.
EXCHANGE OF CAPITAL SECURITIES FOR SUBORDINATED DEBENTURES
The holder of the New Common Securities (i.e., the Corporation) has the
right to terminate the Issuer at any time and, after satisfaction of liabilities
to creditors of the Issuer in accordance with applicable law and the New Expense
Agreement, cause the New Subordinated Debentures to be distributed to the
holders of the New Capital Securities in liquidation of the Issuer, subject to
the Issuer having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of New Capital Securities.
The Corporation has committed to the Federal Reserve that, so long as the
Corporation is a holder of the New Common Securities, it will not exercise such
right without having received the prior approval of the Federal Reserve to do
so, if then required under applicable Federal Reserve capital guidelines or
policies. See "Description of New Securities -- Liquidation Distribution Upon
Dissolution".
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GUARANTEE
The payment of Distributions and payment on the liquidation of the Issuer
or the redemption of the New Capital Securities are guaranteed by the
Corporation to the extent that the Issuer has sufficient funds available
therefor. Such guarantee is subordinate and junior in right of payment to all
Senior Debt of the Corporation. See "Risk Factors -- Rights Under the Guarantee"
and "Description of Guarantee".
TRANSFER
The New Capital Securities will be issued, and may be transferred, only in
blocks having a Liquidation Amount of not less than $100,000 (100 Capital
Securities). Any transfer, sale or other disposition of New Capital Securities
resulting in a block having a Liquidation Amount of less than $100,000 shall be
deemed to be void and of no legal effect whatsoever.
ABSENCE OF MARKET FOR NEW CAPITAL SECURITIES
The New Capital Securities will be a new issue of securities for which
there currently is no market. Although Bear, Stearns & Co., Inc. and Keefe,
Bruyette & Woods, Inc., the initial purchasers of the Old Capital Securities
(the "Initial Purchasers"), have informed the Corporation and the Issuer that
they each currently intend to make a market in the New Capital Securities, they
are not obligated to do so, and any such market making may be discontinued at
any time without notice. Accordingly, there can be no assurance as to the
development of liquidity of any market for the New Capital Securities. The
Corporation and the Issuer do not intend to apply for listing the New Capital
Securities on any securities exchange or for quotation through the National
Association of Securities Dealers Automated Quotation System. See "Risk
Factors -- Absence of Public Market".
RISK FACTORS
Holders of Old Capital Securities should carefully consider the matters set
forth under "Risk Factors."
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<PAGE> 22
RISK FACTORS
Holders of the Old Capital Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters prior to tendering Old Capital Securities in the
Exchange Offer.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED
DEBENTURES
The obligations of the Corporation under the New Guarantee issued by the
Corporation for the benefit of the holders of the New Capital Securities and
under the New Subordinated Debentures are subordinate and junior in right of
payment to all Senior Indebtedness of the Corporation. Substantially all of the
Corporation's existing indebtedness constitutes Senior Indebtedness. Because the
Corporation is a holding company, the right of the Corporation to participate in
any distribution of assets of any subsidiary, including its Bank Subsidiaries,
upon such subsidiary's dissolution, winding-up, liquidation or reorganization or
otherwise (and thus the ability of holders of the New Capital Securities to
benefit indirectly from such distribution), is subject to the prior claims of
creditors of that subsidiary, except to the extent that the Corporation may
itself be a creditor of that subsidiary and its claims are recognized. There are
various legal limitations on the extent to which certain of the Corporation's
subsidiaries may extend credit, pay dividends or otherwise supply funds to, or
engage in transactions with, the Corporation or certain of its other
subsidiaries. Accordingly, the New Subordinated Debentures and New Guarantee
will be effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and holders of New Subordinated Debentures and the
New Guarantee should look only to the assets of the Corporation for payments on
the New Subordinated Debentures and the New Guarantee. See "The Colonial
BancGroup, Inc." None of the Indenture, the New Guarantee, the New Trust
Agreement or the New Expense Agreement places any limitation on the amount of
secured or unsecured debt, including Senior Indebtedness, that may be incurred
by the Corporation. See "Description of Guarantee -- Status of the Guarantee"
and "Description of Subordinated Debentures -- Subordination."
The ability of the Issuer to pay amounts due on the New Capital Securities
is solely dependent upon the Corporation's making payments on the New
Subordinated Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
So long as no Event of Default (as defined in the Indenture) has occurred
and is continuing with respect to the New Subordinated Debentures (a "Debenture
Event of Default"), the Corporation has the right under the Indenture to defer
the payment of interest on the New Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the New Subordinated Debentures. See "Description
of New Subordinated Debentures -- Debenture Events of Default." As a consequence
of any such deferral, semi-annual Distributions on the New Capital Securities by
the Issuer will be deferred (and the amount of Distributions to which holders of
the New Capital Securities are entitled will accumulate additional Distributions
thereon at the rate of 8.92% per annum, compounded semi-annually from the
relevant payment date for such Distributions) during any such Extension Period.
During any such Extension Period, the Corporation may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation that rank
pari passu in all respects with or junior in interest to the New Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Corporation in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or stockholder stock purchase plan or in connection
with the issuance of capital stock of the Corporation (or securities convertible
into or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Corporation's
capital stock (or any capital stock of a subsidiary of the Corporation) for any
class or series of the Corporation's capital stock or of any class or series of
the Corporation's indebtedness for any class or series of the Corporation's
capital stock, (c) the purchase of fractional interests in shares of the
Corporation's capital stock
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<PAGE> 23
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder rights plan, or the issuance of rights, stock or
other property under any stockholder rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior to
such stock). Prior to the termination of any such Extension Period, the
Corporation may further defer the payment of interest, provided that no
Extension Period may exceed 10 consecutive semi-annual periods or extend beyond
the Stated Maturity of the New Subordinated Debentures. Upon the termination of
any Extension Period and the payment of all interest then accrued and unpaid
(together with interest thereon at the annual rate of 8.92%, compounded
semi-annually, to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period subject to the above conditions. There is
no limitation on the number of times that the Corporation may elect to begin an
Extension Period. See "Description of New Securities -- Distributions" and
"Description of Subordinated Debentures -- Option to Extend Interest Payment
Period."
Should an Extension Period occur, a holder of New Capital Securities will
continue to accrue income (in the form of original issue discount) in respect of
its pro rata share of the New Subordinated Debentures held by the Issuer for
United States federal income tax purposes. As a result, a holder of New Capital
Securities will include such income in gross income for United States federal
income tax purposes in advance of the receipt of cash, and will not receive the
cash related to such income from the Issuer if the holder disposes of the New
Capital Securities prior to the record date for the payment of Distributions.
See "Certain Federal Income Tax Consequences -- Interest Income and Original
Issue Discount" and "-- Sales or Redemption of Capital Securities."
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the New
Subordinated Debentures. However, should the Corporation elect to exercise such
right in the future, the market price of the New Capital Securities is likely to
be affected. A holder that disposes of its New Capital Securities during an
Extension Period, therefore, might not receive the same return on its investment
as a holder that continues to hold its New Capital Securities. In addition, as a
result of the existence of the Corporation's right to defer interest payments,
the market price of the New Capital Securities (which represent preferred
undivided beneficial interests in the assets of the Issuer) may be more volatile
than the market prices of other securities on which original issue discount
accrues that are not subject to such deferrals.
TAX EVENT, INVESTMENT COMPANY EVENT OR CAPITAL TREATMENT EVENT REDEMPTION
Upon the occurrence and during the continuation of a Tax Event, Investment
Company Event or Capital Treatment Event, the Corporation has the right to
redeem the New Subordinated Debentures in whole (but not in part) at any time
within 90 days following the occurrence of such Tax Event, Investment Company
Event or Capital Treatment Event and thereby cause a mandatory redemption of the
New Capital Securities. Any such redemption shall be at a price equal to the
Make-Whole Amount (as defined in "Description of New Securities -- Redemption"),
together with accumulated Distributions to but excluding the date fixed for
redemption. The Corporation has committed to the Federal Reserve that the
Corporation will not exercise such right without having received prior approval
of the Federal Reserve to do so, if then required under applicable Federal
Reserve capital guidelines or policies.
A "Tax Event" means the receipt by the Issuer of an opinion of counsel to
the Corporation experienced in such matters to the effect that, as a result of
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the New Capital Securities, there is more than an insubstantial risk that (i)
the Issuer is, or will be within 90 days of the delivery of such opinion,
subject to United States federal income tax with respect to income received or
accrued on the New Subordinated Debentures, (ii) interest payable by the
Corporation on the New Subordinated Debentures is not, or within 90 days of the
delivery of such opinion will not be, deductible by the Corporation, in whole or
in part, for United States federal income
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<PAGE> 24
tax purposes or (iii) the Issuer is, or will be within 90 days of the delivery
of the opinion, subject to more than a de minimis amount of other taxes, duties
or other governmental charges.
See "-- Possible Tax Law Changes Affecting the Capital Securities" for a
discussion of certain legislative proposals that, if adopted, could give rise to
a Tax Event, which may permit the Corporation to cause a redemption of the
Capital Securities prior to January 29, 2007.
"Investment Company Event" means the receipt by the Issuer of an opinion of
counsel to the Corporation experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or a written change
(including any announced prospective 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 Issuer
is or will be considered an "investment company" that is required to be
registered under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), which change or prospective change becomes effective or would
become effective, as the case may be, on or after the date of the issuance of
the New Capital Securities.
A "Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the New
Capital Securities, there is more than an insubstantial risk that the
Corporation will not be entitled to treat an amount equal to the Liquidation
Amount of the New Capital Securities as "Tier 1 Capital" (or the then equivalent
thereof) for purposes of the capital adequacy guidelines of the Federal Reserve,
as then in effect and applicable to the Corporation.
EXCHANGE OF CAPITAL SECURITIES FOR SUBORDINATED DEBENTURES
The holders of all of the outstanding New Common Securities have the right
at any time to terminate the Issuer and, after satisfaction of liabilities to
creditors of the Issuer as provided by applicable law, cause the New
Subordinated Debentures to be distributed to the holders of the New Capital
Securities and New Common Securities in liquidation of the Issuer. The
Corporation has committed to the Federal Reserve that, so long as the
Corporation (or any affiliate) is a holder of New Common Securities, the
Corporation will not exercise such right without having received the prior
approval of the Federal Reserve to do so, if then required under applicable
Federal Reserve capital guidelines or policies. See "Description of New
Securities -- Liquidation Distribution Upon Dissolution."
Under current United States federal income tax law and interpretations and
assuming, as expected, that the Issuer will not be taxable as a corporation, a
distribution of the New Subordinated Debentures upon a liquidation of the Issuer
should not be a taxable event to holders of the New Capital Securities. However,
if a Tax Event were to occur that would cause the Issuer to be subject to United
States federal income tax with respect to income received or accrued on the New
Subordinated Debentures, a distribution of the New Subordinated Debentures by
the Issuer could be a taxable event to the Issuer and the holders of the New
Capital Securities. See "Certain Federal Income Tax Consequences -- Distribution
of Subordinated Debentures to Securityholders."
MARKET PRICES
There can be no assurance as to the market prices for New Capital
Securities, or for New Subordinated Debentures that may be distributed in
exchange for New Capital Securities if a liquidation of the Issuer occurs.
Accordingly, the New Capital Securities or the New Subordinated Debentures that
a holder of New Capital Securities may receive on liquidation of the Issuer may
trade at a discount to the price that the investor paid to purchase the New
Capital Securities offered hereby. Because holders of New Capital Securities may
receive New Subordinated Debentures on termination of the Issuer, prospective
purchasers of New Capital Securities are also making an investment decision with
regard to the New Subordinated Debentures and should carefully review all the
information regarding the New Subordinated Debentures contained herein. See
"Description of Subordinated Debentures."
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RIGHTS UNDER THE GUARANTEE
Wilmington Trust Company serves as trustee under the Old Guarantee and the
New Guarantee (the "Guarantee Trustee") and will hold the New Guarantee for the
benefit of the holders of the New Capital Securities. Wilmington Trust Company
will also act as Debenture Trustee for the New Subordinated Debentures and as
Property Trustee and as Delaware Trustee under the New Trust Agreement. The
Guarantee guarantees to the holders of the New Capital Securities the following
payments, to the extent not paid by the Issuer: (i) any accumulated and unpaid
Distributions required to be paid on the New Capital Securities, to the extent
that the Issuer has funds on hand available therefor at such time, (ii) the
Redemption Price with respect to any New Capital Securities called for
redemption, to the extent that the Issuer has funds on hand available therefor
at such time, and (iii) upon a voluntary or involuntary termination, winding-up
or liquidation of the Issuer (unless the New Subordinated Debentures are
distributed to holders of the New Capital Securities), the lesser of (a) the
aggregate of the Liquidation Amount and all accumulated and unpaid Distributions
to the date of payment, to the extent that the Issuer has funds on hand
available therefor at such time, and (b) the amount of assets of the Issuer
remaining available for distribution to holders of the New Capital Securities on
liquidation of the Issuer. The New Guarantee is subordinate as described under
"-- Ranking of Subordinated Obligations Under the Guarantee and the Subordinated
Debentures." The holders of not less than a majority in aggregate Liquidation
Amount of the outstanding New Capital Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of the New Guarantee or to direct the exercise
of any trust power conferred upon the Guarantee Trustee under the New Guarantee.
Any holder of the New Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the New Guarantee
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other person or entity. If the Corporation were to default on its
obligation to pay amounts payable under the New Subordinated Debentures, the
Issuer may lack funds for the payment of Distributions or amounts payable on
redemption of the New Capital Securities or otherwise, and, in such event,
holders of the New Capital Securities would not be able to rely upon the New
Guarantee for payment of such amounts. Instead, if a Debenture Event of Default
has occurred and is continuing and such event is attributable to the failure of
the Corporation to pay any amounts payable in respect of the New Subordinated
Debentures on the payment date on which such payment is due and payable, then a
holder of New Capital Securities may institute a legal proceeding directly
against the Corporation for enforcement of payment to such holder of any amounts
payable in respect of such New Subordinated Debentures having a principal amount
equal to the aggregate Liquidation Amount of the New Capital Securities of such
holder (a "Direct Action"). In connection with such Direct Action, the
Corporation will have a right of set-off under the Indenture to the extent of
any payment made by the Corporation to such holder of New Capital Securities in
the Direct Action. Except as described herein, holders of New Capital Securities
will not be able to exercise directly any other remedy available to the holders
of the New Subordinated Debentures or assert directly any other rights in
respect of the New Subordinated Debentures. See "Description of Subordinated
Debentures -- Enforcement of Certain Rights by Holders of Capital Securities,"
"-- Debenture Events of Default" and "Description of Guarantee." The New Trust
Agreement provides that each holder of New Capital Securities by acceptance
thereof agrees to the provisions of the New Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of New Capital Securities will have limited voting rights relating
generally to the modification of the New Capital Securities and the New
Guarantee and the exercise of the Issuer's rights as holder of New Subordinated
Debentures. Holders of New Capital Securities will not be entitled to appoint,
remove or replace the Property Trustee or the Delaware Trustee except upon the
occurrence of certain events described herein. The Issuer Trustees and the
holders of all of the New Common Securities may, subject to certain conditions,
amend the New Trust Agreement without the consent of holders of New Capital
Securities to cure any ambiguity or make other provisions not inconsistent with
other provisions under the New Trust Agreement or to ensure that the Issuer (i)
will not be taxable as a corporation or as other than a grantor trust for United
States federal income tax purposes, or (ii) will not be required to register as
an "investment company" under the Investment Company Act. See "Description of
New Securities -- Voting Rights; Amendment of Trust Agreement" and "-- Removal
of Issuer Trustees; Appointment of Successors."
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POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Revenue
Reconciliation Bill"), the revenue portion of President Clinton's budget
proposal, was released. If enacted, the Revenue Reconciliation Bill would have
generally denied interest deductions for interest on an instrument issued by a
corporation that has a maximum term of more than 20 years and that is not shown
as indebtedness on the separate balance sheet of the issuer or, where the
instrument is issued to a related party (other than a corporation), where the
holder or some other related party issues a related instrument that is not shown
as indebtedness on the issuer's consolidated balance sheet. If a similar
provision were to apply to the New Subordinated Debentures, the Corporation
would be unable to deduct interest on the New Subordinated Debentures. On March
29, 1996, the Chairmen of the Senate Finance and House Ways and Means Committees
issued a joint statement to the effect that it was their intention that the
effective date of the President's legislative proposals, if adopted, would be no
earlier than the date of appropriate Congressional action. Under current law,
the Corporation will be able to deduct interest on the New Subordinated
Debentures. There can be no assurance, however, that current or future
legislative proposals or final legislation will not affect the ability of the
Corporation to deduct interest on the New Subordinated Debentures. Such a change
could give rise to a Tax Event, which may permit the Corporation to cause a
redemption of the New Capital Securities before January 29, 2007. See
"Description of Subordinated Debentures -- Redemption" and "Description of New
Securities -- Redemption." See also "Certain Federal Income Tax Consequences --
Possible Tax Law Changes."
CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the Securities
Act or any state securities laws and therefore may not be offered, sold or
otherwise transferred except in compliance with the registration requirements of
the Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions. Old Capital
Securities which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to certain
limited exceptions). The Corporation, the Issuer and the Old Issuer do not
intend to register under the Securities Act any Old Capital Securities which
remain outstanding after consummation of the Exchange Offer (subject to such
limited exceptions, if applicable).
To the extent that Old Capital Securities are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered Old Capital Securities
could be adversely affected. In addition, although the Old Capital Securities
have been designated for trading in the Private Offerings, Resale and Trading
Through Automatic Linkages ("PORTAL") market, to the extent that Old Capital
Securities are tendered and accepted in connection with the Exchange Offer, any
trading market for Old Capital Securities which remain outstanding after the
Exchange Offer could be adversely affected.
The Old Capital Securities provide that, if the Exchange Offer is not
consummated within 35 days after the effective date of the Registration
Statement, the Distribution rate borne by the Old Capital Securities will
increased by 0.25% per annum commencing on the 36th day after such effective
date, until the Exchange Offer is consummated. See "Description of Old
Securities". Following consummation of the Exchange Offer, the Old Capital
Securities will not be entitled to any increase in the Distribution rate
thereon. The New Capital Securities will not be entitled to any such increase in
the Distribution rate thereon. Any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will continue to have the
same rights as before the Exchange Offer, except as stated above. See
"Description of New Securities".
ABSENCE OF PUBLIC MARKET
The Old Capital Securities have not been registered under the Securities
Act and will be subject to restrictions on transferability to the extent that
they are not exchanged for the New Capital Securities. Although the New Capital
Securities will generally be permitted to be resold or otherwise transferred by
the holders (who
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are not Affiliates) without compliance with the registration requirements under
the Securities Act, they will constitute a new issue of securities with no
established trading market. New Capital Securities may be transferred by the
holders thereof only in blocks having a Liquidation Amount of not less than
$100,000 (100 Capital Securities). The Corporation and the Issuer have been
advised by the Initial Purchasers that the Initial Purchasers presently intend
to make a market in the New Capital Securities. However, the Initial Purchasers
are not obligated to do so and any market-making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offer. Accordingly, no assurance can be given that an active
public or other market will develop for the New Capital Securities or the Old
Capital Securities or as to the liquidity of or the trading market for the New
Capital Securities or the Old Capital Securities. If an active market does not
develop, the market price and liquidity of the New Capital Securities may be
adversely affected.
If a public trading market develops for the New Capital Securities, future
trading prices of such securities will depend on many factors, including, among
other things, prevailing interest rates, results of operations and the market
for similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of the
Corporation, the New Capital Securities may trade at a discount.
Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are Affiliates may publicly offer for sale or resell
the New Capital Securities only in compliance with the provisions of Rule 144
under the Securities Act.
Each Participating Broker-Dealer that receives New Capital Securities for
its own account must acknowledge that it will deliver a prospectus in connection
with any resale of such New Capital Securities. See "Plan of Distribution".
EXCHANGE OFFER PROCEDURES
Issuance of the New Capital Securities in exchange for the Old Capital
Securities pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of such Old Capital Securities, a properly completed and
duly executed Letter of Transmittal or Agent's Message in lieu thereof and all
other required documents. Therefore, holders of the Old Capital Securities
desiring to tender such Old Capital Securities in exchange for New Capital
Securities should allow sufficient time to ensure timely delivery. Neither the
Corporation, the Issuer, the Old Issuer nor the Exchange Agent is under any duty
to give notification of defects or irregularities with respect to the tenders of
Old Capital Securities for exchange. See "The Exchange Offer".
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THE COLONIAL BANCGROUP, INC.
GENERAL
The Corporation is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended, and incorporated under the laws of Delaware. It
was organized in 1974. The Corporation operates wholly owned commercial banking
subsidiaries in the states of Alabama, Florida, Georgia and Tennessee, each
under the name "Colonial Bank," a second banking subsidiary in Florida, Colonial
Bank of South Florida, a federal savings bank in Florida, Colonial Bank, FSB,
and a second bank subsidiary in Georgia, Dalton-Whitfield Bank & Trust. Colonial
Bank conducts a full service commercial banking business in the state of Alabama
through 110 branches. In Tennessee, Colonial Bank conducts a general commercial
banking business through three branches. In Georgia, Colonial Bank operates
eleven branches in the Atlanta area and Dalton-Whitfield Bank & Trust operates
three branches in the Dalton area. In Florida, Colonial Bank operates eleven
branches in the Orlando and Ormond Beach areas. Colonial Bank of South Florida
operates nine branches in Dade, Broward and Palm Beach Counties, and Colonial
Bank, FSB, operates six branches in Eustis and Lake County. Colonial Mortgage
Company, a subsidiary of Colonial Bank in Alabama, is a mortgage banking company
which services approximately $10 billion in residential loans and which
originates mortgages in 37 states through 6 regional offices. The Corporation's
commercial banking loan portfolio is comprised primarily of commercial real
estate loans (35%) and residential real estate loans (46%), a significant
portion of which is located within the State of Alabama. The Corporation's
growth in loans over the past several years has been concentrated in commercial
and residential real estate loans.
The Corporation is a legal entity separate and distinct from its
subsidiaries, including the Bank Subsidiaries. There are various legal
limitations governing the extent to which certain of the Corporation's
subsidiaries may extend credit, pay dividends or otherwise supply funds to, or
engage in transactions with, the Corporation or certain of its other
subsidiaries. The rights of the Corporation to participate in any distribution
of assets of any subsidiary upon its dissolution, winding-up, liquidation or
reorganization or otherwise are subject to the prior claims of creditors of that
subsidiary, except to the extent that the Corporation may itself be a creditor
of that subsidiary and its claims are recognized. Claims on the Corporation's
subsidiaries by creditors other than the Corporation include long-term debt and
substantial obligations with respect to deposit liabilities, trading
liabilities, federal funds purchased, securities sold under repurchase
agreements, as well as short-term borrowings and accounts payable.
Certain information regarding the ownership of voting securities, the
biographies of the directors of the Corporation, executive compensation and
related party transactions is included in the Corporation's Annual Report on
Form 10-K for the fiscal year ending December 31, 1995, at items 10, 11, 12 and
13 and is incorporated herein by reference.
RECENT BUSINESS COMBINATIONS
On January 3, 1997, Jefferson Bancorp, Inc. ("Jefferson") was merged into
the Corporation. Jefferson was a Florida corporation and a holding company for
Jefferson Bank of Florida located in Miami Beach, Florida. The name of this bank
has been changed to Colonial Bank of South Florida and the bank will merge with
the Corporation's Florida subsidiary, Colonial Bank. 3,854,952 shares of the
Corporation's Common Stock were issued to the stockholders of Jefferson. At
December 31, 1996, Jefferson had assets of $472.7 million, deposits of $405.8
million and stockholders' equity of $32.3 million.
On January 3, 1997, Tomoka Bancorp, Inc. ("Tomoka") was merged into the
Corporation. Tomoka was a Florida corporation and a holding company for Tomoka
State Bank located in Ormond Beach, Florida. Tomoka State Bank was merged with
the Corporation's Florida bank subsidiary, Colonial Bank. 661,992 shares of the
Corporation's Common Stock were issued to the stockholders of Tomoka. At
December 31, 1996, Tomoka had assets of $76.7 million, deposits of $68.2 million
and stockholders' equity of $6.5 million.
On January 9, 1997, First Family Financial Corporation ("First Family") was
merged into the Corporation. First Family was a Florida corporation and a
holding company for First Family Bank, fsb located in Eustis, Florida. The name
of First Family Bank, fsb has been changed to Colonial Bank, FSB, and this bank
will merge
13
<PAGE> 29
with the Corporation's Florida subsidiary bank, Colonial Bank. 330,400 shares of
the Corporation's Common Stock and $6,491,875 in cash were issued to the
stockholders of First Family. At December 31, 1996, First Family had assets of
$167.3 million, deposits of $156.7 million and stockholders' equity of $8.7
million.
On January 31, 1997, D/W Bankshares, Inc. ("Bankshares") was merged into
the Corporation. Bankshares was a Georgia corporation and a holding company for
Dalton/Whitfield Bank & Trust located in Dalton, Georgia ("Dalton/Whitfield").
Dalton/Whitfield will merge with the Corporation's Georgia bank subsidiary,
Colonial Bank. 1,016,548 shares of the Corporation's Common Stock were issued to
the stockholders of Bankshares. At December 31, 1996, Bankshares had assets of
$138.7 million, deposits of $124.4 million and stockholders' equity of $11.0
million.
The shares issued in the above acquisitions are shown after adjustment for
a 2 for 1 stock split of the Corporation undertaken on February 11, 1997.
The Corporation entered into a definitive agreement dated November 18,
1996, to merge Fort Brooke Bancorporation ("Fort Brooke") into the Corporation.
Fort Brooke is a Florida corporation and is a holding company for Fort Brooke
Bank located in Tampa, Florida. Fort Brooke will merge with the Corporation and
following such merger Fort Brooke Bank will merge with the Corporation's Florida
bank subsidiary, Colonial Bank. Based on the market price of the Corporation's
Common Stock as of January 10, 1997, 1,607,854 shares of the Corporation's
Common Stock would be issued to the stockholders of Fort Brooke subject to
maximum and minimum amounts. The actual number of shares of the Corporation's
Common Stock to be issued in this transaction will depend upon the market value
of such Common Stock at the time of the merger subject to a maximum of 1,950,152
shares and a minimum of 1,600,124 shares to be issued. This transaction is
subject to, among other things, approval by the stockholders of Fort Brooke and
approval by appropriate regulatory authorities. At December 31, 1996, Fort
Brooke had assets of $208.8 million, deposits of $185.8 million and
stockholders' equity of $16.6 million.
The Corporation also entered into a definitive agreement to merge Shamrock
Holding, Inc., parent of The Union Bank in Evergreen, Alabama, ("Shamrock") into
the Corporation. Pursuant to that agreement, the Corporation will make a cash
offer to purchase all of the outstanding shares of Shamrock for an aggregate
cash price of $11,482,000, subject to regulatory approval and other conditions.
The Union Bank has total assets of approximately $54.5 million, deposits of
$46.4 million, and stockholders' equity of $7.9 million and will be merged with
the Corporation's Alabama subsidiary, Colonial Bank.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Corporation's consolidated ratios of
earnings to fixed charges and to combined fixed charges and preferred stock
dividends, in each case, calculated excluding and including interest on
deposits. The following ratios should be read in conjunction with the
consolidated financial statements, the notes thereto and other financial
information incorporated by reference herein. For the purpose of computing the
consolidated ratios of earnings to fixed charges, earnings represent
consolidated income before income taxes plus fixed charges. Fixed charges
excluding interest on deposits consist of interest on long-term debt and
short-term borrowings and one-third of rental expense (which is deemed
representative of the interest factor). Fixed charges including interest on
deposits consist of the foregoing items plus interest on deposits. Fixed charges
are then
14
<PAGE> 30
combined with preferred stock dividend requirements, (Distributions) on the
outstanding preferred stock (Capital Securities).
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1996 1995 1994 1993 1992
------------- ---- ---- ---- ----
(PRELIMINARY)
<S> <C> <C> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on Deposits(1)................. 2.68 2.84 3.92 3.94 3.69
Including Interest on Deposits(1)................. 1.38 1.41 1.49 1.45 1.31
Earnings to Combined Fixed Charges and Preferred
Stock Dividend Requirements:
Excluding Interest on Deposits(1)................. 2.47 2.57 3.13 2.91 2.60
Including Interest on Deposits(1)................. 1.36 1.40 1.46 1.41 1.29
</TABLE>
- ---------------
(1) Restated to give retroactive effect to the business combination with
Jefferson Bancorp, Inc. on January 3, 1997.
15
<PAGE> 31
RECENT DEVELOPMENTS -- COLONIAL BANCGROUP, INC.
The following table presents certain unaudited data for the Corporation for
the period ended December 31, 1996 (as restated to reflect the business
combination with Jefferson Bancorp, Inc. on January 3, 1997 which was accounted
for as a pooling of interests.) Unaudited restated data reflect, in the opinion
of management, all adjustments (consisting of normal recurring adjustments)
necessary to a fair presentation of such data.
THE COLONIAL BANCGROUP, INC.
SELECTED FINANCIAL DATA
(AS RESTATED)
<TABLE>
<CAPTION>
% CHANGE
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 TO 1995
------------ ------------ --------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
<S> <C> <C> <C>
STATEMENT OF CONDITION SUMMARY
Total assets............................................ $5,329,364 $4,635,198 15%
Loans, net of unearned income........................... 4,001,772 3,442,159 16%
Deposits................................................ 3,989,505 3,575,485 12%
Shareholders' equity.................................... 375,985 327,088 15%
Book value per share**.................................. $ 10.30 $ 9.41 9%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
% CHANGE
1996 1995 96 TO 95
-------- -------- --------
<S> <C> <C> <C>
EARNINGS SUMMARY
Net interest income......................................... $186,927 $157,489 19%
Provision for loan losses................................... 11,291 7,500 51%
Noninterest income.......................................... 69,323 58,599 18%
Noninterest expense (excl SAIF special assessment)*......... 166,762 141,112 18%
SAIF special assessment*.................................... 3,817 -- --
Net income (excl SAIF special assessment)*.................. 50,624 43,462 16%
Net income.................................................. $ 48,158 $ 43,462 11%
Average primary shares outstanding**........................ 36,898 35,258
Average fully diluted shares outstanding**.................. 37,640 37,034
Earnings per share excluding SAIF special assessment*:
Primary**................................................. $ 1.38 $ 1.23 12%
Fully diluted**........................................... $ 1.36 $ 1.21 12%
Earnings per common share:
Primary**................................................. $ 1.31 $ 1.23 7%
Fully-diluted**........................................... $ 1.29 $ 1.21 7%
</TABLE>
16
<PAGE> 32
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------
1996 1995
----- -----
<S> <C> <C>
SELECTED RATIOS:
Return on average assets.................................... 0.97% 1.07%
Return on average assets (excl SAIF assessment)*............ 1.02 1.07
Return on average equity.................................... 13.51 15.27
Return on average equity (excl SAIF assessment)*............ 14.20 15.27
Efficiency ratio (excl SAIF assessment)*.................... 65.02 64.63
Equity to assets............................................ 7.05 7.06
Tier one capital............................................ 9.12 8.70
</TABLE>
- ---------------
* Legislation approving a one-time special assessment on SAIF deposits resulted
in $3,817,000 in expense before income taxes and $2,466,000 net of applicable
income taxes in the third quarter of 1996.
** Restated to reflect the impact of a two-for-one stock split in the form of a
100% stock dividend paid February 11, 1997.
17
<PAGE> 33
SELECTED FINANCIAL DATA
(AS RESTATED)
The following table sets forth selected financial information on a
historical (as restated) basis for the Corporation as of and for the nine months
ended September 30, 1996 and 1995 and as of and for the five years ended
December 31, 1995, 1994, 1993, 1992, and 1991.
The information has been restated to reflect the January 3, 1997 business
combination with Jefferson Bancorp, Inc. which was accounted for as a pooling of
interests.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Income
Interest income................................. $282,190 $229,550 $317,933 $237,009 $187,291 $175,249 $182,850
Interest expense................................ 143,496 114,402 160,444 98,335 73,739 77,682 104,487
-------- -------- -------- -------- -------- -------- --------
Net interest income............................. 138,694 115,148 157,489 138,674 113,552 97,567 78,363
Provision for possible loan losses.............. 6,118 4,305 7,500 7,836 11,185 12,700 10,083
-------- -------- -------- -------- -------- -------- --------
Net interest income after provision for possible
loan losses................................... 132,576 110,843 149,989 130,838 102,367 84,867 68,280
Noninterest income.............................. 53,162 42,132 58,599 52,098 48,795 43,909 37,166
Noninterest expense............................. 121,773 100,583 141,112 133,829 117,251 104,098 88,135
-------- -------- -------- -------- -------- -------- --------
Income before income taxes...................... 63,965 52,392 67,476 49,107 33,911 24,678 17,311
Applicable income taxes......................... 22,566 18,572 24,014 16,349 10,308 6,668 4,658
-------- -------- -------- -------- -------- -------- --------
Income before extraordinary items and the
cumulative effect of a change in accounting
for income taxes.............................. 41,399 33,820 43,462 32,758 23,603 18,010 12,653
Extraordinary items, net of income taxes........ (463) 831
Cumulative effect of a change in accounting for
income taxes.................................. 3,650
-------- -------- -------- -------- -------- -------- --------
Net income...................................... $ 41,399 $ 33,820 $ 43,462 $ 32,758 $ 26,790 $ 18,010 $ 13,484
======== ======== ======== ======== ======== ======== ========
Earnings Per Common Share
Income before extraordinary items and the
cumulative effect of a change in accounting
for income taxes:
Primary**....................................... $ 1.13 $ 1.01 $ 1.23 $ 0.98 $ 0.82 $ 0.71 $ 0.52
Fully-diluted**................................. $ 1.11 $ 0.99 $ 1.21 $ 0.97 $ 0.81 $ 0.71 $ 0.52
Net Income:
Primary**....................................... $ 1.13 $ 1.01 $ 1.23 $ 0.98 $ 0.93 $ 0.71 $ 0.56
Fully-diluted**................................. $ 1.11 $ 0.99 $ 1.21 $ 0.97 $ 0.92 $ 0.71 $ 0.55
Average shares outstanding:
Primary**....................................... 36,777 33,385 35,258 33,378 28,816 25,456 24,156
Fully-diluted**................................. 37,467 35,034 37,034 34,912 31,022 28,122 26,840
Cash dividends per common share(1):
Common**........................................ $ 0.405 $ .225 $ .3375
Class A**....................................... $ .1125 $ .1125 $ .40 $ .355 $ .335 $ .315
Class B**....................................... $ .0625 $ .0625 $ .20 $ .155 $ .135 $ .115
</TABLE>
- ---------------
(1) On February 21, 1995, the Class A and Class B Common Stock were reclassified
into one class of Common Stock.
18
<PAGE> 34
<TABLE>
<CAPTION>
AS OF AS OF DECEMBER 31,
SEPTEMBER 30, --------------------------------------------------------------
1996 1995 1994 1993 1992 1991
------------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Statement of Condition Summary
At year-end:
Total assets......................... $5,171,999 $4,635,198 $3,583,357 $3,457,261 $2,415,930 $2,256,065
Loans, net of unearned income........ 3,877,183 3,422,159 2,554,238 2,128,408 1,501,456 1,401,173
Mortgage loans held for sale......... 162,821 112,203 61,556 368,515 150,835 105,219
Deposits............................. 3,947,778 3,575,485 2,811,329 2,741,990 2,032,246 1,925,997
Long-term debt....................... 24,605 29,142 69,203 57,397 22,979 27,225
Shareholders' equity................. 367,368 327,088 253,389 236,039 146,486 145,298
Average balances:
Total assets......................... $4,883,604 $4,071,450 $3,430,220 $2,753,585 $2,354,542 $2,160,908
Interest-earning assets.............. 4,460,798 3,711,269 3,095,963 2,441,029 2,076,097 1,927,815
Loans, net of unearned income........ 3,651,785 2,931,666 2,312,422 1,656,255 1,460,366 1,403,980
Mortgage loans held for sale......... 139,035 98,785 135,046 248,502 121,820 65,373
Deposits............................. 4,451,849 3,181,066 2,768,866 2,188,618 1,983,221 1,842,306
Shareholders' equity................. 350,756 284,632 248,133 179,989 141,645 137,971
Book value per share at year-end**... $ 10.12 $ 9.41 $ 7.90 $ 7.63 $ 6.20 $ 6.20
Tangible book value per share at
year-end**......................... $ 8.96 $ 8.54 $ 7.24 $ 7.04 $ 5.96 $ 5.20
Selected Ratios:
Income before extraordinary items and
the cumulative effect of a change
in accounting for income taxes to:
Average assets....................... 0.84% 1.07% 0.95% 0.86% 0.78% 0.62%
Average shareholders' equity......... 11.96 15.27 13.20 13.11 12.71 10.15
Net income:
Average assets....................... 0.84 1.07 0.95 0.97 0.78 0.62
Average shareholders' equity......... 11.96 15.27 13.20 14.88 12.71 10.15
Efficiency ratio..................... 63.47 64.63 69.37 71.82 73.03 76.17
Dividend payout ratio................ 31.88 28.39 27.99 27.73 32.83 43.68
Average equity to average total
assets............................. 7.06 6.99 7.23 6.54 6.02 6.38
Total nonperforming assets to net
loans, other real estate and
repossessions...................... 0.82 0.83 1.26 1.80 2.33 2.00
Net charge-offs to average loans..... 0.08 0.17 0.13 0.36 0.58 0.61
Allowance for possible loan losses to
total loans (net of unearned
income)............................ 1.23 1.28 1.57 1.63 1.55 1.36
Allowance for possible loan losses to
nonperforming loans*............... 214% 256% 237% 211% 129% 124%
</TABLE>
- ---------------
* Nonperforming loans consist of the aggregate loans for which interest is not
being accrued and loans renegotiated to provide a reduction or deferral of
principal or interest because of a deterioration in the financial condition
of the borrower.
** Restated to reflect the impact of a two-for-one stock split in the form of a
100% stock dividend paid February 11, 1997.
19
<PAGE> 35
COLONIAL CAPITAL II
The Issuer is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary of
State on February 14, 1997, and governed by the New Trust Agreement between the
Corporation, as Depositor, and Wilmington Trust Company, as Property Trustee and
as Delaware Trustee, and the Administrative Trustees named therein. The Issuer's
business and affairs are conducted by its trustees: Wilmington Trust Company, as
Property Trustee and Delaware Trustee, and the Administrative Trustees. Two
individuals who are employees or officers of or affiliated with the holder of a
majority of the New Common Securities will act as the Administrative Trustees
with respect to the Issuer. The Administrative Trustees will be selected by the
holders of the New Common Securities. See "Description of Capital
Securities -- Miscellaneous." The Issuer exists for the exclusive purposes of
(i) complying with the Registration Rights Agreement by offering and issuing the
New Capital Securities pursuant to the Exchange Offer, (ii) acquiring the New
Subordinated Debentures and (iii) engaging in only those other activities
necessary, convenient or incidental thereto (such as registering the transfer of
the New Trust Securities). Accordingly, the New Subordinated Debentures will be
the sole assets of the Issuer, and payments under the New Subordinated
Debentures will be the sole source of revenue of the Issuer.
All of the New Common Securities will initially be owned by the
Corporation. The New Common Securities will rank pari passu, and payments will
be made thereon pro rata, with the New Capital Securities, except that upon the
occurrence and during the continuation of a Debenture Event of Default arising
as a result of any failure by the Corporation to pay any amounts in respect of
the New Subordinated Debentures when due, the rights of the holders of the New
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption or otherwise will be subordinated to the rights of the
holders of the New Capital Securities. See "Description of New
Securities -- Subordination of Common Securities." The Corporation will acquire
New Common Securities in an aggregate liquidation amount equal to 3% of the
total capital of the Issuer. The Issuer has a term of 31 years, but may
terminate earlier as provided in the New Trust Agreement. The principal
executive office of the Issuer is Colonial Financial Center, One Commerce
Street, Montgomery, Alabama 36104, Attention: W. Flake Oakley, and its telephone
number is (334) 240-5000.
COLONIAL CAPITAL I
The Old Issuer is a statutory business trust created under Delaware law
pursuant to the filing of a certificate of trust with the Delaware Secretary of
State on January 24, 1997 and governed by the Old Trust Agreement between the
Corporation, as Depositor, and Wilmington Trust Company, as Property Trustee and
as Delaware Trustee, and the Administrative Trustees named therein. The Old
Issuer's business and affairs are conducted by its trustees: Wilmington Trust
Company, as Property Trustee and Delaware Trustee, and the Administrative
Trustees. Two individuals, W. Flake Oakley, Executive Vice President and Chief
Financial Officer of the Corporation, and Young J. Boozer, III, Executive Vice
President of the Corporation, serve as the Administrative Trustees. The Old
Issuer exists for the exclusive purposes of (i) issuing and selling the Old
Trust Securities, (ii) using the proceeds from the sale of the Old Trust
Securities to acquire the Old Subordinated Debentures and (iii) engaging in only
those other activities necessary, convenient or incidental thereto (such as
registering the transfer of the Old Trust Securities). Accordingly, the Old
Subordinated Debentures are the sole assets of the Old Issuer, and payments
under the Old Subordinated Debentures will be the sole source of revenue of the
Old Issuer.
All of the Old Common Securities are owned by the Corporation. The Old
Common Securities rank pari passu, and payments will be made thereon pro rata,
with the Old Capital Securities, except that upon the occurrence and during the
continuation of a Debenture Event of Default arising as a result of any failure
by the Corporation to pay any amounts in respect of the Old Subordinated
Debentures when due, the rights of the holders of the Old Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption or
otherwise will be subordinated to the rights of the holders of the Old Capital
Securities. The Corporation acquired Old Common Securities in an aggregate
liquidation amount equal to 3% of the total capital of the Old Issuer. The Old
Issuer has a term of 31 years, but may terminate earlier as provided in the Old
Trust Agreement. The principal executive office of the Old Issuer is Colonial
Financial Center, One Commerce Street, Montgomery, Alabama 36104. Attention: W.
Flake Oakley, and its telephone number is (334) 240-5000.
20
<PAGE> 36
The Old Issuer is a party to the Registration Rights Agreement, which
provides for the Exchange Offer pursuant to the Registration Statement.
USE OF PROCEEDS
Neither the Corporation nor the Issuer will receive cash proceeds from the
issuance of the New Capital Securities offered hereby. In consideration for
issuing the New Capital Securities in exchange for Old Capital Securities as
described in this Prospectus, the Issuer will receive Old Capital Securities in
like Liquidation Amount. The Old Capital Securities surrendered in exchange for
the New Capital Securities will be retired and canceled.
The net proceeds to the Old Issuer from the offering of the Old Capital
Securities was approximately $70 million in cash (before deducting expenses
associated with the offering). All of the proceeds from the sale of the Old
Capital Securities were invested by the Old Issuer in the Old Subordinated
Debentures. The net proceeds from the sale of the Old Subordinated Debentures
were added by the Corporation to its general corporate funds and have been and
will be used for general corporate purposes, including acquisitions. Pending
such application by the Corporation, such net proceeds may be temporarily
invested in short-term interest bearing securities. See "Capitalization".
The Corporation is required by the Federal Reserve Board to maintain
certain levels of capital for bank regulatory purposes. On October 21, 1996, The
Federal Reserve Board announced that cumulative preferred securities having the
characteristics of the Capital Securities and which qualify as a minority
interest could be included as tier 1 capital for bank holding companies. Such
tier 1 capital treatment, together with the Corporation's ability to deduct, for
income tax purposes, interest payable on the Subordinated Debentures, will
provide the Corporation with a more cost-effective means of obtaining capital
for regulatory purposes than other tier 1 capital alternatives currently
available to it.
21
<PAGE> 37
CAPITALIZATION
The following table sets forth (i) the unaudited consolidated
capitalization of the Corporation at December 31, 1996, and (ii) such
capitalization as adjusted for the offering of the Old Capital Securities.
<TABLE>
<CAPTION>
COLONIAL COLONIAL
BANCGROUP BANCGROUP
RESTATED(3) ADJUSTED
----------- ---------
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Short term borrowings
Fed funds & repos........................................... 139,262 139,262
FHLB........................................................ 715,000 715,000
-------- --------
Total short term borrowings................................. 854,262 854,262
Long term debt..............................................
Subordinated debt........................................... 7,187 7,187
Other....................................................... 30,480 480(1)
-------- --------
Total long term debt........................................ 37,667 7,667
Corporation-Obligated Mandatory Redeemable Capital
Securities of Subsidiary Trust(2)......................... -- 70,000
-------- --------
Total debt.................................................. $891,929 $931,929
======== ========
Shareholders' Equity........................................
Preference Stock, $2.50 par value; 1,000,000 shares
authorized, none issued...................................
Common Stock, $2.50 par value; 44,000,000 shares authorized,
and 36,528,560 (restated) issued and outstanding*......... 91,321 91,321
Additional paid in capital*................................. 155,833 155,833
Retained earnings........................................... 129,871 129,871
Unearned compensation....................................... (1,603) (1,603)
Unrealized gain/loss on securities available for sale, net
of taxes.................................................. 563 563
-------- --------
Total shareholders' equity.................................. $375,985 $375,985
======== ========
Capital Ratios:
Tier 1 Capital(2)......................................... 9.12% 10.96%
Risk Adjusted Capital(2).................................. 10.50% 12.34%
Leverage Ratio............................................ 6.65% 8.00%
</TABLE>
- ---------------
(1) Assumes approximately $30 million of proceeds from the issuance of Capital
Securities will be used to pay off existing debt and the remainder will be
invested in U.S. Treasury securities which have a zero percent risk weight.
(2) The "Corporation-Obligated Mandatorily Redeemable Capital Securities of
Subsidiary Trust" reflects the Old Capital Securities at their issue price.
As described herein, the sole assets of the Old Issuer are approximately $72
million of Subordinated Debentures, which will mature on January 15, 2027.
The Corporation owns all of the Common Securities of the Old Issuer. It is
anticipated that the Issuer following the Exchange Offer will not be subject
to the reporting requirements under the Securities Exchange Act of 1934
(3) Restated to give retroactive effect to the business combination of Jefferson
Bancorp, Inc., consummated on January 3, 1997.
* Restated to reflect the impact of a two-for-one stock split in the form of a
100% stock dividend paid February 11, 1997.
ACCOUNTING TREATMENT
For financial reporting purposes, the Issuer and the Old Issuer will be
treated as subsidiaries of the Corporation and, accordingly, the accounts of the
Issuer and the Old Issuer will be included in the consolidated financial
statements of the Corporation. The Capital Securities will be presented as a
separate line item in the consolidated balance sheets of the Corporation,
entitled "Corporation-Obligated Mandatorily Redeemable Capital Securities of
Subsidiary Trusts Holding Solely New Subordinated Deferrable Interest Debentures
of the Corporation" and appropriate disclosures about the Capital Securities,
the Guarantee and the Subordinated Debentures will be included in the notes to
the consolidated financial statements. For financial reporting
22
<PAGE> 38
purposes, the Corporation will record Distributions payable on the Capital
Securities as an expense in the consolidated statements of income.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the Corporation
and the Old Issuer entered into the Registration Rights Agreement with the
Initial Purchasers, pursuant to which the Corporation agreed to file a
registration statement relating to an offer to exchange any and all of the Old
Capital Securities for a like aggregate liquidation amount of capital securities
issued by an issuer trust substantially identical to the Old Issuer, with
capital securities with terms identical in all material respects to the terms of
the Old Capital Securities. A copy of the Registration Rights Agreement has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part.
Among other things, the Registration Rights Agreement provides that the
Corporation will file under the Securities Act, as soon as practicable, but no
later than 60 days after January 29, 1997, a registration statement relating to
the Exchange Offer. The Corporation has agreed to use its best efforts to cause
the registration statement to become effective under the Securities Act as soon
as practicable, but no later than 180 days after January 29, 1997. The
Corporation has also agreed to use its best efforts to commence and complete the
Exchange Offer promptly, but no later than 35 days after such registration
statement has become effective.
If (i) the registration statement has not been filed on or before the date
on which such registration statement is required to be filed, or (ii) such
registration statement has not become effective or been declared effective by
the Commission on or before the date on which such registration statement is
required to become or be declared effective, or (iii) if the Exchange Offer has
not been completed within 35 days after the initial effective date of the
Exchange Registration Statement, then additional interest (the "Special
Interest") shall accrue in respect of the Old Subordinated Debentures, and
additional distributions ("Special Distributions") shall accumulate in respect
of the Old Capital Securities, in each case at a per annum rate of 0.25%
applicable to the principal amount of the Old Subordinated Debentures or the
liquidation amount of the Old Capital Securities, as the case may be, for the
period from and including the date on which such failure to comply with the
Registration Rights Agreement occurs to but excluding the date on which such
failure to comply is cured.
The Exchange Offer is being made to satisfy the contractual obligations of
the Corporation and the Old Issuer under the Registration Rights Agreement. The
form and terms of the New Capital Securities are the same in all material
respects as the form and terms of the Old Capital Securities, except that the
New Capital Securities (i) have been registered under the Securities Act and
therefore will not be subject to certain restrictions on transfer applicable to
the Old Capital Securities and (ii) will not provide for any increase in the
Distribution rate thereon. Upon consummation of the Exchange Offer, holders of
Old Capital Securities that have not been tendered and exchanged pursuant to the
Exchange Offer will not be entitled to any increase in the Distribution rate
thereon or any further registration rights under the Registration Rights
Agreement, except under limited circumstances. See "Risk Factors -- Consequences
of a Failure to Exchange Old Capital Securities" and "Description of Old
Securities".
The Exchange Offer is not being made to, nor will the Issuer or the
Corporation accept tenders for exchange from, holders of Old Capital Securities
in any jurisdiction in which the Exchange Offer or the acceptance thereof would
not be in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Old Capital Securities are
registered on the books of the Old Issuer or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
Old Capital Securities are held of record by DTC who desires to deliver such Old
Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will exchange as soon as
practicable after the date hereof, the Old Guarantee in its entirety for the New
Guarantee (provided that all Old Capital Securities have been
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<PAGE> 39
exchanged in the Exchange Offer, otherwise the Old Guarantee will continue to
apply to any Old Capital Securities which have not been exchanged). The
Corporation will also exchange all of the Old Subordinated Debentures, of which
$72,165,000 aggregate principal amount is outstanding, for a like, aggregate
principal amount of the New Subordinated Debentures, which will be issued under
the Indenture as part of the same series as the Old Subordinated Debentures. The
New Guarantee and New Subordinated Debentures have been registered under the
Securities Act.
TERMS OF EXCHANGE
The Issuer hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter Transmittal, to exchange
up to $70,000,000 aggregate Liquidation Amount of New Capital Securities for a
like aggregate Liquidation Amount of Old Capital Securities properly tendered on
or prior to the Expiration Date and not properly withdrawn in accordance with
the procedures described below. The Issuer will issue, promptly after the
Expiration Date, an aggregate Liquidation Amount of up to $70,000,000 of New
Capital Securities in exchange for a like Liquidation Amount of outstanding Old
Capital Securities tendered and accepted in connection with the Exchange Offer.
Holders may tender their Old Capital Securities in whole or in part in a
Liquidation Amount of not less than $100,000 or any integral multiple of $1,000
in excess thereof.
The Exchange Offer is not conditioned upon any minimum Liquidation Amount
of Old Capital Securities being tendered. As of the date of this Prospectus,
$70,000,000 aggregate Liquidation Amount of the Old Capital Securities is
outstanding.
Holders of Old Capital Securities do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Capital Securities which are
not tendered or are tendered but not accepted in connection with the Exchange
Offer will remain outstanding and be entitled to the benefits of the Old Trust
Agreement, the Old Guarantee and the Old Expense Agreement, but will not be
entitled to any further registration rights under the Registration Rights
Agreement, or to Special Distributions, and will continue to be subject to
restrictions on transfer. See "Risk Factors -- Consequences of a Failure to
Exchange Old Capital Securities" and "Description of Old Securities".
If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital Securities
will be returned, without expense, to the tendering holder thereof promptly
after the Expiration Date.
Holders who tender Old Capital Securities in connection with the Exchange
Offer will not be required to pay brokerage commissions or fees or, subject to
the instructions in the Letter of Transmittal, transfer taxes with respect to
the exchange of Old Capital Securities in connection with the Exchange Offer.
The Corporation will pay all charges and expenses, other than certain applicable
taxes described below, in connection with the Exchange Offer. See "-- Fees and
Expenses".
NEITHER THE BOARD OF DIRECTORS OF THE CORPORATION NOR ANY ADMINISTRATOR OR
TRUSTEE OF THE ISSUER OR THE OLD ISSUER MAKES ANY RECOMMENDATION TO HOLDERS OF
OLD CAPITAL SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR
ANY PORTION OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN
ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF
OLD CAPITAL SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT
TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES
TO TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND
CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION
AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
, 1997, unless the Exchange Offer is extended by the Issuer (in which
case the term "Expiration Date" shall mean the latest date and time to which the
Exchange Offer is extended).
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<PAGE> 40
The Corporation and the Issuer expressly reserve the right in their sole
discretion, subject to applicable law, at any time and from time to time, (i) to
delay the acceptance of the Old Capital Securities for exchange, (ii) to
terminate the Exchange Offer (whether or not any Old Capital Securities have
theretofore been accepted for exchange) if the Corporation and the Issuer
determine, in their sole discretion, that any of the events or conditions
referred to under "-- Conditions to the Exchange Offer" have occurred or exist
or have not been satisfied, (iii) to extend the Expiration Date of the Exchange
Offer and retain all Old Capital Securities tendered pursuant to the Exchange
Offer, subject, however, to the right of holders of Old Capital Securities to
withdraw their tendered Old Capital Securities as described under "-- Withdrawal
Rights", and (iv) to waive any condition or otherwise amend the terms of the
Exchange Offer in any respect. If the Exchange Offer is amended in a manner
determined by the Corporation and the Issuer to constitute a material change, or
if the Corporation and the Issuer waive a material condition of the Exchange
Offer, the Corporation and the Issuer will promptly disclose such amendment by
means of an amended or supplemental prospectus that will be distributed to the
registered holders of the Old Capital Securities, and the Issuer will extend the
Exchange Offer to the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation and the Issuer may choose to make any public
announcement other than by issuing a release to an appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange Offer, the
Issuer will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
(pursuant to the withdrawal rights described under "-- Withdrawal Rights")
promptly after the Expiration Date.
In all cases, delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of Old
Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder has not delivered a Letter or
Transmittal, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees or (in the
case of a book-entry transfer) an Agent's Message in lieu of the Letter of
Transmittal, and (iii) any other documents required by the Letter of
Transmittal.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the tendering
participant, which acknowledgement states that such participant has received and
agrees to be bound by the Letter of Transmittal and that the Issuer and the
Corporation may enforce such Letter of Transmittal against such participant.
Subject to the terms and conditions of the Exchange Offer, the Corporation
and the Issuer will be deemed to have accepted for exchange, and thereby
exchanged, Old Capital Securities validly tendered and not withdrawn as, if and
when the Issuer gives oral or written notice to the Exchange Agent of the
Corporation's and the Issuer's acceptance of such Old Capital Securities for
exchange pursuant to the Exchange Offer. The Exchange Agent will act as agent
for the Corporation and the Issuer for the purpose of receiving tenders of Old
Capital Securities, Letters of Transmittal and related documents, and as agent
for tendering holders for the purpose of receiving Old Capital Securities,
Letters of Transmittal and related documents, and transmitting New Capital
Securities to validly tendering holders. Such exchange will be made promptly
after the Expiration Date. If for any reason whatsoever, acceptance for exchange
or the exchange of any Old Capital Securities tendered pursuant to the Exchange
Offer is delayed (whether before or after the Corporation's and the Issuer's
acceptance for exchange of Old Capital Securities) or the Corporation and the
Issuer extend the Exchange Offer or are unable to accept for exchange or
exchange Old Capital Securities tendered pursuant to the Exchange Offer, then,
without prejudice to
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<PAGE> 41
the Corporation's and the Issuer's rights set forth herein, the Exchange Agent
may, nevertheless, on behalf of the Corporation and the Issuer and subject to
Rule 14e-1(c) under the Exchange Act, retain tendered Old Capital Securities and
such Old Capital Securities may not be withdrawn except to the extent tendering
holders are entitled to withdrawal rights as described under "-- Withdrawal
Rights".
Pursuant to the Letter of Transmittal or Agent's Message in lieu thereof, a
holder of Old Capital Securities will warrant and agree in the Letter of
Transmittal that it has full power and authority to tender, exchange, sell,
assign and transfer Old Capital Securities, that the Issuer will acquire good,
marketable and unencumbered title to the tendered Old Capital Securities, free
and clear of all liens, restrictions, charges and encumbrances, and the Old
Capital Securities tendered for exchange are not subject to any adverse claims
or proxies. The holder also will warrant and agree that it will, upon request,
execute and deliver any additional documents deemed by the Corporation, the
Issuer or the Exchange Agent to be necessary or desirable to complete the
exchange, sale, assignment, and transfer of the Old Capital Securities tendered
pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or (in the case of a book-entry tender) an
Agent's Message in lieu of the Letter of Transmittal, and any other required
documents, must be received by the Exchange Agent at one of its addresses set
forth under "-- Exchange Agent", and either (i) tendered Old Capital Securities
must be received by the Exchange Agent, or (ii) such Old Capital Securities must
be tendered pursuant to the procedures for book-entry transfer set forth below
and a book-entry confirmation, including an Agent's Message if the tendering
holder has not delivered a Letter of Transmittal, must be received by the
Exchange Agent, in each case on or prior to the Expiration Date, or (iii) the
guaranteed delivery procedures set forth below must be satisfied.
If less than all of the Capital Securities are tendered, a tendering holder
should fill in the amount of Old Capital Securities being tendered in the
appropriate box on the Letter of Transmittal. The entire amount of Old Capital
Securities delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, OF THE LETTER OF TRANSMITTAL AND OF
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book Entry Transfer. The Exchange Agent will establish an account with
respect to the Old Capital Securities at DTC for purposes of the Exchange Offer
within two business days after the date of this Prospectus. Any financial
institution that is a participant in DTC's book-entry transfer facility system
may make a book-entry delivery of the Old Capital Securities by causing DTC to
transfer such Old Capital Securities into the Exchange Agent's account at DTC in
accordance with DTC's procedures for transfer. However, although delivery of Old
Capital Securities may be effected through book-entry transfer into the Exchange
Agent's account at DTC, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message in lieu of the Letter of Transmittal, and any other required
documents, must in any case be delivered to and received by the Exchange Agent
at its address set forth under "-- Exchange Agent" on or prior to the Expiration
Date, or the guaranteed delivery procedure set forth below must be complied
with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT
Signature Guarantees. Certificates for the Old Capital Securities need not
be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (i) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (ii) such registered holder
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completes the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" in the Letter of Transmittal. In the case of (i) or (ii) above,
such certificates for Old Capital Securities must be duly endorsed or
accompanied by a properly executed bond power, with the endorsement or signature
on the bond power and on the Letter of Transmittal guaranteed by a firm or other
entity identified in Rule 17Ad-15 under the Exchange Act as an "eligible
guarantor institution," including (as such terms are defined therein): (i) a
bank; (ii) a broker, dealer, municipal securities broker or dealer or government
securities broker or dealer; (iii) a credit union; (iv) a national securities
exchange, registered securities association or clearing agency; or (v) a savings
association that is a participant in a Securities Transfer Association (an
"Eligible Institution"), unless surrendered on behalf of such Eligible
Institution. See Instruction 1 to the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital Securities
pursuant to the Exchange Offer and the certificates for such Old Capital
Securities are not immediately available or time will not permit all required
documents to reach the Exchange Agent on or before the Expiration Date, or the
procedures for book-entry transfer cannot be completed on a timely basis, such
Old Capital Securities may nevertheless be tendered, provided that all of the
following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal
is received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing all
tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof or Agent's Message in lieu thereof), with any required signature
guarantees and any other documents required by the Letter of Transmittal,
are received by the Exchange Agent within three New York Stock Exchange
trading days after the date of execution of such Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New Capital
Securities in exchange for Old Capital Securities tendered and accepted for
exchange pursuant to the Exchange Offer will in all cases be made only after
timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile thereof
or Agent's Message in lieu thereof), together with any required signature
guarantees and any other documents required by the Letter of Transmittal.
Accordingly, the delivery of New Capital Securities might not be made to all
tendering holders at the same time, and will depend upon when Old Capital
Securities, book-entry confirmations with respect to Old Capital Securities and
other required documents are received by the Exchange Agent.
The Corporation's and the Issuer's acceptance for exchange of Old Capital
Securities tendered pursuant to any of the procedures described above will
constitute a binding agreement between the tendering holder and the Issuer upon
the terms and subject to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Capital Securities will be determined by the Corporation and
the Issuer, in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Issuer reserve the absolute
right, in their sole discretion, to reject any and all tenders determined by
them not to be in proper form or the acceptance of which, or exchange for, may,
in the view of counsel to the Corporation or the Issuer, be unlawful. The
Corporation and the Issuer also reserve the absolute right, subject to
applicable law, to waive any of the conditions of the Exchange Offer as set
forth under "-- Conditions to the Exchange Offer" or any condition or
irregularity in any tender of Old Capital Securities of any particular holder
whether or not similar conditions or irregularities are waived in the case of
the other holders.
The Corporation's and the Issuer's interpretation of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old
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<PAGE> 43
Capital Securities will be deemed to have been validly made until all
irregularities with respect to such tender have been cured or waived. Neither
the Corporation, the Issuer, any affiliates or assigns of the Corporation or the
Issuer, the Exchange Agent nor any other person shall be under any duty to give
notification of any irregularities in tenders or incur any liability for failure
to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney,
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the Issuer,
proper evidence satisfactory to the Corporation and the Issuer, in their sole
discretion, of such person's authority to so act must be submitted.
A beneficial owner of Old Capital Securities that are held by or registered
in the name of a broker, dealer, commercial bank, trust company or other nominee
or custodian is urged to contact such entity promptly if such beneficial holder
wishes to participate in the Exchange Offer.
RESALES OF NEW CAPITAL SECURITIES
The Issuer is making the Exchange Offer for the Capital Securities in
reliance on the position of the staff of the Division of Corporate Finance of
the Commission as set forth in certain interpretive letters addressed to third
parties in other transactions. However, neither the Corporation nor the Issuer
sought its own interpretive letter, and there can be no assurance that the staff
of the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance, and subject to the two immediately following
sentences, the Corporation and the Issuer believe that the New Capital
Securities issued pursuant to this Exchange Offer in exchange for Old Capital
Securities may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that no such New Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of Old Capital Securities who
is an Affiliate or who intends to participate in the Exchange Offer for the
purpose of distributing New Capital Securities, or any broker-dealer who
purchased Old Capital Securities from the Old Issuer to resell pursuant to Rule
144A or any other available exemption under the Securities Act, (i) will not be
able to rely on the interpretations of the staff of the Division of Corporation
Finance of the Commission set forth in the above-mentioned interpretive letters,
and (ii) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any sale or other transfer of such Old
Capital Securities unless such sale is made pursuant to an exemption from such
requirements. In addition, as described below, Participating Broker-Dealers must
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of New Capital Securities.
Each holder of Old Capital Securities who wishes to exchange Old Capital
Securities for New Capital Securities in the Exchange Offer will be required to
represent that (i) it is not an Affiliate, (ii) any New Capital Securities to be
received by it are being acquired in the ordinary course of its business, (iii)
it has no arrangement or understanding with any person to participate in a
distribution (within the meaning of the Securities Act) of such New Capital
Securities, and (iv) if such holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a distribution (within the meaning
of the Securities Act) of such New Capital Securities, otherwise the limitations
on transfer described above may apply. In addition, the Corporation and the
Issuer may require such holder, as a condition to such holder's eligibility to
participate in the Exchange Offer, to furnish to the Corporation and the Issuer
(or an agent thereof) in writing information as to the number of "beneficial
owners" (within the meaning of the Rule 13d-3 under the Exchange Act) on behalf
of whom such holder holds the Capital Securities to be exchanged in the Exchange
Offer. Each Participating Broker-Dealer must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such New Capital Securities. The Letter of Transmittal states that by
so acknowledging and by delivering a prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. Based on the position taken by the staff of the Division of
Corporation
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Finance of the Commission in the interpretive letters referred to above, the
Corporation and the Issuer believe that Participating Broker-Dealers may fulfill
their prospectus delivery requirements with respect to the New Capital
Securities received upon exchange of such Old Capital Securities (other than Old
Capital Securities which may represent an unsold allotment from the original
sale of the Old Capital Securities) with a prospectus meeting the requirements
of the Securities Act, which may be the prospectus prepared for an exchange
offer so long as it contains a description of the plan of distribution with
respect to the resale of such New Capital Securities. Accordingly, this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer during the period referred to below in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities where such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Corporation and the Issuer have agreed that
this Prospectus, as it may be amended or supplemented from time to time may be
used by a Participating Broker-Dealer in connection with the resale of such New
Capital Securities for a period ending 90 days after the Expiration Date or, if
earlier, when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution". Any person, including
any Participating Broker-Dealer, who is an Affiliate may not rely on such
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction.
In that regard, each Participating Broker-Dealer who surrenders Old Capital
Securities pursuant to the Exchange Offer will be deemed to have agreed, by
execution of the Letter of Transmittal or delivery of an Agent's Message in lieu
thereof, that, upon receipt of notice from the Corporation or the Issuer of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in light if the circumstances under which they were made, not misleading
or of the occurrence of certain other events specified in the Registration
Rights Agreement, such Participating Broker-Dealer will suspend the sale of New
Capital Securities (or the New Guarantee or the New Subordinated Debentures, as
applicable) pursuant to this Prospectus until the Corporation or the Issuer has
amended or supplemented this Prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented Prospectus to such
Participating Broker-Dealer of the Corporation or the Issuer has given notice
that the sale of the New Capital Securities (or the New Guarantee or the New
Subordinated Debentures, as applicable) may be resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital Securities may
be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "-- Exchange Agent"
on or prior to the Expiration Date. Any such notice of withdrawal must specify
the name of the person who tendered the Old Capital Securities to be withdrawn,
the aggregate principal amount of Old Capital Securities to be withdrawn, and
(if certificates for such Old Capital Securities have been tendered) the name of
the registered holder of the Old Capital Securities as set forth on the Old
Capital Securities, if different from that of the person who tendered such Old
Capital Securities. If Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such Old
Capital Securities, the tendering holder must submit the certificate numbers
shown on the particular Old Capital Securities to be withdrawn and the signature
on the notice of withdrawal must be guaranteed by an Eligible Institution,
except in the case of Old Capital Securities tendered for the account of an
Eligible Institution. If Old Capital Securities have been tendered pursuant to
the procedures for book-entry transfer set forth in "-- Procedures for Tendering
Old Capital Securities", the notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawal of Old Capital
Securities, in which case a notice of withdrawal will be effective if delivered
to the Exchange Agent by written, telegraphic, telex or facsimile transmission.
Withdrawals of tenders of Old Capital Securities may not be rescinded. Old
Capital Securities properly withdrawn will not be deemed validly tendered for
the purposes of the Exchange Offer, but may be retendered at any subsequent time
prior to
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<PAGE> 45
the Expiration Date by following any of the procedures described above under
"-- Procedures for Tendering Old Capital Securities".
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Corporation and
the Issuer, in their sole discretion, whose determination shall be final and
binding on all parties. Neither the Corporation, the Issuer, any affiliates or
assigns of the Corporation or the Issuer, the Exchange Agent nor any other
person shall be under any duty to give any notification of any irregularities in
any notice of withdrawal or incur any liability for failure to give any such
notification. Any Old Capital Securities which have been tendered but which are
withdrawn will be returned to the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON THE NEW CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities are accepted
for exchange will not receive accumulated Distributions on such Old Capital
Securities for any period from and after the last Distribution Date (as defined
herein) with respect to such Old Capital Securities prior to the original issue
date of the New Capital Securities or, if no such Distributions have been made,
will not receive any accumulated Distributions on such Old Capital Securities
accumulated from and after such Distribution Date or, if no such Distributions
have been made, from and after January 29, 1997.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Corporation and the Issuer will not be
required to accept for exchange, or to exchange, any Old Capital Securities,
and, as described below, may terminate the Exchange Offer (whether or not any
Old Capital Securities have theretofore been accepted for exchange) or may waive
any conditions to or amend the Exchange Offer, if any of the following
conditions have occurred or exist or have not been satisfied:
(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the New Capital Securities issued
pursuant to the Exchange Offer in exchange for Old Capital Securities to be
offered for resale, resold and otherwise transferred by holders thereof
(other than broker-dealers and any such holder which is an Affiliate)
without compliance with the registration and prospectus delivery provisions
of the Securities Act, provided that such New Capital Securities are
acquired in the ordinary course of such holder's business and such holders
have no arrangement or understanding with any person to participate in the
distribution of such New Capital Securities;
(b) any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect
to the Exchange Offer which, in the Corporation's and the Issuer's
judgement, would reasonably be expected to impair the ability of the Issuer
or the Corporation to proceed with the Exchange Offer;
(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in the Corporation's and the Issuer's judgement, would
reasonably be expected to impair the ability of the Issuer or the
Corporation to proceed with the Exchange Offer;
(d) a banking moratorium shall have been declared by the United States
federal or Alabama or New York state authorities which, in the
Corporation's and the Issuer's judgement, would reasonably be expected to
impair the ability of the Issuer or the Corporation to proceed with the
Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the United
states over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Issuer's
judgement, would reasonably be expected to impair the ability of the Issuer
or the Corporation to proceed with the Exchange Offer;
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Corporation or the Issuer, threatened for that purpose or any
governmental approval has not been
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<PAGE> 46
obtained, which approval the Corporation and the Issuer shall, in their
sole discretion, deem necessary for the consummation of the Exchange Offer
as contemplated hereby; or
(g) any change, or any development involving a prospective change, in
the business or financial affairs of the Issuer or the Corporation or any
of its subsidiaries has occurred which, in the judgement of the Corporation
and the Issuer, might materially impair the ability of the Issuer or the
Corporation to proceed with the Exchange Offer.
If the Corporation and the Issuer determine in their sole discretion that
any of the foregoing events or conditions have occurred or exist or have not
been satisfied, the Corporation and the Issuer may, subject to applicable law,
terminate the Exchange Offer (whether or not any Old Capital Securities have
theretofore been accepted for exchange) or may waive any such condition or
otherwise amend the terms of the Exchange Offer in any respect. If such waiver
or amendment constitutes a material change to the Exchange Offer, the
Corporation and the Issuer will promptly disclose such waiver by means of an
amended or supplemental Prospectus that will be distributed to the registered
holders of the Old Capital Securities, and the Corporation and the Issuer will
extend the Exchange Offer to the extent required by Rule 14e-1 under the
Exchange Act.
EXCHANGE AGENT
Wilmington Trust Company has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent as follows:
Wilmington Trust Company, Rodney Square, North, 1100 Market Street,
Wilmington, Delaware 19890-0001 Attention: Corporate Trust Administration,
Telephone: (302) 651-8869, Facsimile: (302) 651-8882.
Delivery to other than the above address or facsimile number will not
constitute a valid delivery.
FEES AND EXPENSES
The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its reasonable out-of-pocket expenses in connection herewith.
The Corporation will also pay brokerage houses and other custodians, nominees
and fiduciaries the reasonable out-of-pocket expenses incurred by them in
forwarding copies of this Prospectus and related documents to the beneficial
owners of Old Capital Securities, and in handling or tendering for their
customers.
Holders who tender their Old Capital Securities for exchange will not be
obligated to pay any transfer taxes in connection therewith. If, however, New
Capital Securities are to be delivered to, or are to be issued in the name of,
any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Capital Securities in connection with the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemptions therefrom is not submitted with the
Letter of Transmittal, the amount of such transfer taxes will be billed directly
to such tendering holder.
Neither the Corporation nor the Issuer will make any payment to brokers,
dealer or others soliciting acceptances of the Exchange Offer.
DESCRIPTION OF NEW SECURITIES
Pursuant to the terms of the New Trust Agreement, the Issuer will issue the
New Trust Securities. The New Capital Securities will represent preferred
undivided beneficial interests in the assets of the Issuer and the holders
thereof will be entitled to a preference in certain circumstances with respect
to Distributions and amounts payable on redemption or liquidation over the New
Common Securities, as well as other benefits as described in the New Trust
Agreement. This summary of certain provisions of the New Securities and the New
Trust Agreement does not purport to be complete and is subject to, and qualified
in its entirety by reference to, all the provisions of the New Trust Agreement,
including the definitions therein of certain terms. Wherever particular defined
terms of the
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<PAGE> 47
New Trust Agreement are referred to herein, such defined terms are incorporated
herein by reference. The New Trust Agreement has been qualified under the Trust
Indenture Act of 1939 (the "Trust Indenture Act").
The terms of the New Capital Securities are the same in all material
respects as the terms of the Old Capital Securities, except that the New Capital
Securities have been registered for issue and exchange under the Securities Act,
the New Capital Securities will not provide for any Special Distribution, and
the New Subordinated Debentures will not provide for any Special Interest. See
"Description of Old Securities." When used in this section, "Description of New
Securities, " the term "Issuer" includes the Issuer or the Old Issuer as the
context requires.
GENERAL
The Capital Securities (including the Old Capital Securities and the New
Capital Securities) will be limited to $70,000,000 aggregate Liquidation Amount
at any one time outstanding. The Capital Securities will rank pari passu, and
payments will be made thereon pro rata, with the Common Securities except as
described under "-- Subordination of Common Securities." Legal title to the
Subordinated Debentures will be held by the Property Trustee in trust for the
benefit of the holders of the Capital Securities and Common Securities. The
Guarantee will be a guarantee on a subordinated basis with respect to the
Capital Securities but will not guarantee payment of Distributions or amounts
payable on redemption or liquidation of such Capital Securities when the Issuer
does not have funds on hand available to make such payments. See "Description of
Guarantee."
DISTRIBUTIONS
The Capital Securities represent preferred undivided beneficial interests
in the assets of the Issuer and Distributions on each Capital Security will be
payable at the annual rate of 8.92% of the stated Liquidation Amount of $1,000,
payable semi-annually in arrears on January 15 and July 15 of each year (each a
"Distribution Date"), to the holders of the Capital Securities at the close of
business on the fifteenth day (whether or not a Business Day (as defined below))
next preceding the relevant Distribution Date. Distributions on the Capital
Securities will be cumulative. Distributions will accumulate from January 29,
1997. The first Distribution Date for the Capital Securities will be July 15,
1997. The amount of Distributions payable for any period less than a full
Distribution period will be computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in such period.
Distributions payable for each full Distribution period will be computed by
dividing the rate per annum by two. If any date on which Distributions are
payable on the Capital Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day that
is a Business Day (without any additional Distributions or other payment in
respect of any such delay), with the same force and effect as if made on the
date such payment was originally payable.
So long as no Debenture Event of Default (as defined in the Indenture) has
occurred and is continuing, the Corporation has the right under the Indenture to
defer the payment of interest on the Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the Subordinated Debentures. As a consequence of
any such election, semi-annual Distributions on the Capital Securities will be
deferred by the Issuer during any such Extension Period. Distributions to which
holders of the Capital Securities are entitled will accumulate additional
Distributions thereon at the rate per annum of 8.92% thereof, compounded
semi-annually from the relevant payment date for such Distributions, computed on
the basis of a 360-day year of twelve 30-day months and the actual days elapsed
in a partial month in such period. Additional Distributions payable for each
full Distribution period will be computed by dividing the rate per annum by two.
The term "Distributions" as used herein shall include any such additional
Distributions. During any such Extension Period, the Corporation may not (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Corporation's capital
stock or (ii) make any payment of principal of or interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Corporation that
rank pari passu in all respects with or junior in interest to the Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Corporation in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or stockholder
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<PAGE> 48
stock purchase plan or in connection with the issuance of capital stock of the
Corporation (or securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered into prior to the
applicable Extension Period, (b) as a result of an exchange or conversion of any
class or series of the Corporation's capital stock (or any capital stock of a
subsidiary of the Corporation) for any class or series of the Corporation's
capital stock or of any class or series of the Corporation's indebtedness for
any class or series of the Corporation's capital stock, (c) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection
with any stockholder rights plan, or the issuance of rights, stock or other
property under any stockholder rights plan, or the redemption or repurchase of
rights pursuant thereto, or (e) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior to such
stock). Prior to the termination of any such Extension Period, the Corporation
may further defer the payment of interest, provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the Subordinated Debentures. Upon the termination of any such Extension
Period and the payment of all amounts then due, the Corporation may elect to
begin a new Extension Period. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period. See "Description of
Subordinated Debentures -- Option To Extend Interest Payment Period" and
"Certain Federal Income Tax Consequences -- Interest Income and Original Issue
Discount."
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures.
The revenue of the Issuer available for distribution to holders of the
Capital Securities will be limited to payments under the Subordinated
Debentures. If the Corporation does not make payments on the Subordinated
Debentures, the Issuer may not have funds available to pay Distributions or
other amounts payable on the Capital Securities. The payment of Distributions
and other amounts payable on the Capital Securities (if and to the extent the
Issuer has funds legally available for and cash sufficient to make such
payments) is guaranteed by the Corporation on a limited basis as set forth
herein under "Description of Guarantee."
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Subordinated
Debentures, whether at Stated Maturity or upon earlier redemption as provided in
the Indenture, the proceeds from such repayment or redemption shall be applied
by the Property Trustee to redeem a Like Amount (as defined below) of the
Capital Securities, upon not less than 30 nor more than 60 days' notice, at a
redemption price (the "Redemption Price") equal to the aggregate Liquidation
Amount of such Capital Securities plus accumulated but unpaid Distributions
thereon to the date of redemption (the "Redemption Date") and the related amount
of the premium, if any, paid by the Corporation upon the concurrent redemption
of such Subordinated Debentures. See "Description of Subordinated
Debentures -- Redemption." If less than all of the Subordinated Debentures are
to be repaid or redeemed on a Redemption Date, then the proceeds from such
repayment or redemption shall be allocated to the redemption pro rata of the
Capital Securities and the Common Securities. The amount of premium, if any,
paid by the Corporation upon the redemption of all or any part of the
Subordinated Debentures to be repaid or redeemed on a Redemption Date shall be
allocated to the redemption pro rata of the Capital Securities and the Common
Securities.
The Corporation has the right to redeem the Subordinated Debentures (i) on
or after January 29, 2007, in whole at any time or in part from time to time, or
(ii) in whole (but not in part) at any time within 90 days following the
occurrence and during the continuation of a Tax Event, Investment Company Event
or Capital Treatment Event (each as defined below). A redemption of the
Subordinated Debentures would cause a mandatory redemption of a Like Amount of
the Capital Securities and Common Securities.
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<PAGE> 49
The Redemption Price, in the case of a redemption under (i) above, shall
equal the following prices, expressed in percentages of the Liquidation Amount
(as defined below), together with accumulated Distributions to but excluding the
date fixed for redemption, if redeemed during the 12-month period beginning
January 29:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ---- ----------
<S> <C>
2007........................................................ 104.460%
2008........................................................ 104.014
2009........................................................ 103.568
2010........................................................ 103.122
2011........................................................ 102.676
2012........................................................ 102.230
2013........................................................ 101.784
2014........................................................ 101.338
2015........................................................ 100.892
2016........................................................ 100.446
</TABLE>
and at 100% on or after January 29, 2017.
The Redemption Price, in the case of a redemption prior to January 29, 2007
following a Tax Event, Investment Company Event or Capital Treatment Event as
described under (ii) above, will equal for each Capital Security the Make-Whole
Amount for a corresponding $1,000 principal amount of Subordinated Debentures
together with accumulated Distributions to but excluding the date fixed for
redemption. The "Make-Whole Amount" will be equal to the greater of (i) 100% of
the principal amount of such Subordinated Debentures or (ii) as determined by a
Quotation Agent (as defined below), the sum of the present values of the
principal amount and premium payable as part of the Redemption Price with
respect to an optional redemption of such Subordinated Debentures on January 29,
2007, together with the present values of scheduled payments of interest from
the Redemption Date to January 29, 2007 (the "Remaining Life"), in each case
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of 30-day months) at the Adjusted Treasury Rate.
"Adjusted Treasury Rate" means, with respect to any Redemption Date, the
Treasury Rate plus (i) 2.00% if such Redemption Date occurs on or before January
29, 1998 or (ii) 1.50% if such Redemption Date occurs after January 29, 1998.
"Treasury Rate" means (i) the yield, under the heading which represents the
average for the week immediately prior to the calculation date, appearing in the
most recently published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in the City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the Debenture
Trustee is closed for business.
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<PAGE> 50
"Comparable Treasury Issue" means with respect to any Redemption Date the
United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after January 29, 2007, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Quotation Agent" means Bear, Stearns & Co. Inc. and its successors;
provided, however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Corporation shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Corporation.
"Comparable Treasury Price" means (A) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (B) if the Debenture
Trustee obtains fewer than five such Reference Treasury Dealer Quotations, the
average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount (as defined below) equal to that
portion of the principal amount of Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and (ii) with respect to a distribution of
Subordinated Debentures to holders of Trust Securities in connection with a
dissolution or liquidation of the Issuer, Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Subordinated Debentures are distributed.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Tax Event" means the receipt by the Issuer of an opinion of counsel to the
Corporation experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Old Capital Securities, there is more than an insubstantial risk that (i)
the Issuer is, or will be within 90 days of the delivery of such opinion,
subject to United States federal income tax with respect to income received or
accrued on the Subordinated Debentures, (ii) interest payable by the Corporation
on the Subordinated Debentures is not, or within 90 days of the delivery of such
opinion, will not be, deductible by the Corporation, in whole or in part, for
United States federal income tax purposes or (iii) the Issuer is, or will be
within 90 days of the delivery of such opinion, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the Issuer of an opinion of
counsel to the Corporation experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or a written change
(including any announced prospective 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 Issuer
is or will be considered an "investment company" that is required to be
registered under the Investment Company Act, which change or prospective change
becomes effective or would become effective, as the case may be, on or after the
date of the issuance of the Capital Securities.
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<PAGE> 51
"Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Old
Capital Securities, there is more than an insubstantial risk that the
Corporation will not be entitled to treat an amount equal to the Liquidation
Amount of the Capital Securities as "Tier 1 Capital" (or the then equivalent
thereof) for purposes of the capital adequacy guidelines of the Federal Reserve,
as then in effect and applicable to the Corporation.
Payment of Additional Sums. If a Tax Event described in clause (i) or
(iii) of the definition of Tax Event above has occurred and is continuing and
the Issuer is the holder of all of the Subordinated Debentures, the Corporation
will pay Additional Sums (as defined below), if any, on the Subordinated
Debentures.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by the Issuer on the
outstanding Capital Securities and Common Securities of the Issuer will not be
reduced as a result of any additional taxes, duties and other governmental
charges to which the Issuer has become subject as a result of a Tax Event.
REDEMPTION PROCEDURES
Capital Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Subordinated Debentures. Redemptions of the Capital Securities
shall be made and the Redemption Price shall be payable on each Redemption Date
only to the extent that the Issuer has funds on hand available for the payment
of such Redemption Price. See also "-- Subordination of Common Securities."
If the Issuer gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, in the case of Capital Securities held in
book-entry form, the Property Trustee will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Capital Securities. With respect to Capital Securities not held in book-entry
form, the Property Trustee, to the extent funds are available, will irrevocably
deposit with the paying agent for the Capital Securities funds sufficient to pay
the applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing the Capital Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Capital Securities called for redemption shall be
payable to the holders of the Capital 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 the holders of such Capital Securities so called for redemption will
cease, except the right of the holders of such Capital Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Capital Securities will cease to be outstanding. If any date fixed for
redemption of Capital Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
which is a Business Day (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day. In the
event that payment of the Redemption Price in respect of Capital Securities
called for redemption is improperly withheld or refused and not paid either by
the Issuer or by the Corporation pursuant to the Guarantee as described under
"Description of Guarantee," Distributions on such Capital Securities will
continue to accumulate at the then applicable rate, from the Redemption Date
originally established by the Issuer for such Capital Securities to the date
such Redemption Price is actually paid, in which case the actual payment date
will be the date fixed for redemption for purposes of calculating the Redemption
Price.
Subject to applicable law (including, without limitation, United States
federal securities laws), the Corporation or its subsidiaries may at any time
and from time to time purchase outstanding Capital Securities by tender, in the
open market or by private agreement.
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<PAGE> 52
If less than all of the Capital Securities and Common Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of such
Capital Securities and Common Securities to be redeemed shall be allocated pro
rata to the Capital Securities and the Common Securities based upon the relative
Liquidation Amounts of such classes. The particular Capital Securities to be
redeemed shall be selected on a pro rata basis not more than 60 days prior to
the Redemption Date by the Property Trustee from the outstanding Capital
Securities not previously called for redemption, or if the Capital Securities
are then held in the form of a Global Capital Security (as defined below), in
accordance with DTC's customary procedures, provided, in each case, that each
holder of any Capital Securities has at least 100 Capital Securities remaining
after the redemption. The Property Trustee shall promptly notify the securities
registrar for the Trust Securities in writing of the Capital Securities selected
for redemption and, in the case of any Capital Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
the Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate, in the case of
any Capital Securities redeemed or to be redeemed only in part, to the portion
of the aggregate Liquidation Amount of Capital Securities which has been or is
to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each registered holder of Capital
Securities to be redeemed at its address appearing on the securities register
for the Trust Securities. Unless the Corporation defaults in payment of the
Redemption Price on the Subordinated Debentures, on and after the Redemption
Date interest will cease to accrue on the Subordinated Debentures or portions
thereof (and, unless payment of the Redemption Price in respect of the Capital
Securities is withheld or refused and not paid either by the Issuer or the
Corporation pursuant to the Guarantee, Distributions will cease to accumulate on
the Capital Securities or portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities, as applicable, shall be made pro rata based on
the Liquidation Amount of such Capital Securities and Common Securities.
However, if on any Distribution Date or Redemption Date a Debenture Event of
Default has occurred and is continuing as a result of any failure by the
Corporation to pay any amounts in respect of the Subordinated Debentures when
due, no payment of any Distribution on, or Redemption Price of, any of the
Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all of
the outstanding Capital Securities for all Distribution periods terminating on
or prior thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all of the outstanding Capital Securities
then called for redemption, shall have been made or provided for, and all funds
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions on, or Redemption Price of, the Capital Securities
then due and payable.
In the case of any Event of Default (as defined below) resulting from a
Debenture Event of Default, the holders of the Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default under
the Trust Agreement until the effect of all such Events of Default with respect
to such Capital Securities have been cured, waived or otherwise eliminated. See
"-- Events of Default; Notice" and "Description of Subordinated
Debentures -- Debenture Events of Default." Until all such Events of Default
under the Trust Agreement with respect to the Capital Securities have been so
cured, waived or otherwise eliminated, the Property Trustee will act solely on
behalf of the holders of the Capital Securities and not on behalf of the holders
of the Common Securities, and only the holders of the Capital Securities will
have the right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
The amount payable on the Capital Securities in the event of any
liquidation of the Issuer is $1,000 per Capital Security plus accumulated and
unpaid Distributions, subject to certain exceptions, which may be in the form of
a distribution of such amount in Subordinated Debentures.
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<PAGE> 53
The holder of all of the outstanding Common Securities (i.e., the
Corporation) has the right at any time to dissolve the Issuer and, after
satisfaction of liabilities to creditors of the Issuer as provided by applicable
law, cause the Subordinated Debentures to be distributed to the holders of the
Capital Securities and Common Securities in liquidation of the Issuer. The
Corporation has committed to the Federal Reserve that, so long as the
Corporation (or an affiliate) is a holder of Common Securities, it will not
exercise such right without having received the prior approval of the Federal
Reserve to do so, if then required under applicable Federal Reserve capital
guidelines or policies.
Pursuant to the Trust Agreement, the Issuer will automatically dissolve,
and its affairs wound up, upon expiration of its term or, if earlier, will
dissolve on the first to occur of: (i) certain events of bankruptcy, dissolution
or liquidation of the Corporation; (ii) the distribution of a Like Amount of the
Subordinated Debentures to the holders of the Trust Securities, if the holders
of Common Securities have given written direction to the Property Trustee to
dissolve the Issuer (which direction, subject to the foregoing restrictions, is
optional and wholly within the discretion of the holders of Common Securities);
(iii) redemption of all of the Trust Securities as described under
"-- Redemption" and (iv) the entry of an order for the dissolution of the Issuer
by a court of competent jurisdiction.
If dissolution of the Issuer occurs as described in clause (i) , (ii) or
(iv) above, the Issuer will be liquidated by the Property Trustee as
expeditiously as the Property Trustee determines to be possible by distributing,
after satisfaction of liabilities to creditors of the Issuer as provided by
applicable law, to the holders of such Trust Securities a Like Amount of the
Subordinated Debentures, unless such distribution is determined by the Property
Trustee not to be practical, in which event such holders will be entitled to
receive out of the assets of the Issuer available for distribution to holders,
after satisfaction of liabilities to creditors of the Issuer as provided by
applicable law, an amount equal to, in the case of holders of Capital
Securities, the aggregate of the Liquidation Amount plus accumulated 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 Issuer has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Issuer on its Capital Securities shall be paid on a pro rata basis. The holders
of the Common Securities will be entitled to receive distributions upon any such
liquidation pro rata with the holders of the Capital Securities, except that if
a Debenture Event of Default has occurred and is continuing as a result of any
failure by the Corporation to pay any amounts in respect of the Subordinated
Debentures when due, the Capital Securities shall have a priority over the
Common Securities.
After the liquidation date fixed for any distribution of Subordinated
Debentures (i) the Capital Securities will no longer be deemed to be
outstanding, (ii) DTC or its nominee, as the registered holder of the Capital
Securities, will receive a registered global certificate or certificates
representing the Subordinated Debentures to be delivered upon such distribution
with respect to Capital Securities held by DTC or its nominee and (iii) any
certificates representing the Capital Securities not held by DTC or its nominee
will be deemed to represent the Subordinated Debentures having a principal
amount equal to the stated Liquidation Amount of the Capital Securities and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on the Capital Securities until such certificates are
presented to the security registrar for the Trust Securities for transfer or
reissuance.
If the Corporation does not redeem the Subordinated Debentures prior to
maturity and the Issuer is not liquidated and the Subordinated Debentures are
not distributed to holders of the Capital Securities, the Capital Securities
will remain outstanding until the repayment of the Subordinated Debentures and
the distribution of the Liquidation Distribution to the holders of the Capital
Securities.
There can be no assurance as to the market prices for the Capital
Securities or the Subordinated Debentures that may be distributed in exchange
for Capital Securities if a dissolution and liquidation of the Issuer were to
occur. Accordingly, the Capital Securities that an investor may acquire, or the
Subordinated Debentures that the investor may receive on dissolution and
liquidation of the Issuer, may trade at a discount to the price that the
investor paid to purchase the Capital Securities offered hereby.
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EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under the
Trust Agreement (an "Event of Default") with respect to the Capital Securities
(whatever the reason for such Event of Default and whether it is 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 a Debenture Event of Default (see "Description
of Subordinated Debentures -- Debenture Events of Default"); or
(ii) default by the Issuer 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 Issuer 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, in any material respect,
of any covenant or warranty of the Issuer Trustees in the Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the Issuer Trustees and
the Corporation by the holders of at least 25% in aggregate Liquidation
Amount of the outstanding Capital Securities, a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" under the Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee if a successor Property Trustee has not
been appointed within 90 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of Trust Securities, the
Administrative Trustees and the Corporation, unless such Event of Default has
been cured or waived. The Corporation, as Depositor, and the Administrative
Trustees are required to file annually with the Property Trustee a certificate
as to whether or not they are in compliance with all the conditions and
covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing as a result
of any failure by the Corporation to pay any amounts in respect of the
Subordinated Debentures when due, the Capital Securities will have a preference
over the Common Securities with respect to payments of any amounts in respect of
the Capital Securities as described above. See "-- Subordination of Common
Securities," "-- Liquidation Distribution Upon Dissolution" and "Description of
Subordinated Debentures -- Debenture Events of Default."
The existence of an Event of Default does not entitle the holders of
Capital Securities to accelerate the maturity thereof.
REMOVAL OF ISSUER TRUSTEES; APPOINTMENT OF SUCCESSORS
Unless a Debenture Event of Default has occurred and is continuing, any
Issuer Trustee may be removed at any time by the holder of all the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the holder of all the Common Securities.
No resignation or removal of an Issuer Trustee and no appointment of a successor
trustee will be effective until the acceptance of appointment by the successor
trustee in accordance with the provisions of the Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal standards of the Trust
Indenture Act or of any jurisdiction in which any part of the assets of the
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Issuer may at the time be located, the Property Trustee shall have power to
appoint one or more persons either to act as a co-trustee, jointly with the
Property Trustee, of all or any part of such assets, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the Trust Agreement.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any entity into which the Property Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which such Issuer
Trustee is a party, or any entity succeeding to all or substantially all the
corporate trust business of such Issuer Trustee, will be the successor of such
Issuer Trustee under the Trust Agreement, provided such entity is otherwise
qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER
The Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any entity, except as described below or as
otherwise set forth in the Trust Agreement. The Issuer may, at the request of
the holders of the Common Securities (i.e., the Corporation) and with the
consent of the Administrative Trustees, but without the consent of the holders
of the outstanding Capital Securities, merge with or into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the laws
of any State, so long as (i) such successor entity either (a) expressly assumes
all of the obligations of the Issuer with respect to the Capital Securities or
(b) substitutes for the Capital Securities other securities having substantially
the same terms as the Capital Securities (the "Successor Securities") so long as
the Successor Securities have the same priority as the Capital Securities with
respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) a trustee of such successor entity, possessing the same powers
and duties as the Property Trustee, is appointed to hold the Subordinated
Debentures, (iii) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Capital Securities (including
any Successor Securities) in any material respect, (v) such successor entity has
a purpose substantially identical to that of the Issuer, (vi) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Issuer has received an opinion from independent counsel experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Capital Securities (including
any Successor Securities) in any material respect and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Issuer nor such successor entity will be required to register as an
investment company under the Investment Company Act, and (vii) the Corporation
or any permitted successor or assignee owns all of the common securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Issuer may not, except with the consent of
holders of 100% in aggregate Liquidation Amount of the Capital Securities,
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
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer or the successor entity to
be taxable as a corporation or as other than a grantor trust for United States
federal income tax purposes.
The Exchange Offer will not be prohibited by the foregoing provisions.
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VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "-- Removal of Issuer Trustees;
Appointment of Successors" and "Description of Guarantee -- Amendments and
Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Capital Securities will have no voting rights.
The Trust Agreement may be amended from time to time by the holders of a
majority of the Common Securities and the Issuer Trustees, without the consent
of the holders of the Capital Securities (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement, which are not inconsistent with the
other provisions of the Trust Agreement, provided that any such amendment does
not adversely affect in any material respect the interests of any holder of
Trust Securities, or (ii) to modify, eliminate or add to any provisions of the
Trust Agreement to such extent as may be necessary to ensure that the Issuer
Trust will not be taxable as a corporation or as other than a grantor trust for
United States federal income tax purposes at any time that any Trust Securities
are outstanding or to ensure that the Issuer will not be required to register as
an "investment company" under the Investment Company Act, provided that any such
amendment does not adversely affect in any material respect the interests of any
holder of Trust Securities. Any amendments of the Trust Agreement pursuant to
the foregoing sentence will become effective when notice of such amendment is
given to the holders of Trust Securities. The Trust Agreement may be amended by
the holders of a majority of the Common Securities and the Issuer Trustees with
(i) the consent of holders representing not less than a majority in aggregate
Liquidation Amount of the outstanding Capital Securities and (ii) receipt by the
Issuer Trustees of an opinion of counsel to the effect that such amendment or
the exercise of any power granted to the Issuer Trustees in accordance with such
amendment will not cause the Issuer Trust to be taxable as a corporation or as
other than a grantor trust for United States federal income tax purposes or the
Issuer's exemption from status as an "investment company" under the Investment
Company Act. Without the consent of each holder of Trust Securities, the Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Subordinated Debentures are held by the Issuer, the Property
Trustee will not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or execute any
trust or power conferred on the Property Trustee with respect to the
Subordinated Debentures, (ii) waive any past default that is waivable under
Section 513 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the Subordinated Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Subordinated Debentures, where such consent shall be required, without, in each
case, obtaining the prior approval of the holders of at least a majority in
aggregate Liquidation Amount of the outstanding Capital Securities, except that
if a consent under the Indenture would require the consent of each holder of
Subordinated Debentures affected thereby, no such consent will be given by the
Property Trustee without the prior consent of each holder of the Capital
Securities. The Property Trustee may not revoke any action previously authorized
or approved by a vote of the holders of the Capital Securities except by
subsequent vote of the holders of the Capital Securities. The Property Trustee
will notify each holder of Capital Securities of any notice of default with
respect to the Subordinated Debentures. In addition to obtaining the foregoing
approvals of the holders of the Capital Securities, before taking any of the
foregoing actions, the Property Trustee will obtain an opinion of counsel
experienced in such matters to the effect that the Issuer Trust will not be
taxable as a corporation or as other than a grantor trust for United States
federal income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given at a
meeting of holders of Capital Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given to
each registered holder of Capital Securities in the manner set forth in the
Trust Agreement.
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No vote or consent of the holders of Capital Securities will be required to
redeem and cancel Capital Securities in accordance with the Trust Agreement.
Notwithstanding that holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Corporation, the Issuer Trustees or any
affiliate of the Corporation or any Issuer Trustee, will, for purposes of such
vote or consent, be treated as if they were not outstanding.
BOOK ENTRY, DELIVERY AND FORM
The Capital Securities will be issued in fully registered form in minimum
blocks of at least 100 (representing a minimum of $100,000 aggregate Liquidation
Amount) and the Capital Securities must at all times be held in blocks of at
least 100.
Global Capital Security; Book-Entry Form. New Capital Securities initially
will be evidenced by a global Capital Security (the "Global Capital Security")
which will be deposited with, or on behalf of, DTC and registered in the name of
Cede & Co. ("Cede") as DTC's nominee. Except as set forth below, record
ownership of the Global Capital Security may be transferred, in whole or in
part, only to another nominee of DTC or to a successor of DTC or its nominee.
DTC holds securities for its participating organizations ("Participants").
Transfers between Participants will be effected in the ordinary way in
accordance with DTC rules and will be settled in same-day funds.
Access to DTC's system is also available to other entities such as banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). Persons who are not Participants may
beneficially own securities held by or on behalf of DTC only through
Participants or the Indirect Participants. The ownership interest and transfer
of ownership interest of each actual purchaser of each security held by or on
behalf of DTC are recorded on the records of the Participants and Indirect
Participants.
Depositary Procedures. Payment of Distributions on, and the Redemption
Price of, the Global Capital Security will be made to Cede, the nominee for DTC,
as the registered holder of the Global Capital Security, by wire transfer of
immediately available funds on each Distribution Date or Redemption Date.
Neither the Corporation nor the Issuer Trustees (or any Administrator,
securities registrar, paying agent or exchange agent under the Trust Agreement)
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the Global
Capital Security, for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests or for the performance by DTC or its
Participants or Indirect Participants of their respective obligations under the
rules and procedures governing their operations.
The Corporation and the Issuer have been informed by DTC that, with respect
to any payment of Distributions on, or the Redemption Price of, the Global
Capital Security, DTC's practice is to credit Participants' accounts on the
payment date therefor with payments in amounts proportionate to their respective
beneficial interests in the Capital Securities represented by the Global Capital
Security, as shown on the records of DTC (adjusted as necessary so that such
payments are made with respect to whole Capital Securities only), unless DTC has
reason to believe that it will not receive payment on such payment date.
Payments by Participants to owners of beneficial interests in Capital Securities
represented by the Global Capital Security held through such Participants will
be the responsibility of such Participants, as is the case with securities held
for the accounts of customers registered in "street name."
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest in Capital Securities represented by the Global
Capital Security to pledge such interest to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interest, may be affected by the lack of a physical certificate evidencing such
interest. Furthermore, the laws of some states require that certain persons take
physical delivery of securities in definitive form. Consequently, the ability to
transfer beneficial interests in the Global Capital Security to such persons may
be limited.
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DTC has advised the Corporation and the Issuer that it will take any action
permitted to be taken by a holder of Capital Securities only at the direction of
one or more Participants to whose account with DTC interests in the Global
Capital Security are credited and only in respect of the aggregate Liquidation
Amount of the Capital Securities represented by the Global Capital Security as
to which such Participant or Participants has or have given such direction.
DTC has advised the Corporation and the Issuer as follows: DTC is a limited
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its Participants and to facilitate the clearance and
settlement of securities transactions between Participants through electronic
book entry changes to accounts of its Participants, thereby eliminating the need
for physical movement of certificates. Participants include securities brokers
and dealers, banks, trust companies and clearing corporations and may include
certain other organizations such as the Initial Purchasers. Certain of such
Participants (or their representatives), together with other entities, own DTC.
Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies that clear through, or maintain a custodial
relationship with a Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Capital Security among Participants of DTC,
it is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. The Global Capital Security is
not exchangeable for definitive Capital Securities in registered certificated
form unless (i) DTC advises the Corporation and the Property Trustee that it is
no longer willing or able to properly discharge its responsibilities with
respect to the Global Capital Security, and the Property Trustee is unable to
locate a qualified successor, (ii) the Issuer at its option advises DTC in
writing that it elects to terminate the book-entry system through DTC, or (iii)
after the occurrence of a Debenture Event of Default. In all cases, certificated
Capital Securities delivered in exchange for any Global Capital Security or
beneficial interests therein will be registered in the names, and issued in any
approved denominations, requested by or on behalf of DTC (in accordance with its
customary procedures).
So long as DTC or its nominee is the registered holder of the Global
Capital Security, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Capital Securities represented by the Global
Capital Security for all purposes under the Trust Agreement. Except as provided
above, owners of beneficial interests in the Global Capital Security will not be
entitled to have any of the individual Capital Securities represented by the
Global Capital Security registered in their names, will not receive or be
entitled to receive physical delivery of any such Capital Securities in
definitive form and will not be considered the owners or holders thereof under
the Trust Agreement.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities will be made to DTC, which
will credit the relevant accounts at DTC on the applicable Distribution Dates
or, if the Capital Securities are not held by DTC, such payments will be made by
check mailed to the address of the holder entitled thereto as such address
appears on the securities register for the Trust Securities. The paying agent
(the "Paying Agent") will initially be the Property Trustee and any co-paying
agent chosen by the Property Trustee and acceptable to the Administrative
Trustees. The Paying Agent will be permitted to resign as Paying Agent upon 30
days' written notice to the Property Trustee and the Administrative Trustees. If
the Property Trustee is no longer the Paying Agent, the Administrative Trustees
will appoint a successor (which must be a bank or trust company reasonably
acceptable to the Corporation) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Capital Securities.
Registration of transfers of Capital Securities will be effected without
charge by or on behalf of the Issuer, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer
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or exchange. The Issuer will not be required to register or cause to be
registered the transfer of the Capital Securities after the Capital Securities
have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such Event of Default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by the
Trust Agreement at the request of any holder of Capital Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. If no Event of Default has occurred and is continuing
and the Property Trustee is required to decide between alternative courses of
action, or construe ambiguous provisions in the Trust Agreement, or is unsure of
the application of any provision of the Trust Agreement, and the matter is not
one on which holders of Trust Securities are entitled under the Trust Agreement
to vote, then the Property Trustee will take such action as it deems advisable
and in the best interests of the holders of the Trust Securities and will have
no liability except for its own bad faith, negligence or willful misconduct.
For information concerning the relationships between Wilmington Trust
Company, the Property Trustee, and the Corporation, see "Description of
Subordinated Debentures -- Information Concerning the Debenture Trustee."
MISCELLANEOUS
The Administrative Trustees and the Property Trustee are authorized and
directed to conduct the affairs of and to operate the Issuer in such a way that
the Issuer will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or taxable as a corporation or as
other than a grantor trust for United States federal income tax purposes and so
that the Subordinated Debentures will be treated as indebtedness of the
Corporation for United States federal income tax purposes. In this connection,
the Property Trustee and the Administrative Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust of the
Issuer or the Trust Agreement, that the Property Trustee and the Administrative
Trustees determine in their discretion to be necessary or desirable for such
purposes, as long as such action does not materially adversely affect the
interests of the holders of the Capital Securities.
Holders of the Capital Securities have no preemptive or similar rights.
The Issuer may not borrow money or issue debt or mortgage or pledge any of
its assets.
DESCRIPTION OF OLD SECURITIES
The terms of the Old Securities are identical in all material respects to
the New Securities, except that (i) the Old Securities have not been registered
under the Securities Act, are subject to certain restrictions on transfer and
are entitled to certain rights under the Registration Rights Agreement (which
rights will be terminated upon consummation of the Exchange Offer, except under
limited circumstances); (ii) the New Capital Securities will not provide for any
Special Distribution, and (iii) the New Subordinated Debentures will not provide
for any Special Interest. The Old Securities provide that, in the event that the
Exchange Offer is not consummated on or prior to 180 days after January 29,
1997, or, in certain limited circumstances, in the event a shelf registration
statement (the "Shelf Registration Statement") with respect to the resale of the
Old Capital Securities is not declared effective on or prior to 180 days after
January 29, 1997, then Special Interest will accrue (in addition to the interest
rate on the Subordinated Debentures) at the rate of 0.25% per annum on the
principal amount of the Subordinated Debentures and Special Distributions will
accrue (in addition to the stated Distribution rate on the Capital Securities)
at a rate of 0.25% per annum on the Liquidation Amount of the Capital
Securities, for the period from the occurrence of such event until such time as
the Exchange Offer is consummated or any required Shelf Registration Statement
is effective. The New Securities are not, and upon consummation of the Exchange
Offer the Old Securities will not be, entitled to any such additional interest
or distributions. Accordingly, holders
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of Old Capital Securities should review the information set forth under "Risk
Factors -- Certain Consequences of a Failure to Exchange Old Capital Securities"
and "Description of New Securities".
DESCRIPTION OF SUBORDINATED DEBENTURES
The Old Subordinated Debentures were issued, and the New Subordinated
Debentures will be issued as part of the same series as the Old Subordinated
Debentures, pursuant the Indenture, under which Wilmington Trust Company is
acting as Debenture Trustee. The Indenture has been qualified under the Trust
Indenture Act. This summary of certain terms and provisions of the Subordinated
Debentures and the Indenture does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, all the provisions of the
Indenture, including the definitions therein of certain terms, as well as by
reference to the Trust Indenture Act as it applies to the Indenture. Whenever
particular defined terms of the Indenture (as amended or supplemented from time
to time) are referred to herein, such defined terms are incorporated herein by
reference.
GENERAL
Concurrently with the issuance of the Old Capital Securities, the Old
Issuer invested the proceeds thereof, together with the consideration paid by
the Corporation for the Old Common Securities, in the Old Subordinated
Debentures issued by the Corporation. Pursuant to the Exchange Offer, the
Corporation will exchange the Old Subordinated Debentures for the New
Subordinated Debentures as soon as practicable after the date hereof. No Old
Subordinated Debentures will remain outstanding after such exchange. The
material terms of the New Subordinated Debentures are the same as the material
terms of the Old Subordinated Debentures, except that the New Subordinated
Debentures have been registered under the Securities Act and no Special Interest
will be paid on the New Subordinated Debentures. In this section, "Description
of Subordinated Debentures," the term "Issuer" includes the Issuer and the Old
Issuer as the context requires.
The Subordinated Debentures will bear interest, accruing from January 29,
1997, at the annual rate of 8.92% of the principal amount thereof, payable
semi-annually in arrears on January 15 and July 15 of each year (each, an
"Interest Payment Date"), commencing July 15, 1997, to the person in whose name
each Subordinated Debenture is registered at the close of business on the
fifteenth day (whether or not a Business Day) next preceding such Interest
Payment Date. It is anticipated that, until the liquidation, if any, of the
Issuer, each Subordinated Debenture will be held in the name of the Property
Trustee in trust for the benefit of the holders of the Trust Securities. The
amount of interest payable for any period less than a full interest period will
be computed on the basis of a 360-day year of twelve 30-day months and the
actual days elapsed in a partial month in such period. The amount of interest
payable for any full interest period will be computed by dividing the rate per
annum by two. If any date on which interest is payable on the Subordinated
Debentures 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 (without any
interest or other payment in respect of any such delay), with the same force and
effect as if made on the date such payment was originally payable. Accrued
interest that is not paid on the applicable Interest Payment Date will bear
additional interest on the amount thereof (to the extent permitted by law) at
the rate per annum of 8.92%, compounded semi-annually and computed on the basis
of a 360-day year of twelve 30-day months and the actual days elapsed in a
partial month in such period. The amount of additional interest payable for any
full interest period will be computed by dividing the rate per annum by two. The
term "interest" as used herein includes semi-annual interest payments, interest
on semi-annual interest payments not paid on the applicable Interest Payment
Date and Additional Sums (as defined below), as applicable.
The Subordinated Debentures will mature on January 15, 2027.
The Subordinated Debentures will be unsecured and will rank junior and be
subordinate in right of payment to all Senior Indebtedness of the Corporation.
Because the Corporation is a holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary, including its Bank
Subsidiaries, upon such subsidiary's dissolution, winding-up, liquidation or
reorganization or otherwise (and thus the ability of holders of the Subordinated
Debentures to benefit indirectly from such distribution), is subject to the
prior claims of creditors of that subsidiary, except to the extent that the
Corporation may itself be a creditor of that subsidiary and its claims are
recognized. There are various legal limitations on the extent to which certain
of the
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Corporation's subsidiaries may extend credit, pay dividends or otherwise supply
funds to the Corporation or certain of its other subsidiaries. Accordingly, the
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Subordinated Debentures. See "The Colonial BancGroup, Inc." The
Indenture does not limit the incurrence or issuance of other secured or
unsecured debt by the Corporation, including Senior Indebtedness, whether under
the Indenture or any existing or other indenture that the Corporation may enter
into in the future or otherwise. See "-- Subordination."
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Debenture Event of Default has occurred and is continuing,
the Corporation has the right at any time during the term of the Subordinated
Debentures to defer the payment of interest at any time or from time to time for
a period not exceeding 10 consecutive semi-annual periods with respect to each
Extension Period, provided that no Extension Period may extend beyond the Stated
Maturity of the Subordinated Debentures. At the end of such Extension Period,
the Corporation must pay all interest then accrued and unpaid (together with
interest thereon at the annual rate of 8.92%, compounded semi-annually and
computed on the basis of a 360-day year of twelve 30-day months and the actual
days elapsed in a partial month in such period, to the extent permitted by
applicable law). The amount of additional interest payable for any full interest
period will be computed by dividing the rate per annum by two. During an
Extension Period, interest will continue to accrue and holders of Subordinated
Debentures (or holders of Capital Securities while outstanding) will be required
to accrue interest income for United States federal income tax purposes. See
"Certain Federal Income Tax Consequences -- Interest Income and Original Issue
Discount."
During any such Extension Period, the Corporation may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation that rank
pari passu in all respects with or junior in interest to the Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Corporation in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or stockholder stock purchase plan or in connection
with the issuance of capital stock of the Corporation (or securities convertible
into or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Corporation's
capital stock (or any capital stock of a subsidiary of the Corporation) for any
class or series of the Corporation's capital stock or of any class or series of
the Corporation's indebtedness for any class or series of the Corporation's
capital stock, (c) the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any stockholder's rights plan, or
the issuance of rights, stock or other property under any stockholder's rights
plan, or the redemption or repurchase of rights pursuant thereto, or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of
interest, provided that no Extension Period may exceed 10 consecutive semiannual
periods or extend beyond the Stated Maturity of the Subordinated Debentures.
Upon the termination of any such Extension Period and the payment of all amounts
then due, the Corporation may elect to begin a new Extension Period subject to
the above conditions. No interest shall be due and payable during an Extension
Period, except at the end thereof. The Corporation must give the Property
Trustee notice of its election of such Extension Period at least one Business
Day prior to the earlier of (i) the date the Distributions on the Capital
Securities would have been payable but for the election to begin such Extension
Period and (ii) the date the Property Trustee is required to give notice to
holders of the Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date. The Property Trustee will give notice of the Corporation's
election to begin a new Extension Period to the holders of the Capital
Securities. There is no limitation on the number of times that the Corporation
may elect to begin an Extension Period.
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REDEMPTION
The Subordinated Debentures are redeemable prior to maturity at the option
of the Corporation (i) on or after January 29, 2007, in whole at any time or in
part from time to time, or (ii) in whole (but not in part) at any time within 90
days following the occurrence and during the continuation of a Tax Event,
Investment Company Event or Capital Treatment Event (each as defined under
"Description of Capital Securities -- Redemption"), in each case at the
redemption price described below. The proceeds of any such redemption will be
used by the Issuer to redeem the Trust Securities. The Corporation has committed
to the Federal Reserve that the Corporation will not exercise its right to
redeem the Subordinated Debentures prior to the Stated Maturity without having
received the prior approval of the Federal Reserve to do so, if then required
under applicable Federal Reserve capital guidelines or policies.
The Redemption Price for Subordinated Debentures in the case of a
redemption under (i) above shall equal the following prices, expressed in
percentages of the principal amount, together with accrued interest to but
excluding the date fixed for redemption. If redeemed during the 12-month period
beginning January 29:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ---- ----------
<S> <C>
2007........................................................ 104.460%
2008........................................................ 104.014
2009........................................................ 103.568
2010........................................................ 103.122
2011........................................................ 102.676
2012........................................................ 102.230
2013........................................................ 101.784
2014........................................................ 101.338
2015........................................................ 100.892
2016........................................................ 100.446
</TABLE>
and at 100% on or after January 29, 2017.
The Redemption Price for Subordinated Debentures, in the case of a
redemption prior to January 29, 2007, following a Tax Event, Investment Company
Event or Capital Treatment Event, as described under (ii) above, will equal the
Make-Whole Amount (as defined under "Description of New
Securities -- Redemption"), together with accrued interest to but excluding the
date fixed for redemption.
ADDITIONAL SUMS
The Corporation has covenanted in the Indenture that, if and for so long as
(i) the Issuer is the holder of all Subordinated Debentures and (ii) the Issuer
is required to pay any additional taxes, duties or other governmental charges as
a result of a Tax Event, the Corporation will pay as additional sums on the
Subordinated Debentures such amounts as may be required so that the
Distributions payable by the Issuer will not be reduced as a result of any such
additional taxes, duties or other governmental charges. See "Description of New
Securities -- Redemption."
REGISTRATION, DENOMINATION AND TRANSFER
The Subordinated Debentures will initially be registered in the name of the
Property Trustee, as trustee of the Issuer. If the Subordinated Debentures are
distributed to holders of Capital Securities, it is anticipated that the
depositary arrangements for the Subordinated Debentures will be substantially
identical to those in effect for the Capital Securities. See "Description of New
Securities -- Book Entry, Delivery and Form."
Although DTC has agreed to the procedures described above, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time
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<PAGE> 63
unwilling or unable to continue as depositary and a successor depositary is not
appointed by the Corporation within 90 days of receipt of notice from DTC to
such effect, the Corporation will cause the Subordinated Debentures to be issued
in definitive form.
Payments on Subordinated Debentures represented by a global security will
be made to Cede, the nominee for DTC, as the registered holder of the
Subordinated Debentures, as described under "Description of the New
Securities -- Book Entry, Delivery and Form." If Subordinated Debentures are
issued in certificated form, principal and interest will be payable, the
transfer of the Subordinated Debentures will be registrable, and Subordinated
Debentures will be exchangeable for Subordinated Debentures of other authorized
denominations of a like aggregate principal amount, at the corporate trust
office of the Debenture Trustee in Wilmington, Delaware or at the offices of any
Paying Agent or transfer agent appointed by the Corporation, provided that
payment of interest may be made at the option of the Corporation by check mailed
to the address of the persons entitled thereto or by wire transfer.
The Subordinated Debentures will be issuable only in registered form
without coupons in minimum denominations of $100,000 and integral multiples of
$1,000 in excess thereof. Subordinated Debentures will be exchangeable for other
Subordinated Debentures of like tenor, of any authorized denominations, and of a
like aggregate principal amount.
Subordinated Debentures may be presented for exchange as provided above,
and may be presented for registration of transfer (with the form of transfer
endorsed thereon, or a satisfactory written instrument of transfer, duly
executed), at the office of the securities registrar appointed under the
Subordinated Debenture or at the office of any transfer agent designated by the
Corporation for such purpose without service charge and upon payment of any
taxes and other governmental charges as described in the Indenture. The
Corporation will appoint the Debenture Trustee as securities registrar under the
Subordinated Indenture. The Corporation may at any time designate additional
transfer agents with respect to the Subordinated Debentures.
In the event of any redemption, neither the Corporation nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Subordinated Debentures during a period beginning at the opening of business 15
days before the day of selection for redemption of the Subordinated Debentures
to be redeemed and ending at the close of business on the day of mailing of the
relevant notice of redemption or (ii) transfer or exchange any Subordinated
Debentures so selected for redemption, except, in the case of any Subordinated
Debentures being redeemed in part, any portion thereof not to be redeemed.
Any moneys deposited with the Debenture Trustee or any paying agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Corporation, be repaid
to the Corporation and the holder of such Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to the Corporation for
payment thereof.
RESTRICTIONS ON CERTAIN PAYMENTS; CERTAIN COVENANTS OF THE CORPORATION
The Corporation has covenanted that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Corporation's capital stock or
(ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation that rank
pari passu in all respects with or junior in interest to the Subordinated
Debentures (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Corporation in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or stockholder stock purchase plan or in connection
with the issuance of capital stock of the Corporation (or securities convertible
into or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable event, (b) as a result of an
exchange or conversion of any class or series of the Corporation's capital stock
(or any capital stock of a subsidiary of the Corporation) for any class or
series of the Corporation's capital stock or of any class or series of the
Corporation's indebtedness for any class or series of the Corporation's capital
stock, (c) the purchase of fractional interests in shares of the Corporation's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being
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<PAGE> 64
converted or exchanged, (d) any declaration of a dividend in connection with any
stockholder rights plan, or the issuance of rights, stock or other property
under any stockholder rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock), if at
such time (i) there has occurred any event (a) of which the Corporation has
actual knowledge that with the giving of notice or the lapse of time, or both,
would constitute a Debenture Event of Default and (b) that the Corporation has
not taken reasonable steps to cure, (ii) if the Subordinated Debentures are held
by the Issuer, the Corporation is in default with respect to its payment of any
obligations under the Guarantee or (iii) the Corporation has given notice of its
selection of an Extension Period as provided in the Subordinated Indenture and
has not rescinded such notice, or such Extension Period, or any extension
thereof, is continuing.
The Corporation has covenanted in the Indenture (i) to continue to hold,
directly or indirectly, 100% of the Common Securities, provided that certain
successors that are permitted pursuant to the Indenture may succeed to the
Corporation's ownership of the Common Securities, (ii) as holder of the Common
Securities, not to voluntarily terminate, wind-up or liquidate the Issuer, other
than (a) in connection with a distribution of Subordinated Debentures to the
holders of the Capital Securities in liquidation of the Issuer or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the Trust Agreement and (iii) to use its reasonable efforts, consistent with the
terms and provisions of the Trust Agreement, to cause the Issuer to continue not
to be taxable as a corporation for United States federal income tax purposes. In
addition, the Corporation has committed to the Federal Reserve that, so long as
the Corporation is the holder of the Common Securities, the Corporation will not
voluntarily terminate or liquidate the Issuer prior to the Stated Maturity
without having received the prior approval of the Federal Reserve to do so, if
then required under applicable Federal Reserve capital guidelines or policies.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Debenture Trustee may, without
the consent of the holders of the Subordinated Debentures, amend, waive or
supplement the provisions of the Indenture for specified purposes, including,
among other things, curing ambiguities, defects or inconsistencies (provided
that any such action does not materially adversely affect the interests of the
holders of the Subordinated Debentures or the holders of the Capital Securities
so long as they remain outstanding) and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of not less than a majority in principal amount of
the Subordinated Debentures, to modify the Indenture in a manner affecting the
rights of the holders of the Subordinated Debentures, except that no such
modification may, without the consent of the holder of each outstanding
Subordinated Debenture so affected, (i) change the Stated Maturity of the
Subordinated Debentures, or reduce the principal amount thereof, the rate of
interest thereon or any premium payable upon the redemption thereof, or change
the place of payment where, or the currency in which, any such amount is payable
or impair the right to institute suit for the enforcement of any Subordinated
Debenture or (ii) reduce the percentage of principal amount of Subordinated
Debentures, the holders of which are required to consent to any such
modification of the Indenture. Furthermore, so long as any of the Capital
Securities remain outstanding, no such modification may be made that adversely
affects the holders of such Capital Securities in any material respect, and no
termination of the Indenture may occur, and no waiver of any Debenture Event of
Default or compliance with any covenant under the Indenture may be effective,
without the prior consent of the holders of at least a majority of the aggregate
Liquidation Amount of the outstanding Capital Securities unless and until the
principal of (and premium, if any, on) the Subordinated Debentures and all
accrued and unpaid interest thereon have been paid in full and certain other
conditions are satisfied.
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DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Subordinated Debentures that has occurred and is
continuing constitutes an "Event of Default" with respect to the Subordinated
Debentures:
(i) failure for 30 days to pay any interest on the Subordinated
Debentures when due (subject to the deferral of any due date in the case of
an Extension Period); or
(ii) failure to pay any principal of or premium, if any, on the
Subordinated Debentures when due whether at maturity, upon redemption, by
declaration of acceleration or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to the Corporation from the Debenture Trustee or the holders of at least
25% in aggregate outstanding principal amount of the outstanding
Subordinated Debentures; or
(iv) certain events of bankruptcy, insolvency or reorganization of the
Corporation.
For purposes of the Trust Agreement and this Prospectus, each such Event of
Default under the Subordinated Debenture is referred to as a "Debenture Event of
Default." As described in "Description of New Securities -- Events of Default;
Notice," the occurrence of a Debenture Event of Default will also constitute an
Event of Default in respect of the Trust Securities.
The holders of at least a majority in aggregate principal amount of
outstanding Subordinated Debentures have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
principal amount of outstanding Subordinated Debentures may declare the
principal due and payable immediately upon a Debenture Event of Default, and,
should the Debenture Trustee or such holders of Subordinated Debentures fail to
make such declaration, the holders of at least 25% in aggregate Liquidation
Amount of the outstanding Capital Securities shall have such right. The holders
of a majority in aggregate principal amount of outstanding Subordinated
Debentures may annul such declaration and waive the default if all defaults
(other than the non-payment of the principal of Subordinated Debentures which
has become due solely by such acceleration) have been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee. Should the holders
of Subordinated Debentures fail to annul such declaration and waive such
default, the holders of a majority in aggregate Liquidation Amount of the
outstanding Capital Securities shall have such right.
The holders of at least a majority in aggregate principal amount of the
outstanding Subordinated Debentures affected thereby may, on behalf of the
holders of all the Subordinated Debentures, waive any past default, except a
default in the payment of principal (or premium if any) or interest (unless such
default has been cured and a sum sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration has been deposited
with the Debenture Trustee) or a default in respect of a covenant or provision
which under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding Subordinated Debenture. See "-- Modification of
Indenture." The Corporation is required to file annually with the Debenture
Trustee a certificate as to whether or not the Corporation is in compliance with
all the conditions and covenants applicable to it under the Indenture.
If a Debenture Event of Default occurs and is continuing, the Property
Trustee will have the right to declare the principal of and the interest on the
Subordinated Debentures, and any other amounts payable under the Indenture, to
be forthwith due and payable and to enforce its other rights as a creditor with
respect to the Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay any amounts
payable in respect of the Subordinated Debentures on the date such amounts are
otherwise payable, a registered holder of Capital Securities may institute a
legal proceeding directly against the Corporation for enforcement of payment to
such holder of an amount equal to the amount payable in respect
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of Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Capital Securities held by such holder (a "Direct
Action"). The Corporation may not amend the Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of the holders
of all of the Capital Securities. The Corporation has the right under the
Indenture to set-off any payment made to such holder of Capital Securities by
the Corporation in connection with a Direct Action.
The holders of the Capital Securities would not be able to exercise
directly any remedies available to the holders of the Subordinated Debentures
except under the circumstances described in the preceding paragraph. See
"Description of Capital Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Corporation may not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no Person may consolidate
with or merge into the Corporation or convey, transfer or lease its properties
and assets substantially as an entirety to the Corporation, unless (i) if the
Corporation consolidates with or merges into another Person or conveys or
transfers its properties and assets substantially as an entirety to any Person,
the successor Person is organized under the laws of the United States or any
state or the District of Columbia, and such successor Person expressly assumes
the Corporation's obligations in respect of the Subordinated Debentures; (ii)
immediately after giving effect thereto, no Debenture Event of Default, and no
event which, after notice or lapse of time or both, would constitute a Debenture
Event of Default, has occurred and is continuing; and (iii) certain other
conditions as prescribed in the Indenture are satisfied.
The provisions of the Indenture do not afford holders of the Subordinated
Debentures protection in the event of a highly leveraged or other transaction
involving the Corporation that may adversely affect holders of the Subordinated
Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Subordinated
Debentures not previously delivered to the Debenture Trustee for cancellation
(i) have become due and payable or (ii) will become due and payable at the
Stated Maturity within one year, and the Corporation deposits or causes to be
deposited with the Debenture Trustee funds, in trust, for the purpose and in an
amount sufficient to pay and discharge the entire indebtedness on the
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal (and premium, if any) and interest to the date
of the deposit or to the Stated Maturity, as the case may be, then the Indenture
will cease to be of further effect (except as to the Corporation's obligations
to pay all other sums due pursuant to the Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Corporation
will be deemed to have satisfied and discharged the Indenture.
SUBORDINATION
The Subordinated Debentures will be subordinate and junior in right of
payment, to the extent set forth in the Indenture, to all Senior Indebtedness
(as defined below) of the Corporation. If the Corporation defaults in the
payment of any principal, premium, if any, or interest, if any, or any other
amount payable on any Senior Indebtedness when the same becomes due and payable,
whether at maturity or at a date fixed for redemption or by declaration of
acceleration or otherwise, then, unless and until such default has been cured or
waived or has ceased to exist or all Senior Indebtedness has been paid, no
direct or indirect payment (in cash, property, securities, by set-off or
otherwise) may be made or agreed to be made on the Subordinated Debentures, or
in respect of any redemption, repayment, retirement, purchase or other
acquisition of any of the Subordinated Debentures.
As used herein, "Senior Indebtedness" means any obligation of the
Corporation to its creditors, whether now outstanding or subsequently incurred,
other than any obligation as to which, in the instrument creating or evidencing
the obligation or pursuant to which the obligation is outstanding, it is
provided that such obligation is not Senior Indebtedness, but does not include
trade accounts payable and accrued liabilities arising in the ordinary course of
business. Senior Indebtedness includes the Corporation's outstanding
subordinated debt
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securities and any subordinated debt securities issued in the future with
substantially similar subordination terms, but does not include the Subordinated
Debentures or any junior subordinated debt securities issued in the future with
subordination terms substantially similar to those of the Subordinated
Debentures. Substantially all of the existing indebtedness of the Corporation
constitutes Senior Indebtedness. As of December 31, 1996, the amount of Senior
Indebtedness outstanding was $936 million.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Corporation, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Corporation, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Corporation for the benefit of creditors or (iv) any
other marshalling of the assets of the Corporation, all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made on account of the
Subordinated Debentures. In such event, any payment or distribution on account
of the Subordinated Debentures, whether in cash, securities or other property,
that would otherwise (but for the subordination provisions) be payable or
deliverable in respect of the Subordinated Debentures will be paid or delivered
directly to the holders of Senior Indebtedness in accordance with the priorities
then existing among such holders until all Senior Indebtedness (including any
interest thereon accruing after the commencement of any such proceedings) has
been paid in full.
In the event of any such proceeding, after payment in full of all sums
owing with respect to Senior Indebtedness, the holders of Subordinated
Debentures, together with the holders of any obligations of the Corporation
ranking on a parity with the Subordinated Debentures, will be entitled to be
paid from the remaining assets of the Corporation the amounts at the time due
and owing on the Subordinated Debentures and such other obligations before any
payment or other distribution, whether in cash, property or otherwise, will be
made on account of any capital stock or obligations of the Corporation ranking
junior to the Subordinated Debentures and such other obligations. If any payment
or distribution on account of the Subordinated Debentures of any character or
any security, whether in cash, securities or other property is received by any
holder of any Subordinated Debentures in contravention of any of the terms
hereof and before all the Senior Indebtedness has been paid in full, such
payment or distribution or security will be received in trust for the benefit
of, and must be paid over or delivered and transferred to, the holders of the
Senior Indebtedness at the time outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full. By reason of such subordination, in the event of the
insolvency of the Corporation, holders of Senior Indebtedness may receive more,
ratably, and holders of the Subordinated Debentures may receive less, ratably,
than the other creditors of the Corporation. Such subordination will not prevent
the occurrence of any Event of Default in respect of the Subordinated
Debentures.
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Corporation. The Corporation expects
from time to time to incur additional indebtedness constituting Senior
Indebtedness.
GOVERNING LAW
The Indenture and the Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of its obligations under the
Subordinated Debenture, is under no obligation to exercise any of the powers
vested in it by the Indenture at the request of any holder of Subordinated
Debentures, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities that might be incurred thereby. The Debenture
Trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if the Debenture
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
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Wilmington Trust Company, the Debenture Trustee, may serve from time to
time as trustee under other indentures or trust agreements with the Corporation
or its subsidiaries relating to other issues of their securities. In addition,
the Corporation and certain of its affiliates may have other banking
relationships with the Wilmington Trust Company.
DESCRIPTION OF GUARANTEE
The Old Guarantee was entered into by the Corporation concurrently with the
issuance by the Old Issuer of the Old Capital Securities for the benefit of the
holders from time to time of the Old Capital Securities. As soon as practicable
after the date hereof, the Old Guarantee will be exchanged by the Corporation
for the New Guarantee, provided all Old Capital Securities have been exchanged
for New Capital Securities in the Exchange Offer. Otherwise, the Old Guarantee
will apply to any Old Securities which have not been exchanged. The New
Guarantee and the Old Guarantee as they relate to obligations of the Issuer and
the Old Issuer, respectively, are identical in all material respects except that
the New Guarantee has been registered under the Securities Act and qualified
under the Trust Indenture Act. For purposes of this section, "Description of
Guarantee," reference to the "Issuer" includes the Issuer and the Old Issuer as
the context requires. Wilmington Trust Company will act as Guarantee Trustee
under the Guarantee. This summary of certain provisions of the Guarantee does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the Guarantee, including the definitions
therein of certain terms, and the Trust Indenture Act as it relates to the New
Guarantee. The Guarantee Trustee will hold the Guarantee for the benefit of the
holders of the Capital Securities.
GENERAL
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Capital Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert
other than the defense of payment. The following payments with respect to the
Capital Securities, to the extent not paid by or on behalf of the Issuer (the
"Guarantee Payments"), will be subject to the Guarantee: (i) any accumulated and
unpaid Distributions required to be paid on such Capital Securities, to the
extent that the Issuer has funds on hand available therefor at such time, (ii)
the Redemption Price with respect to any Capital Securities called for
redemption, to the extent that the Issuer has funds on hand available therefor
at such time, and (iii) upon a voluntary or involuntary termination, winding-up
or liquidation of the Issuer (unless the Subordinated Debentures are distributed
to holders of the Capital Securities), the lesser of (a) the Liquidation
Distribution, and (b) the amount of assets of the Issuer remaining available for
distribution to holders of the Capital Securities on liquidation of the Issuer.
The Corporation's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Corporation to the holders of the
Capital Securities or by causing the Issuer to pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Issuer's obligations under the Capital Securities, but will apply only to
the extent that the Issuer has funds sufficient to make such payments, and is
not a guarantee of collection.
If the Corporation does not make payments on the Subordinated Debentures
held by the Issuer, the Issuer will not be able to pay any amounts payable in
respect of the Capital Securities and will not have funds legally available
therefor. The Guarantee will rank subordinate and junior in right of payment to
all Senior Indebtedness of the Corporation. See "-- Status of the Guarantee."
Moreover, the Guarantee does not limit the incurrence or issuance of other
secured or unsecured debt of the Corporation, including Senior Indebtedness,
whether under the Indenture, any other indenture that the Corporation may enter
into in the future or otherwise. Moreover, because the Corporation is a holding
company, the right of the Corporation to participate in any distribution of
assets of any subsidiary upon such subsidiary's dissolution, winding-up,
liquidation or reorganization or otherwise is subject to the prior claims of
creditors of that subsidiary, except to the extent that the Corporation may
itself be a creditor of that subsidiary and its claims are recognized. There are
also various legal limitations on the extent to which certain of the
Corporation's subsidiaries may extend credit, pay dividends or otherwise supply
funds to the Corporation or certain of its other subsidiaries. Accordingly, the
Corporation's obligations under the Guarantee
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will be effectively subordinated and junior in right of payment to all existing
and future liabilities of the Corporation's subsidiaries, and claimants under
the Guarantee should look only to the assets of the Corporation for payments
thereunder. See "The Colonial BancGroup, Inc."
The Corporation has, through the Guarantee, the Trust Agreement, the
Subordinated Debentures, the Indenture and the Expense Agreement, taken
together, fully, irrevocably and unconditionally guaranteed all of the Issuer's
obligations under the Capital Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Issuer's obligations in respect of the Capital Securities. See "Relationship
Among the Capital Securities, The Junior Subordinated Debentures, The Guarantee
and The Expense Agreement."
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Corporation in the same manner as the Subordinated
Debentures.
The Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The
Guarantee will be held by the Guarantee Trustee for the benefit of the holders
of the Capital Securities. The Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Issuer
or distribution to the holders of the Capital Securities of the Subordinated
Debentures.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Capital Securities (in which case no vote will be
required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of the
outstanding Capital Securities. The manner of obtaining any such approval will
be as set forth under "Description of the Capital Securities -- Voting Rights;
Amendment of Trust Agreement." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the holders
of the Capital Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Corporation to perform any of its payment or other obligations thereunder, or to
perform any non-payment obligation if such nonpayment default remains unremedied
for 30 days. The holders of not less than a majority in aggregate Liquidation
Amount of the outstanding Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of the Guarantee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under the Guarantee.
Any registered holder of Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Issuer, the
Guarantee Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Corporation in performance of the Guarantee, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after the occurrence of an event of default with respect to the Guarantee, must
exercise the same
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degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by the
Guarantee at the request of any holder of the Capital Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
For information concerning the relationship between Wilmington Trust
Company, the Guarantee Trustee, and the Corporation, see "Description of
Subordinated Debentures -- Information Concerning the Debenture Trustee."
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Capital Securities, upon full
payment of the amounts payable with respect to the Capital Securities upon
liquidation of the Issuer or upon distribution of Subordinated Debentures to the
holders of the Capital Securities. The Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any holder of the
Capital Securities must restore payment of any sums paid under the Capital
Securities or the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to the New Expense Agreement and the Old Expense Agreement entered
into by the Corporation under the Trust Agreement (as amended or supplemented
from time to time, the "Expense Agreement"), the Corporation will irrevocably
and unconditionally guarantee to each person or entity to whom the Issuer or the
Old Issuer becomes indebted or liable, the full payment of any costs, expenses
or liabilities of the Issuer, other than obligations of the Issuer or the Old
Issuer to pay to holders of the Trust Securities the amounts due such holders
pursuant to the terms of the Trust Securities. The New Expense Agreement and the
Old Expense Agreement constitute unsecured obligations of the Corporation and
will rank subordinate and junior in right of payment to all Senior Indebtedness
of the Corporation in the same manner as the Guarantee and the Subordinated
Debentures.
RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE SUBORDINATED DEBENTURES, THE
GUARANTEE AND THE EXPENSE AGREEMENT
The relationship among the New Capital Securities, the New Subordinated
Debentures, the New Guarantee and the New Expense Agreement is the same as the
relationship among the comparable documents respecting the Old Capital
Securities. References in this section to the "Issuer" includes the Issuer and
the Old Issuer as the context requires.
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the Issuer has funds available for such payment) are irrevocably
guaranteed by the Corporation as and to the extent set forth under "Description
of Guarantee." Taken together, the Corporation's obligations under the
Subordinated Debentures, the Indenture, the Trust Agreement, the Expense
Agreement and the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer's obligations in respect of the Capital Securities. If and to the extent
that the Corporation does not make payments on the Subordinated Debentures, the
Issuer will not have sufficient funds to pay Distributions or other amounts due
on the Capital Securities. The Guarantee does not cover payment of amounts
payable with respect to the Capital Securities when the Issuer does not have
sufficient funds to pay such amounts. In such event, the remedy of a holder of
the Capital Securities is to
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institute a legal proceeding directly against the Corporation for enforcement of
payment of the Corporation's obligations under Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Capital Securities held
by such holder.
The obligations of the Corporation under the Subordinated Debentures, the
Guarantee and the Expense Agreement are subordinate and junior in right of
payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments are made when due on the Subordinated Debentures, such
payments will be sufficient to cover Distributions and other payments
distributable on the Capital Securities, primarily because (i) the aggregate
principal amount of the Subordinated Debentures will be equal to the sum of the
aggregate stated Liquidation Amount of the Capital Securities and Common
Securities; (ii) the interest rate and interest and other payment dates on the
Subordinated Debentures will match the Distribution rate, Distribution Dates and
other payment dates for the Capital Securities; (iii) the Corporation will pay
for all and any costs, expenses and liabilities of the Issuer except the
Issuer's obligations to holders of the Trust Securities; and (iv) the Trust
Agreement further provides that the Issuer will not engage in any activity that
is not consistent with the limited purposes of the Issuer.
Notwithstanding anything to the contrary in the Indenture, the Corporation
has the right to set-off any payment it is otherwise required to make thereunder
against and to the extent the Corporation has theretofore made, or is
concurrently on the date of such payment making, a payment under the Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Capital Security may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer or any
other person or entity. See "Description of Guarantee."
A default or event of default under any Senior Indebtedness of the
Corporation would not constitute a default or Event of Default in respect of the
Capital Securities. However, in the event of payment defaults under, or
acceleration of, Senior Indebtedness of the Corporation, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Subordinated Debentures until such Senior Indebtedness has been paid in full
or any payment default thereunder has been cured or waived. See "Description of
Subordinated Debentures -- Subordination."
LIMITED PURPOSE OF ISSUER
The Capital Securities represent preferred undivided beneficial interests
in the assets of the Issuer, and the Issuer exists for the sole purpose of
issuing its Capital Securities and Common Securities and investing the proceeds
thereof in Subordinated Debentures. A principal difference between the rights of
a holder of a Capital Security and a holder of a Subordinated Debenture is that
a holder of a Subordinated Debenture is entitled to receive from the Corporation
payments on Subordinated Debentures held, while a holder of Capital Securities
is entitled to receive Distributions or other amounts distributable with respect
to the Capital Securities from the Issuer (or from the Corporation under the
Guarantee) only if and to the extent the Issuer has funds available for the
payment of such Distributions.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
the Issuer, other than any such termination, winding-up or liquidation involving
the distribution of the Subordinated Debentures, after satisfaction of
liabilities to creditors of the Issuer as required by applicable law, the
holders of the Capital Securities will be entitled to receive, out of assets
held by the Issuer, the Liquidation Distribution in cash. See "Description of
New Securities -- Liquidation Distribution Upon Dissolution." Upon any voluntary
or involuntary liquidation or bankruptcy of the Corporation, the Property
Trustee, as registered holder of the Subordinated Debentures, would be a
subordinated creditor of the Corporation, subordinated and junior in right of
payment to all Senior
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Indebtedness as set forth in the Indenture, but entitled to receive payment in
full of all amounts payable with respect to the Subordinated Debentures before
any stockholders of the Corporation receive payments or distributions. Since the
Corporation is the guarantor under the Guarantee and has agreed under the
Expense Agreement to pay for all costs, expenses and liabilities of the Issuer
(other than the Issuer's obligations to the holders of the Trust Securities),
the positions of a holder of the Capital Securities and a holder of such
Subordinated Debentures relative to other creditors and to stockholders of the
Corporation in the event of liquidation or bankruptcy of the Corporation are
expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of Capital Securities.
This summary only addresses the tax consequences to a person that acquires
Capital Securities on their original issue at their original offering price and
that is (i) an individual citizen or resident of the United States, (ii) a
corporation or partnership organized in or under the laws of the United States
or any state thereof or the District of Columbia or (iii) an estate or trust the
income of which is subject to United States federal income tax regardless of
source (a "United States Person"). This summary does not address all tax
consequences that may be applicable to a United States Person that is a
beneficial owner of Capital Securities, nor does it address the tax consequences
to (i) persons that are not United States Persons, (ii) persons that may be
subject to special treatment under United States federal income tax law, such as
banks, insurance companies, thrift institutions, regulated investment companies,
real estate investment trusts, tax-exempt organizations and dealers in
securities or currencies, (iii) persons that will hold Capital Securities as
part of a position in a "straddle" or as part of a "hedging," "conversion" or
other integrated investment transaction for United States federal income tax
purposes, (iv) persons whose functional currency is not the United States dollar
or (v) persons that do not hold Capital Securities as capital assets.
The statements of law or legal conclusion set forth in this summary
constitute the opinion of Miller, Hamilton, Snider & Odom, L.L.C., counsel to
the Corporation and the Issuer. This summary is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury regulations, Internal Revenue
Service ("IRS") rulings and pronouncements and judicial decisions now in effect,
all of which are subject to change at any time. Such changes may be applied
retroactively in a manner that could cause the tax consequences to vary
substantially from the consequences described below, possibly adversely
affecting a beneficial owner of Capital Securities. In particular, legislation
has been proposed that could adversely affect the Corporation's ability to
deduct interest on the Subordinated Debentures, which may in turn permit the
Corporation to cause a redemption of the Capital Securities. See "-- Possible
Tax Law Changes." The authorities on which this summary is based are subject to
various interpretations, and it is therefore possible that the United States
federal income tax treatment of the purchase, ownership and disposition of
Capital Securities may differ from the treatment described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE UNITED STATES FEDERAL TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF CAPITAL SECURITIES,
AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF THE SUBORDINATED DEBENTURES AND THE ISSUER
In connection with the issuance of the Old Capital Securities, Miller,
Hamilton, Snider & Odom, L.L.C. have rendered their opinion to the effect that,
under then current law and assuming compliance with the terms of the Trust
Agreement, the Issuer will not be taxable as a corporation for United States
federal income tax purposes. As a result, each beneficial owner of Capital
Securities (a "Securityholder") will be required to include in its gross income
its pro rata share of the interest income, including original issue discount
("OID"), paid or accrued with respect to the Subordinated Debentures whether or
not cash is actually distributed to the Securityholders. See "-- Interest Income
and Original Issue Discount."
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INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under recently issued Treasury regulations applicable to debt instruments
issued on or after August 13, 1996 (the "Regulations"), a "remote" contingency
that stated interest will not be timely paid will be ignored in determining
whether a debt instrument is issued with OID. The Corporation believes that the
likelihood of its exercising its option to defer payments of interest is remote.
Based on the foregoing, the Corporation believes that the Subordinated
Debentures will not be considered to be issued with OID at the time of their
original issuance and, accordingly, a Securityholder should include in gross
income such Securityholder's allocable share of interest on the Subordinated
Debentures.
Under the Regulations, if the Corporation exercised its option to defer any
payment of interest, the Subordinated Debentures would at that time be treated
as issued with OID, and all stated interest on the Subordinated Debentures would
thereafter be treated as OID as long as the Subordinated Debentures remained
outstanding. In such event, all of a Securityholder's taxable interest income
with respect to the Subordinated Debentures would be accounted for as OID on an
economic accrual basis regardless of such Securityholder's method of tax
accounting, and actual distributions of stated interest would not be reported as
taxable income. Consequently, a Securityholder would be required to include in
gross income OID even though the Corporation would not make any actual cash
payments during an Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation herein.
Because income on the Capital Securities will constitute interest or OID,
corporate Securityholders will not be entitled to a dividends-received deduction
with respect to any income recognized with respect to the Capital Securities.
Subsequent uses of the term "interest" in this summary include income in
the form of OID.
DISTRIBUTION OF SUBORDINATED DEBENTURES TO SECURITYHOLDERS
Under current law, a distribution by the Issuer of the Subordinated
Debentures as described under the caption "Description of New
Securities -- Liquidation Distribution Upon Termination" will be non-taxable and
will result in the Securityholder receiving directly his or her pro rata share
of the Subordinated Debentures previously held indirectly through the Issuer,
with a holding period and aggregate tax basis equal to the holding period and
aggregate tax basis such Securityholder had in its Capital Securities before
such distribution. If, however, the liquidation of the Issuer were to occur
because the Issuer is subject to United States federal income tax with respect
to income accrued or received on the Subordinated Debentures, the distribution
of Subordinated Debentures to Securityholders by the Issuer would be a taxable
event to the Issuer and each Securityholder, and the Securityholder would
recognize gain or loss as if the Securityholder had exchanged its Capital
Securities for the Subordinated Debentures it received upon the liquidation of
the Issuer. A Securityholder will accrue interest in respect of Subordinated
Debentures received from the Issuer in the manner described above under
"-- Interest Income and Original Issue Discount."
SALES OR REDEMPTIONS OF CAPITAL SECURITIES
A Securityholder that sells (including a redemption for cash) Capital
Securities will recognize gain or loss equal to the difference between its
adjusted tax basis in the Capital Securities and the amount realized on the sale
of such Capital Securities. Assuming that the Corporation does not exercise its
option to defer payment of interest on the Subordinated Debentures, and the
Capital Securities are not considered issued with OID, a Securityholder's
adjusted tax basis in the Capital Securities generally will be its initial
purchase price. If the Subordinated Debentures are deemed to be issued with OID
as a result of the Corporation's deferral of any interest payment, a
Securityholder's tax basis in the Capital Securities generally will be its
initial purchase price, increased by OID previously includable in such
Securityholder's gross income to the date of disposition and decreased by
distributions or other payments received on the Capital Securities since and
including the date of the first Extension Period. Such gain or loss generally
will be a capital gain or loss (except to the extent any amount realized is
treated as a payment of accrued interest with respect to such Securityholder's
pro rata share of the
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Subordinated Debentures required to be included in income) and generally will be
a long-term capital gain or loss if the Capital Securities have been held for
more than one year.
Should the Corporation exercise its option to defer any payment of interest
on the Subordinated Debentures, the Capital Securities may trade at a price that
does not accurately reflect the value of accrued but unpaid interest with
respect to the underlying Subordinated Debentures. In the event of such a
deferral, a Securityholder who disposes of its Capital Securities between record
dates for payments of distributions thereon will be required to include in
income as ordinary income accrued but unpaid interest on the Subordinated
Debentures to the date of disposition as OID, but may not receive the cash
related thereto. However, such Securityholder will add such amount to its
adjusted tax basis in the Capital Securities. To the extent the selling price is
less than the Securityholder's adjusted tax basis, such Securityholder will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes.
Although the matter is not free from doubt, an exchange of Old Capital
Securities for New Capital Securities should not be taxable to Securityholders.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest income paid or accrued on the Capital Securities
held of record by United States Persons (other than corporations and other
exempt Securityholders) will be reported to the IRS. "Backup" withholding at a
rate of 31% will apply to payments of interest to non-exempt United States
Persons unless the Securityholder furnishes its taxpayer identification number
in the manner prescribed in applicable Treasury regulations, certifies that such
number is correct, certifies as to no loss of exemption from backup withholding
and meets certain other conditions.
Payment of the proceeds from the disposition of Capital Securities to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the Securityholder establishes an exemption from
information reporting and backup withholding.
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability, provided the required information is
furnished to the IRS.
It is anticipated that income on the Capital Securities will be reported to
Securityholders on Form 1099 and mailed to Securityholders by January 31
following each calendar year.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill, the revenue portion of
President Clinton's budget proposal, was released. If enacted, the Revenue
Reconciliation Bill would have generally denied interest deductions for interest
on an instrument issued by a corporation that has a maximum term of more than 20
years and that is not shown as indebtedness on the separate balance sheet of the
issuer or, where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a related
instrument that is not shown as indebtedness on the issuer's consolidated
balance sheet. For purposes of determining the weighted average maturity or the
term of an instrument, any right to extend would be treated as exercised. The
above-described provision of the Revenue Reconciliation Bill was proposed to be
effective generally for instruments issued on or after December 7, 1995. If a
similar provision were to apply to the Subordinated Debentures, the Corporation
would be unable to deduct interest on the Subordinated Debentures. However, on
March 29, 1996, the Chairmen of the Senate Finance and House Ways and Means
Committees issued a joint statement to the effect that it was their intention
that the effective date of the President's legislative proposals, if adopted,
will be no earlier than the date of appropriate Congressional action. Under
current law, the Corporation will be able to deduct interest on the Subordinated
Debentures. There can be no assurance, however, that current or future
legislative proposals or final legislation will not affect the ability of the
Corporation to deduct interest on the Subordinated Debentures. Such a change
could give rise to a Tax Event, which may permit
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the Corporation to cause a redemption of the Capital Securities, as described
more fully in this Prospectus under "Description of New
Securities -- Redemption."
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan"), should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an investment
in the Capital Securities. Accordingly, among other factors, the fiduciary
should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA and would be consistent with the documents
and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well
as individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or "disqualified
persons" under the Code ("Parties in Interest") with respect to such Plan. A
violation of these "prohibited transaction" rules may result in an excise tax or
other liabilities under ERISA and/or Section 4975 of the Code for such persons,
unless exemptive relief is available under an applicable statutory or
administrative exemption. Employee benefit plans that are governmental plans (as
defined in Section 3(32) of ERISA), certain church plans (as defined in Section
3(33) of ERISA) and foreign plans (as described in Section 4(b) (5) of ERISA)
are not subject to the requirements of ERISA or Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of the Issuer Trust would be deemed
to be "plan assets" of a Plan for purposes of ERISA and Section 4975 of the Code
if "plan assets" of the Plan were used to acquire an equity interest in the
Issuer and no exception were applicable under the Plan Assets Regulation. An
"equity interest" is defined under the Plan Assets Regulation as any interest in
an entity other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the
assets of the Issuer would not be deemed to be "plan assets" of investing Plans
if, immediately after the most recent acquisition of any equity interest in the
Issuer, less than 25% of the value of each class of equity interests in the
Issuer were held by Plans, other employee benefit plans not subject to ERISA or
Section 4975 of the Code (such as governmental, church and foreign plans), and
entities holding assets deemed to be "plan assets" of any Plan (collectively,
"Benefit Plan Investors"). No assurance can be given that the Issuer is an
entity of the type intended to be described in the Plan Assets Regulation or, if
it is, that the value of the Capital Securities held by Benefit Plan Investors
will be less than 25% of the total value of such Capital Securities at the
completion of the initial offering or thereafter, and no monitoring or other
measures will be taken with respect to the satisfaction of the conditions to
this exception. All of the Common Securities will be purchased and initially
held by the Corporation.
Certain transactions involving the Issuer and/or the Capital Securities
could be deemed to constitute direct or indirect prohibited transactions under
ERISA and Section 4975 of the Code with respect to a Plan if the Capital
Securities were acquired with "plan assets" of such Plan and/or assets of the
Issuer were deemed to be "plan assets" of Plans investing in the Issuer. For
example, if the Corporation is a Party in Interest with respect to an investing
Plan (either directly or by reason of its ownership of a bank or other
subsidiaries), extensions of credit between the Corporation and the Issuer (as
represented by the Subordinated Debentures and the Guarantee) would likely be
prohibited by Section 406(a) (1)(B) of ERISA and Section 4975(c) (1)(B) of the
Code, unless exemptive relief were available under an applicable administrative
exemption (see below).
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief if required for direct or indirect prohibited
transactions that may arise from the purchase or holding of the Capital
Securities if the Capital Securities are acquired directly or indirectly from a
Party in Interest and/or if assets of the Issuer were deemed to be "plan assets"
of Plans investing in the Issuer as described above. Those class exemptions are
PTCE 96-23 (for certain transactions determined by in-house asset managers),
PTCE 95-60
60
<PAGE> 76
(for certain transactions involving insurance company general accounts), PTCE
91-38 (for certain transactions involving bank collective investment funds),
PTCE 90-1 (for certain transactions involving insurance company separate
accounts), and PTCE 84-14 (for certain transactions determined by independent
qualified asset managers).
Because the Capital Securities may be deemed to be equity interests in the
Issuer for purposes of applying ERISA and Section 4975 of the Code, the Capital
Securities may not be purchased or held by any Plan, any entity whose underlying
assets include "plan assets" by reason of any Plan's investment in the entity (a
"Plan Asset Entity") or any person investing "plan assets" of any Plan, unless
such purchaser or holder is eligible for the exemptive relief available under
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable exemption. Any
purchaser or holder of the Capital Securities or any interest therein will be
deemed to have represented by its purchase and holding thereof that it either
(a) is not a Plan or a Plan Asset Entity and is not purchasing such securities
on behalf of or with "plan assets" of any Plan or (b) is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another applicable exemption with respect to such purchase or holding. If a
purchaser or holder of the Capital Securities that is a Plan or a Plan Asset
Entity elects to rely on an exemption other than PTCE 96-23, 95-60, 91-38, 90-1
or 84-14, the Corporation and the Issuer may require a satisfactory opinion of
counsel or other evidence with respect to the availability of such exemption for
such purchase and holding.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering acquiring the Capital
Securities on behalf of or with "plan assets" of any Plan consult with their
counsel regarding the potential consequences if the assets of the Issuer were
deemed to be "plan assets" and the availability of exemptive relief under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14 or any other applicable exemption.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for its own account
in connection with the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by Participating Broker-Dealers during the period referred to below in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities. The Issuer has agreed that this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such New Capital
Securities for a period ending 90 days after the Expiration Date (subject to
extension under certain limited circumstances described herein) or, if earlier,
when all such New Capital Securities have been disposed of by such Participating
Broker-Dealer. See "The Exchange Offer -- Resales of New Capital Securities".
The Issuer will not receive any proceeds from the issuance of the New
Capital Securities offered hereby. New Capital Securities received by
broker-dealers for their own accounts pursuant to the Exchange Offer may be
resold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the New
Capital Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such New Capital Securities. Any broker-dealer that resells
New Capital Securities that were received by it for its own account in
connection with the Exchange Offer and any broker or dealer that participated in
a distribution of such New Capital Securities may be deemed to be an
"underwriter" within the meaning of the Securities Act, any profit on any such
resale of New Capital Securities and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
61
<PAGE> 77
VALIDITY OF NEW SECURITIES
Certain matters of Delaware law relating to the validity of the New Capital
Securities, the enforceability of the New Trust Agreement and the creation of
the Issuer will be passed upon by Richards, Layton & Finger, special Delaware
counsel to the Corporation and the Issuer. The validity of the New Securities
will be passed upon for the Corporation by Miller, Hamilton, Snider & Odom,
L.L.C., Montgomery, Alabama. Certain matters relating to United States federal
income tax considerations will be passed upon for the Corporation by Miller,
Hamilton, Snider & Odom, L.L.C. Richards, Layton & Finger is also serving as
counsel to Wilmington Trust Company, in its various capacities, in connection
with the issuance of the New Capital Securities. Richards, Layton & Finger
performs other services for Wilmington Trust Company from time to time. John C.
H. Miller, Jr., a member of the law firm of Miller, Hamilton, Snider & Odom,
L.L.C., is a director of the Corporation and certain of the Bank Subsidiaries.
Mr. Miller's firm performs services for the Corporation and its subsidiaries,
and in 1996 received $1,474,853 for such services. Mr. Miller also received from
the Corporation $41,000 as compensation for additional services in 1996 and Mr.
Miller owns 20,240 shares of the Corporation's common stock, including 10,000
shares subject to stock options.
EXPERTS
Coopers & Lybrand L.L.P. serves as the independent accountants for the
Corporation. The consolidated financial statements of the Corporation and the
supplemental consolidated financial statements of the Corporation, both as of
December 31, 1995 and 1994 and for each of the three years ended December 31,
1995, are incorporated by reference in this Prospectus in reliance upon the
report of such firm, given on the authority of that firm as experts in
accounting and auditing.
62
<PAGE> 78
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to section 145 of the Delaware General Corporation Law, as
amended, and the Restated Certificate of Incorporation of the Registrant,
officers, directors, employees, and agents of the Registrant are entitled to
indemnification against liabilities incurred while acting in such capacities on
behalf of the Registrant, including reimbursement of certain expenses. In
addition, the Registrant maintains an officers and all of its directors
insurance policy pursuant to which officers and directors of the Registrant are
entitled to indemnification against certain liabilities, including
reimbursement of certain expenses, and the Registrant has indemnity agreements
("Indemnification Agreements") with certain officers and all of its directors
pursuant to which such persons may be indemnified by the Registrant against
certain liabilities, including expenses.
The Indemnification Agreements are intended to provide additional
indemnification to directors and officers of BancGroup beyond the specific
provisions of the Delaware General Corporation Law. Under the Delaware General
Corporation Law, a company may indemnify its directors and officers in
circumstances other than those under which indemnification and the advance of
expenses are expressly permitted by applicable statutory provisions.
Under the Delaware General Corporation Law, a director, officer,
employee or agent of a corporation (i) must be indemnified by the corporation
for all expenses incurred by him (including attorneys' fees) when he is
successful on the merits or otherwise in defense of any action, suit or
proceeding brought by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, (ii) may be indemnified by the
corporation against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement of any such proceeding (other than a proceeding by
or in the right of the corporation) even if he is not successful on the merits
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interest of the corporation (and, in the case of a
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful), and (iii) may be indemnified by the corporation for expenses
(including attorneys' fees) incurred by him in the defense or settlement of a
proceeding brought by or in the right of the corporation, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation; provided that no indemnification may be made
under the circumstances described in clause (iii) if the director, officer,
employee or agent is adjudged liable to the corporation, unless a court
determines that, despite the adjudication of liability but in view of all of
the circumstances, he is fairly and reasonably entitled to indemnification for
the expenses which the court shall deem proper. The indemnification described
in clauses (ii) and (iii) above (unless ordered by a court) may be made only as
authorized in a specific case upon determination by (i) a majority of a quorum
of disinterested directors, (ii) independent legal counsel in a written
opinion, or (iii) the stock holders, that indemnification is proper in the
circumstances because the applicable
II-1
<PAGE> 79
standard of conduct has been met. Expenses (including attorneys' fees)
incurred by an officer or director in defending a proceeding may be advanced by
the corporation prior to the final disposition of the proceeding upon receipt
of an undertaking by or on behalf of the director or officer to repay the
advance if it is ultimately determined that he is not entitled to be
indemnified by the corporation. Expenses (including attorneys' fees) incurred
by other employees and agents may be advanced by the corporation upon terms and
conditions deemed appropriate by the board of directors.
The indemnification provided by the Delaware General Corporation Law
has at least two limitations that are addressed by the Indemnification
Agreements: (i) BancGroup is under no obligation to advance expenses to a
director or officer, and (ii) except in the case of a proceeding in which a
director or officer is successful on the merits or otherwise, indemnification
of a director or officer is discretionary rather than mandatory.
The Indemnification Agreements, therefore, cover any and all expenses
(including attorneys' fees and all other charges paid or payable in connection
therewith) incurred in connection with investigating, defending, being a
witness or participating in (including an appeal), or preparing to defend, be a
witness in or participate in, any threatened, pending or completed action, suit
or proceeding, or any inquiry or investigation, whether civil, criminal,
administrative or otherwise, related to the fact that such director or officer
is or was a director, officer, employee or agent of BancGroup or is or was
serving at the request of BancGroup as a director, officer, employee, agent,
partner, committee member or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise, or by reason
of anything done or not done by such director or officer in any such capacity.
The Indemnification Agreements also provide for the prompt advancement
of all expenses incurred in connection with any proceeding and obligate the
director or officer to reimburse BancGroup for all amounts so advanced if it is
subsequently determined, as provided in the Indemnification Agreements, that
the director or officer is not entitled to indemnification.
The Indemnification Agreements further provide that the director or
officer is entitled to indemnification for, and advancement of, all expenses
(including attorneys' fees) incurred in any proceeding seeking to collect from
BancGroup an indemnity claim or advancement of expenses under the
Indemnification Agreements, BancGroup's Certificate of Incorporation, or the
Delaware General Corporation Law, regardless of whether the director or officer
is successful in such proceeding.
The Indemnification Agreements impose upon BancGroup the burden of
proving that the director or officer is not entitled to indemnification in any
particular case, and the Indemnification Agreements negate certain presumptions
which might otherwise be drawn against a director or officer in certain
circumstances. Further, the Indemnification Agreements provide that if
BancGroup pays a director or officer pursuant to an Indemnification Agreement,
BancGroup will be subrogated to such director's or officer's rights to recover
from third parties.
II-2
<PAGE> 80
The Indemnification Agreements stipulate that a director's or
officer's rights under such contracts are not exclusive of any other indemnity
rights a director or officer may have; however, the Indemnification Agreements
prevent double payment. The Indemnification Agreements require the maintenance
of directors' and officers' liability insurance if such insurance can be
maintained on terms, including rates, satisfactory to BancGroup.
The benefits of the Indemnification Agreements would not be available
if (i) the action with respect to which indemnification is sought was initiated
or brought voluntarily by the officer or director (other than an action to
enforce the right to indemnification under the Indemnification Agreements);
(ii) the officer or director is paid for such expense or liability under an
insurance policy; (iii) the proceeding is for an accounting of profits pursuant
to Section 16(b) of the Securities Exchange Act of 1934, as amended; (iv) the
conduct of the officer or director is adjudged as constituting an unlawful
personal benefit, or active or deliberate dishonesty or willful fraud or
illegality; or (v) a court determines that indemnification or advancement of
expenses is unlawful under the circumstances.
The Indemnification Agreements would provide indemnification for
liabilities arising under the Securities Act of 1933, as amended.
Under the Amended and Restated Trust Agreement, the Corporation has
agreed to indemnify each of the Issuer Trustees and Administrators, and to hold
such Issuer Trustees and Administrators harmless, against any loss, damage,
claims, liability or expense incurred without negligence or bad faith on their
part, arising out of or in connection with the acceptance of administration of
such Trust Agreement, including the costs and expenses of defense against any
claim or liability in connection with the exercise or performance of any of
their powers or duties under the Trust Agreement or the Amended and Restated
Trust Agreement each of which is filed as an exhibit to this Registration
Statement.
BancGroup has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in such act and is, therefore, unenforceable.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following is a list of exhibits that are included in Part
II of the Registration Statement. Such exhibits are
separately indexed elsewhere in the Registration Statement.
II-3
<PAGE> 81
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION LOCATION
<S> <C> <C>
Exhibit 4 Instruments defining the rights of security holders:
(A) Indenture dated as of January 29, 1997 between
the Corporation and Wilmington Trust Company,
as Debenture Trustee. Filed herewith
(B) Certificate of Trust of Colonial Capital II. Filed herewith
(C) Trust Agreement of Colonial Capital II Filed herewith
(D) Form of Amended and Restated Trust Agreement
of Colonial Capital II. Filed herewith
(E) Form of Capital Security Certificate for Colonial
Capital II. Filed herewith
(F) Form of 8.92% Junior Subordinated Deferrable
Interest Debentures to be offered in Exchange. Filed herewith
(G) Form of Guarantee Agreement relating to Colonial
Capital II. Filed herewith
(H) Form of Expense Agreement relating to Colonial
Capital II. Filed herewith
(I) Registration Rights Agreement, dated as of January 29,
1997, among the Corporation, Colonial Capital I, Bear,
Stearns & Co., Inc., and Keefe, Bruyette & Woods, Inc. Filed herewith
(J) Original Amended and Restated Trust Agreement
of Colonial Capital I dated January 29, 1997. Filed herewith
(K) Original Guarantee Agreement dated January 29, 1997. Filed herewith
(L) Original Expense Agreement date January 29, 1997. Filed herewith
(M) All instruments defining the rights of holders of
long-term debt of the Corporation and its subsidiaries. Not filed
pursuant to
clause 4(iii) of
Item 601(b) of
Regulation S-K;
to be furnished
upon request
of the Commission.
</TABLE>
II-4
<PAGE> 82
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION LOCATION
<S> <C> <C>
Exhibit 5
(A) Opinion of Miller, Hamilton, Snider & Odom, L.L.C.
as to validity of New Subordinated Debentures and
New guarantee. Filed herewith
(B) Opinion of Richards, Layton & Finger as to validity
of the New Capital Securities. Filed herewith
Exhibit 8 Opinion of Miller, Hamilton, Snider & Odom, L.L.C.,
as to certain federal income tax matters. Filed herewith
Exhibit 12
(A) Computation of Consolidated Ratios of Earnings
to Fixed Charges. Included in the Prospectus to this
Registration Statement under the
heading "The Colonial BancGroup, Inc.
- Consolidated Ratios of Earnings to
Fixed Charges and Ratio of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends" and incorporated
herein by reference.
(B) Computation of Consolidated ratios of Earnings
to Fixed Charges and Preferred Stock Dividends. Included in the Prospectus to this
Registration Statement under the
heading "The Colonial BancGroup, Inc.
- Consolidated Ratios of Earnings to
Fixed Charges and Ratio of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends" and incorporated
herein by reference.
Exhibit 23 Consents of experts and counsel:
(A) Consent of Coopers & Lybrand, L.L.P. Filed herewith
</TABLE>
II-5
<PAGE> 83
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION LOCATION
<S> <C> <C>
(B) Consent of Miller, Hamilton, Snider & Odom, L.L.C. Filed herewith
(C) Consent of Richards, Layton & Finger. Filed herewith
Exhibit 24 Power of Attorney, as to the Corporation Filed as Exhibit
24 to the registrant's
Registration Statement
Form S-4,
Registration No.
333-20291, and
incorporated
herein by
reference
Exhibit 25
(A) Form T-1 Statement of Eligibility of Wilmington
Trust Company to act as trustee under the Indenture. *
(B) Form T-1 Statement of Eligibility of Wilmington
Trust Company to act as trustee under the Amended
and Restated Trust Agreement. *
(C) Form T-1 Statement of Eligibility of Wilmington
Trust Company under the Guarantee for the benefit
of the holders of Capital Securities. *
Exhibit 99
(A) Form of Letter of Transmittal and instructions thereto. Filed herewith
(B) Form of Notice of Guaranteed Delivery. Filed herewith
- ---------------------------------
* To be filed by amendment
(b) Financial Statement Schedules
-----------------------------
</TABLE>
II-6
<PAGE> 84
The financial statement schedules required to be included
pursuant to this Item are not included herein because they are
not applicable or the required information is shown in the
financial statements or notes thereto.
ITEM 22. UNDERTAKINGS.
For purposes of the following undertakings of this Item 22,
the term "Registrant" means each Registrant that has signed
this Registration Statement.
(a) The undersigned hereby undertakes as follows as required by
Item 512 of Regulation S-K: Insofar as indemnification
for liabilities arising under the Act may be permitted to
directors, officers, and controlling persons of the
Registrant, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by
a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such
II-7
<PAGE> 85
director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against
public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11, or 13 of Form S-4, within one
business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of
responding to the request.
(c) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject
of and included in the Registration Statement when it became effective.
(d) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
II-8
<PAGE> 86
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(e) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the Registration Statement shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
II-9
<PAGE> 87
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Montgomery, Alabama, on the 20th day of February, 1997.
THE COLONIAL BANCGROUP, INC.
By: /s/ Robert_E. Lowder
--------------------------
Robert E. Lowder
Its Chairman of the Board
of Directors, Chief
Executive Officer, and
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
/s/ Robert E. Lowder Chairman of the Board **
- ---------------------------
Robert E. Lowder of Directors, President
and Chief Executive
Officer
/s/ W. Flake Oakley, IV Chief Financial **
- ---------------------------
W. Flake Oakley, IV Officer, Secretary
and Treasurer (Principal
Financial Officer and
Principal Accounting
Officer)
* Director **
- --------------------------
Young J. Boozer
* Director **
- --------------------------
William Britton
</TABLE>
II-10
<PAGE> 88
<TABLE>
<S> <C> <C>
* Director **
- --------------------------
Jerry J. Chesser
* Director **
- --------------------------
Augustus K. Clements, III
* Director **
- -------------------------
Robert C. Craft
* Director **
- -------------------------
Patrick F. Dye
* Director **
- -------------------------
Clinton O. Holdbrooks
* Director **
- -------------------------
D. B. Jones
* Director **
- -------------------------
Harold D. King
* Director **
- -------------------------
John Ed Mathison
* Director **
- -------------------------
Milton E. McGregor
</TABLE>
II-11
<PAGE> 89
<TABLE>
<S> <C> <C>
* Director **
- -------------------------
John C. H. Miller, Jr.
* Director **
- -------------------------
Joe D. Mussafer
* Director **
- -------------------------
William E. Powell
* Director **
- -------------------------
Donald J. Prewitt
* Director **
- -------------------------
Jack H. Rainer
* Director **
- -------------------------
Frances E. Roper
* Director **
- -------------------------
Ed V. Welch
</TABLE>
* The undersigned, acting pursuant to a power of attorney, has signed
this Registration Statement on Form S-4 for and on behalf of the
persons indicated above as such persons' true and lawful
attorney-in-fact and in their names, places and stead, in the
capacities indicated above and on the date indicated below.
/s/ W. Flake Oakley, IV
- -----------------------
W. Flake Oakley, IV
Attorney-in-Fact
** Dated: February 20, 1997
II-12
<PAGE> 90
Pursuant to the requirements of the Securities Act of 1933, as
amended, Colonial Capital II has duly caused this Registration Statement Form
S-4 to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Montgomery, State of Alabama, as of the 20th day of February,
1997.
COLONIAL CAPITAL II
By: The Colonial BancGroup, Inc., as Depositor
By: W. Flake Oakley
-----------------------------------
Executive Vice President
and Chief Financial Officer
II-13
<PAGE> 91
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION LOCATION
<S> <C> <C>
Exhibit 4 Instruments defining the rights of security holders:
(A) Indenture dated as of January 29, 1997 between
the Corporation and Wilmington Trust Company,
as Debenture Trustee. Filed herewith
(B) Certificate of Trust of Colonial Capital II. Filed herewith
(C) Trust Agreement of Colonial Capital II Filed herewith
(D) Form of Amended and Restated Trust Agreement
of Colonial Capital II. Filed herewith
(E) Form of Capital Security Certificate for Colonial
Capital II. Filed herewith
(F) Form of 8.92% Junior Subordinated Deferrable
Interest Debentures to be offered in Exchange. Filed herewith
(G) Form of Guarantee Agreement relating to Colonial
Capital II. Filed herewith
(H) Form of Expense Agreement relating to Colonial
Capital II. Filed herewith
(I) Registration Rights Agreement, dated as of January 29,
1997, among the Corporation, Colonial Capital I, Bear,
Stearns & Co., Inc., and Keefe, Bruyette & Woods, Inc. Filed herewith
(J) Original Amended and Restated Trust Agreement
of Colonial Capital I dated January 29, 1997. Filed herewith
(K) Original Guarantee Agreement dated January 29, 1997. Filed herewith
(L) Original Expense Agreement date January 29, 1997. Filed herewith
(M) All instruments defining the rights of holders of
long-term debt of the Corporation and its subsidiaries. Not filed
pursuant to
clause 4(iii) of
</TABLE>
19
<PAGE> 92
<TABLE>
<S> <C> <C>
Item 601(b) of
Regulation S-K;
to be furnished
upon request of
the Commission
Exhibit 5
(A) Opinion of Miller, Hamilton, Snider & Odom, L.L.C.
as to validity of New Subordinated Debentures and
New guarantee. Filed herewith
(B) Opinion of Richards, Layton & Finger as to validity
of the New Capital Securities. Filed herewith
Exhibit 8 Opinion of Miller, Hamilton, Snider & Odom, L.L.C.,
as to certain federal income tax matters. Filed herewith
Exhibit 12
(A) Computation of Consolidated Ratios of Earnings Included in the Prospectus to this
to Fixed Charges Registration Statement under the
heading "The Colonial BancGroup, Inc.
- Consolidated Ratios of Earnings to
Fixed Charges and Ratio of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends" and incorporated
herein by reference.
(B) Computation of Consolidated ratios of Earnings
to Fixed Charges and Preferred Stock Dividends. Included in the Prospectus to this
Registration Statement under the
heading "The Colonial BancGroup, Inc.
- Consolidated Ratios of Earnings to
Fixed Charges and Ratio of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends" and incorporated
herein by reference.
Exhibit 23 Consents of experts and counsel:
</TABLE>
20
<PAGE> 93
<TABLE>
<S> <C>
(A) Consent of Coopers & Lybrand, L.L.P. Filed herewith
(B) Consent of Miller, Hamilton, Snider & Odom, L.L.C. Filed herewith
(C) Consent of Richards, Layton & Finger, P.A. Filed herewith
Exhibit 24 Power of Attorney, as to the Corporation Filed as Exhibit 24
to the
registrant's
Registration
Statement on
Form S-4,
Registration No.
333-20291, and
incorporated
herein by
reference
Exhibit 25
(A) Form T-1 Statement of Eligibility of Wilmington
Trust Company to act as trustee under the Indenture. *
(B) Form T-1 Statement of Eligibility of Wilmington
Trust Company to act as trustee under the Amended
and Restated Trust Agreement. *
(C) Form T-1 Statement of Eligibility of Wilmington
Trust Company under the Guarantee for the benefit
of the holders of Capital Securities. *
Exhibit 99
(A) Form of Letter of Transmittal and instructions thereto. Filed herewith
(B) Form of Notice of Guaranteed Delivery. Filed herewith
__________________________________
* To be filed by amendment
</TABLE>
21
<PAGE> 94
(b) Financial Statement Schedules
The financial statement schedules required to be included
pursuant to this Item are not included herein because they are
not applicable or the required information is shown in the
financial statements or notes thereto.
22
<PAGE> 1
EXHIBIT 4(A)
================================================================================
THE COLONIAL BANCGROUP, INC.
TO
WILMINGTON TRUST COMPANY,
as Trustee
______________
JUNIOR SUBORDINATED INDENTURE
Dated as of January 29, 1997
______________
================================================================================
<PAGE> 2
THE COLONIAL BANCGROUP, INC.
Reconciliation and tie between the Trust Indenture Act of 1939 (including
cross-references to provisions of Sections 310 to and including 317 which,
pursuant to Section 318(c) of the Trust Indenture At of 1939, as amended by the
Trust Reform Act of 1990, are a part of and govern the indenture whether or not
physically contained therein) and the Junior Subordinated Indenture, dated as of
January 29, 1997.
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --- ------- -------
<S> <C> <C>
310 (a)(1), (2) and (5)...................................................6.9
(a)(3).....................................................Not Applicable
(a)(4).....................................................Not Applicable
(b).............................................................6.8, 6.10
(c)........................................................Not Applicable
311 (a)..................................................................6.13
(b)..................................................................6.13
312 (a)...........................................................7.1, 7.2(a)
(b)................................................................7.2(b)
(c)................................................................7.2(c)
313 (a)................................................................7.3(a)
(b)................................................................7.3(b)
(c)........................................................7.3(a), 7.3(b)
(d)................................................................7.3(c)
314 (a)(1), (2) and (3)...................................................7.4
(a)(4)...............................................................10.4
(b)........................................................Not Applicable
(c)(1)................................................................1.2
(c)(2)................................................................1.2
(c)(3).....................................................Not Applicable
(d)........................................................Not Applicable
(e)...................................................................1.2
(f)........................................................Not Applicable
315 (a)................................................................6.1(a)
(b)..............................................................6.2, 7.3
(c)................................................................6.1(b)
(d)................................................................6.1(c)
(d)(1)..........................................................6.1(c)(1)
(d)(2)..........................................................6.1(c)(2)
(d)(3)..........................................................6.1(c)(3)
(e)..................................................................5.14
316
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
(a)(1)(A)...........................................................5.12
(a)(1)(B)...........................................................5.13
(a)(2)....................................................Not Applicable
(b)..................................................................5.8
(c)...............................................................1.4(f)
317 (a)(1)...............................................................5.3
(a)(2)...............................................................5.4
(b).................................................................10.3
318 (a)..................................................................1.7
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Junior Subordinated Indenture.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C> <C>
SECTION 1.1. Definitions..................................................................... 1
SECTION 1.2. Compliance Certificate and Opinions............................................. 11
SECTION 1.3. Forms of Documents Delivered to Trustee......................................... 12
SECTION 1.4. Acts of Holders................................................................. 12
SECTION 1.5. Notices, Etc. to Trustee and Corporation........................................ 15
SECTION 1.6. Notice to Holders; Waiver....................................................... 15
SECTION 1.7. Conflict with Trust Indenture Act............................................... 15
SECTION 1.8. Effect of Headings and Table of Contents........................................ 16
SECTION 1.9. Successors and Assigns.......................................................... 16
SECTION 1.10. Separability Clause............................................................ 16
SECTION 1.11. Benefits of Indenture.......................................................... 16
SECTION 1.12. Governing Law.................................................................. 16
SECTION 1.13. Non-Business Days.............................................................. 16
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally................................................................. 17
SECTION 2.2. Form of Face of Security........................................................ 17
SECTION 2.3. Form of Reverse of Security..................................................... 21
SECTION 2.4. Additional Provisions Required in Global Security............................... 25
SECTION 2.5. Form of Trustee's Certificate of Authentication................................. 25
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms................................................................. 26
SECTION 3.2. Denominations................................................................... 29
SECTION 3.3. Execution, Authentication, Delivery and Dating.................................. 29
</TABLE>
-i-
<PAGE> 5
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 3.4. Temporary Securities............................................................ 31
SECTION 3.5. Global Securities............................................................... 31
SECTION 3.6. Registration, Transfer and Exchange Generally; Certain Transfers and
Exchanges; Securities Act Legends................................................... 33
SECTION 3.7. Mutilated, Destroyed, Lost and Stolen Securities................................ 36
SECTION 3.8. Payment of Interest and Additional Interest; Interest Rights Preserved.......... 37
SECTION 3.9. Persons Deemed Owners........................................................... 39
SECTION 3.10. Cancellation................................................................... 39
SECTION 3.11. Computation of Interest........................................................ 39
SECTION 3.12. Deferrals of Interest Payment Dates............................................ 40
SECTION 3.13. Right of Set-Off............................................................... 41
SECTION 3.14. Agreed Tax Treatment........................................................... 41
SECTION 3.15. Shortening or Extension of Stated Maturity..................................... 41
SECTION 3.16. CUSIP Numbers.................................................................. 42
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture......................................... 42
SECTION 4.2. Application of Trust Money...................................................... 43
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default............................................................... 44
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.............................. 45
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee................. 46
SECTION 5.4. Trustee May File Proofs of Claim................................................ 47
SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities...................... 48
SECTION 5.6. Application of Money Collected.................................................. 48
SECTION 5.7. Limitation on Suits............................................................. 49
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and
Interest; Direct Action by Holders of Capital Securities............................ 49
SECTION 5.9. Restoration of Rights and Remedies.............................................. 50
</TABLE>
-ii-
<PAGE> 6
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 5.10. Rights and Remedies Cumulative................................................. 50
SECTION 5.11. Delay or Omission Not Waiver................................................... 50
SECTION 5.12. Control by Holders............................................................. 51
SECTION 5.13. Waiver of Past Defaults........................................................ 51
SECTION 5.14. Undertaking for Costs.......................................................... 52
SECTION 5.15. Waiver of Usury, Stay or Extension Laws........................................ 52
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities............................................. 52
SECTION 6.2. Notice of Defaults.............................................................. 54
SECTION 6.3. Certain Rights of Trustee....................................................... 54
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.......................... 55
SECTION 6.5. May Hold Securities............................................................. 55
SECTION 6.7. Compensation and Reimbursement.................................................. 55
SECTION 6.8. Disqualification; Conflicting Interests......................................... 56
SECTION 6.9. Corporate Trustee Required; Eligibility......................................... 56
SECTION 6.10. Resignation and Removal; Appointment of Successor.............................. 57
SECTION 6.11. Acceptance of Appointment by Successor......................................... 58
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.................... 60
SECTION 6.13. Preferential Collection of Claims Against Corporation.......................... 60
SECTION 6.14. Appointment of Authenticating Agent............................................ 60
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CORPORATION
SECTION 7.1. Corporation to Furnish Trustee Names and Addresses of Holders................... 62
SECTION 7.2. Preservation of Information, Communications to Holders.......................... 62
SECTION 7.3. Reports by Trustee.............................................................. 63
SECTION 7.4. Reports by Corporation.......................................................... 63
ARTICLE VIII
</TABLE>
-iii-
<PAGE> 7
<TABLE>
<CAPTION>
Page
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
<S> <C> <C>
SECTION 8.1. Corporation May Consolidate, Etc., Only on Certain Terms........................ 64
SECTION 8.2. Successor Corporation Substituted............................................... 64
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders.............................. 65
SECTION 9.2. Supplemental Indentures with Consent of Holders................................. 66
SECTION 9.3. Execution of Supplemental Indentures............................................ 68
SECTION 9.4. Effect of Supplemental Indentures............................................... 68
SECTION 9.5. Conformity with Trust Indenture Act............................................. 68
SECTION 9.6. Reference in Securities to Supplemental Indentures.............................. 68
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest..................................... 69
SECTION 10.2. Maintenance of Office or Agency................................................ 69
SECTION 10.3. Money for Security Payments to be Held in Trust................................ 69
SECTION 10.4. Statement as to Compliance..................................................... 71
SECTION 10.5. Waiver of Certain Covenants.................................................... 71
SECTION 10.6. Additional Sums................................................................ 71
SECTION 10.7. Additional Covenants........................................................... 72
SECTION 10.8. Original Issue Discount. ...................................................... 73
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article.................................................. 73
SECTION 11.2. Election to Redeem; Notice to Trustee.......................................... 74
</TABLE>
-iv-
<PAGE> 8
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 11.3. Selection of Securities to be Redeemed......................................... 74
SECTION 11.4. Notice of Redemption........................................................... 74
SECTION 11.5. Deposit of Redemption Price.................................................... 76
SECTION 11.6. Payment of Securities Called for Redemption.................................... 76
SECTION 11.7. Right of Redemption of Securities Initially Issued to an Issuer Trust.......... 76
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article....................................................... 77
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.......................... 77
SECTION 12.3. Redemption of Securities for Sinking Fund...................................... 78
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Indebtedness.................................. 79
SECTION 13.2. No Payment When Senior Indebtedness in Default; Payment Over of
Proceeds Upon Dissolution, Etc...................................................... 80
SECTION 13.3. Payment Permitted If No Default................................................ 81
SECTION 13.4. Subrogation to Rights of Holders of Senior Indebtedness........................ 82
SECTION 13.5. Provisions Solely to Define Relative Rights.................................... 82
SECTION 13.6. Trustee to Effectuate Subordination............................................ 83
SECTION 13.7. No Waiver of Subordination Provisions.......................................... 83
SECTION 13.8. Notice to Trustee.............................................................. 83
SECTION 13.9. Reliance on Judicial Order or Certificate of Liquidating Agent................. 84
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Indebtedness...................... 84
SECTION 13.11. Rights of Trustee as Holder of Senior Indebtedness; Preservation of
Trustee's Rights.................................................................... 85
SECTION 13.12. Article Applicable to Paying Agents........................................... 85
Exhibit A Form of Restricted Securities Certificate
</TABLE>
-v-
<PAGE> 9
JUNIOR SUBORDINATED INDENTURE, dated as of January 29, 1997, between
THE COLONIAL BANCGROUP, INC., a Delaware corporation (the "Corporation"), having
its principal office at One Commerce Street, Montgomery, Alabama 36104, and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Trustee (the
"Trustee").
RECITALS OF THE CORPORATION
WHEREAS, the Corporation has duly authorized the execution and delivery
of this Indenture to provide for the issuance from time to time of its unsecured
junior subordinated debt securities in series (the "Securities") of
substantially the tenor hereinafter provided, including Securities issued to
evidence loans made to the Corporation with the proceeds from the issuance from
time to time by one or more business trusts (each an "Issuer Trust") of
preferred undivided beneficial interests in the assets of such Issuer Trusts
(the "Capital Securities") and common undivided interests in the assets of such
Issuer Trusts (the "Common Securities"), and to provide the terms and conditions
upon which the Securities are to be authenticated, issued and delivered; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Corporation, in accordance with its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, 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;
<PAGE> 10
(c) The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation";
(d) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles;
(e) Whenever the context may require, any gender shall be
deemed to include the others;
(f) 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 Indenture; and
(g) The words "hereby", "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
"Act" when used with respect to any Holder has the meaning specified
in Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Securities of any series the payment of which has not been
made on the applicable Interest Payment Date or that has been deferred during an
Extension Period, and that shall accrue at the rate per annum specified or
determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 10.6.
"Additional Taxes" means any additional taxes, duties and other
governmental charges to which an Issuer Trust has become subject from time to
time as a result of a Tax Event.
"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.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
-2-
<PAGE> 11
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Bankruptcy Code" means Title 11 of the United States Code or any
successor statute thereto, in each case as amended from time to time.
"Board of Directors" means the board of directors of the Corporation or
the Executive Committee of the board of directors of the Corporation (or any
other committee of the board of directors of the Corporation performing similar
functions) or a committee designated by the board of directors of the
Corporation (or such committee), comprised of two or more members of the board
of directors of the Corporation or officers of the Corporation, or both.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Corporation to have been duly adopted
by the Board of Directors, or officers of the Corporation to which authority to
act on behalf of the Board of Directors has been delegated, and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (iii) a day on which the
Corporate Trust Office of the Trustee, or, with respect to Securities of a
series initially issued to an Issuer Trust for so long as such Securities are
held by such Issuer Trust, the Corporate Trust Office (as defined in the related
Trust Agreement) of the Property Trustee or the Delaware Trustee under the
related Trust Agreement, is closed for business.
"Capital Securities" has the meaning specified in the first recital of
this Indenture.
"Capital Treatment Event" means, in respect of any Issuer Trust, the
reasonable determination by the Corporation (as evidenced by an Officers'
Certificate delivered to the Trustee) that, as a result of the occurrence of any
amendment to, or change (including any announced prospective change) in, the
laws (or any rules or regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws, rules or regulations, which amendment or change is effective
or such pronouncement, action or decision is announced on or after the date of
the issuance of the Capital Securities of such Issuer Trust, there is more than
an insubstantial risk that the Corporation will not be entitled to treat an
amount equal to the aggregate Liquidation Amount (as such term is defined in the
related Trust Agreement) of such Capital Securities as "Tier 1 Capital" (or the
then equivalent thereof) for purposes of the capital adequacy guidelines of the
Board of Governors of the Federal Reserve System, as then in effect and
applicable to the Corporation.
-3-
<PAGE> 12
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Securities and Exchange Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered.
"corporation" includes a corporation, association, company, limited
liability company, joint-stock company or business trust.
"Corporation" means the Person named as the "Corporation" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Corporation" shall mean such successor corporation.
"Corporation Request" and "Corporation Order" mean, respectively, a
written request or order signed in the name of the Corporation by its Chairman
of the Board of Directors, its Vice Chairman of the Board of Directors, its
President one of its Executive Vice Presidents, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent and without
duplication, (i) every obligation of such Person for money borrowed; (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses; (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person; (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such Person;
(vi) all indebtedness of the Corporation, whether incurred on or prior to the
date of this Indenture or thereafter incurred, for claims in respect of
derivative products, including interest rate, foreign exchange rate and
commodity forward contracts, options and swaps and similar arrangements; and
(vii) every obligation of the type referred to in clauses (i) through (vi) of
another Person and all dividends of another Person the payment of which, in
either case, such Person has guaranteed or is responsible or liable for,
directly or indirectly, as obligor or otherwise.
"Defaulted Interest" has the meaning specified in Section 3.8.
-4-
<PAGE> 13
"Delaware Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Delaware Trustee" in the related Trust Agreement, solely in
its capacity as Delaware Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor Delaware trustee appointed as therein provided.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Corporation pursuant to
Section 3.1 with respect to such series (or any successor thereto).
"Discount Security" means any security that provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Distributions", with respect to the Trust Securities issued by an
Issuer Trust, means amounts payable in respect of such Trust Securities as
provided in the related Trust Agreement and referred to therein as
"Distributions".
"Dollar" or "$" means the currency of the United States of America
that, as at the time of payment, is legal tender for the payment of public and
private debts.
"Event of Default", unless otherwise specified with respect to a series
of Securities as contemplated by Section 3.1, has the meaning specified in
Article V.
"Exchange Act" means the Securities Exchange Act of 1934 or any
successor statute thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4.
"Extension Period" has the meaning specified in Section 3.12.
"Global Security" means a Security in the form prescribed in Section
2.4 evidencing all or part of a series of Securities, issued to the Depositary
for such series or its nominee, and registered in the name of such Depositary or
its nominee.
"Guarantee Agreement" means, with respect to any Issuer Trust, the
Guarantee Agreement executed by the Corporation for the benefit of the Holders
of the Capital Securities issued by such Issuer Trust, as modified, amended or
supplemented from time to time.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant
-5-
<PAGE> 14
to the applicable provisions hereof and shall include the terms of each
particular series of Securities established as contemplated by Section 3.1.
"Institutional Accredited Investor" means an accredited investor within
the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act.
"Interest Payment Date" means, as to each series of Securities, the
Stated Maturity of an installment of interest on such Securities.
"Investment Company Act" means the Investment Company Act of 1940 or
any successor statute thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by an Issuer Trust of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a written change
(including any announced prospective 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 such Issuer
Trust is or will be considered an "investment company" that is required to be
registered under the Investment Company Act, which change or prospective change
becomes effective or would become effective, as the case may be, on or after the
date of the issuance of the Capital Securities of such Issuer Trust.
"Issuer Trust" has the meaning specified in the first recital of this
Indenture.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security or any installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or an Executive Vice
President, and by the Treasurer or the Secretary, of the Corporation and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Corporation or any Affiliate of the
Corporation.
"Original Issue Date" means the date of issuance specified as such in
each Security.
"Outstanding" means, when used in reference to any Securities, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
-6-
<PAGE> 15
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or that have been paid
pursuant to Section 3.7, unless proof satisfactory to the Trustee is
presented that any such Securities are held by Holders in whose hands
such Securities are valid, binding and legal obligations of the
Corporation;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Corporation or any other obligor upon the Securities or any Affiliate of
the Corporation or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that the Trustee knows to be so owned shall
be so disregarded. Securities so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Corporation or any other obligor upon the Securities or
any Affiliate of the Corporation or such other obligor. Upon the written request
of the Trustee, the Corporation shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Securities, if any, known by
the Corporation to be owned or held by or for the account of the Corporation or
any other obligor on the Securities, or any Affiliate of the Corporation or such
obligor, and subject to the provisions of Section 6.1, the Trustee shall be
entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination. Notwithstanding
anything herein to the contrary, Securities of any series initially issued to an
Issuer Trust that are owned by such Issuer Trust shall be deemed to be
Outstanding notwithstanding the ownership by the Corporation or an Affiliate of
any beneficial interest in such Issuer Trust.
"Paying Agent" means the Trustee or any Person authorized by the
Corporation to pay the principal of (or premium, if any) or interest on, or
other amounts in respect of, any Securities on behalf of the Corporation.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
-7-
<PAGE> 16
"Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of (and premium, if any) and interest
(including any Additional Interest) on the Securities of such series are payable
pursuant to Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.7 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Property Trustee" in the related Trust Agreement, solely in
its capacity as Property Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor property trustee appointed as therein provided.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or the terms of such Security.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture or the terms of such Security.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of such series, the day that
is fifteen days next preceding such Interest Payment Date (whether or not a
Business Day).
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer 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 matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Exhibit A.
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"Restricted Securities Legend" means a legend substantially in the form
of the legend required in the form of Security set forth in Section 2.2 to be
placed upon a Restricted Security.
"Restricted Security" means each Security required pursuant to Section
3.6(c) to bear the Restricted Securities Legend.
"Rights Plan" means a plan of the Corporation providing for the
issuance by the Corporation to all holders of its common stock of rights
entitling the holders thereof to subscribe for or purchase shares of any class
or series of capital stock of the Corporation, which rights are (i) deemed to be
transferred with such shares of such common stock and (ii) also issued in
respect of future issuances of such common stock, in each case until the
occurrence of a specified event or events.
"Rule 144A Information" shall be such information with respect to the
Corporation as is specified pursuant to Rule 144A(d)(4) under the Securities Act
or any successor provision thereto, in each case as amended from time to time.
"Security" means any debt security authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933 or any successor
statute thereto, in each case as amended from time to time.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.6.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Corporation whether
or not such claim for post-petition interest is allowed in such proceeding), on
Debt of the Corporation, whether incurred on or prior to the date of this
Indenture or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are not superior in right of payment to the Securities or
to other Debt that is pari passu with, or subordinated to, the Securities,
provided, however, that Senior Indebtedness shall not be deemed to include (a)
any Debt of the Corporation that, when incurred and without respect to any
election under Section 1111(b) of the Bankruptcy Reform Act of 1978, was without
recourse to the Corporation, (b) any Debt of the Corporation to any of its
Subsidiaries, (c) any Debt of the Corporation to any Person who is an employee
of the Corporation in such Person's capacity as such, (d) any Securities, (e)
trade accounts payable of the Corporation, and (f) accrued liabilities arising
in the ordinary course of business of the Corporation.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.8.
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"Stated Maturity", when used with respect to any Security or any
installment of principal thereof (or premium, if any) or interest (including any
Additional Interest) thereon, means the date specified pursuant to the terms of
such Security as the fixed date on which the principal of such Security or such
installment of principal (or premium, if any) or interest (including any
Additional Interest) is due and payable, as such date may be shortened or
extended as provided pursuant to the terms of such Security and this Indenture,
in the case of the Stated Maturity of any Security, and subject to the deferral
of any such date during any Extension Period, in the case of any instalment of
interest.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Corporation or by
one or more other Subsidiaries, or by the Corporation and one or more other
Subsidiaries. For purposes of this definition, "voting stock" means stock that
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security. For the purposes of this definition, any Security
authenticated and delivered under Section 3.7 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Tax Event" means the receipt by an Issuer Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Capital Securities of such Issuer Trust, there is more than an insubstantial
risk that (i) such Issuer Trust is, or within 90 days of the delivery of such
Opinion of Counsel will be, subject to United States federal income tax with
respect to income received or accrued on the corresponding series of Securities
issued by the Corporation to such Issuer Trust, (ii) interest payable by the
Corporation on such corresponding series of Securities is not, or within 90 days
of the delivery of such Opinion of Counsel will not be, deductible by the
Corporation, in whole or in part, for United States federal income tax purposes,
or (iii) such Issuer Trust is, or within 90 days of the delivery of such Opinion
of Counsel will be, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Trust Agreement" means, with respect to any Issuer Trust, the trust
agreement or other governing instrument of such Issuer Trust.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument, solely in its capacity as such Trustee and not in
its individual capacity, until a
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successor Trustee shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter "Trustee" shall mean or include each Person
who is then a Trustee hereunder and, if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the Trustee with respect to Securities of that series.
"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 if
the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture
Act" means the Trust Indenture Act of 1939 as so amended.
"Trust Securities" means the Common Securities and the Capital
Securities.
"Vice President," when used with respect to the Corporation, means any
duly appointed vice president, whether or not designated by a number or a word
or words added before or after the title "vice president."
SECTION 1.2. Compliance Certificate and Opinions.
Upon any application or request by the Corporation to the Trustee to
take any action under any provision of this Indenture, the Corporation shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent (including covenants compliance with which constitutes a condition
precedent), if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent (including covenants
compliance with which constitutes a condition precedent), if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.4) shall include:
(1) a statement by each individual signing such certificate or
opinion that such individual has read such covenant or condition and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions of
such individual contained in such certificate or opinion are based;
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<PAGE> 20
(3) a statement that, in the opinion of such individual, he or
she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of such
individual, such condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons may certify or give an opinion as to other matters,
and any of such Persons may certify or give an opinion as to such matters
contained in one or several documents.
Any certificate or opinion of an officer of the Corporation may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate, opinion or representations
with respect to matters upon which his or her certificate or opinion is based
are erroneous. Any such certificate or Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate or opinion of, or
representations by, one or more officers of the Corporation stating that the
information with respect to such factual matters is in the possession of the
Corporation, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate, opinion or representations with respect to
matters upon which his or her certificate or opinion is based are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments is or are
delivered to the Trustee, and, where it is hereby expressly required, to the
Corporation. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of
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this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee
and the Corporation, if made in the manner provided in this Section 1.4.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such notary the execution thereof.
Where such execution is by a Person acting in other than such Persons's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such Person's authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Corporation in
reliance thereon, whether or not notation of such action is made upon such
Security.
(f) The Corporation may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Corporation may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next succeeding paragraph.
If any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date, provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Corporation from setting a new record date for any action for which
a record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Corporation, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable
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Expiration Date to be given to the Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2), or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date, provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Corporation's expense, shall
cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Corporation in writing and to each
Holder of Securities of the relevant series in the manner set forth in Section
1.6.
With respect to any record date set pursuant to this Section 1.4, the
party hereto that sets such record date may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day, provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section
1.4, the party hereto that set such record date shall be deemed to have
initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such 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 principal amount.
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<PAGE> 23
SECTION 1.5. Notices, Etc. to Trustee and Corporation.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Capital
Securities or the Corporation shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the
Trustee at its Corporate Trust office, or
(2) the Corporation by the Trustee, any Holder or any holder
of Capital Securities shall be sufficient for every purpose (except as
otherwise provided in Section 5.1) hereunder if in writing and mailed,
first-class postage prepaid, to the Corporation addressed to it at the
address of its principal office specified in the first paragraph of
this Indenture or at any other address previously furnished in writing
to the Trustee by the Corporation.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. If, by reason of the suspension
of or irregularities in regular mail service or for any other reason, it shall
be impossible or impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture or of
the relevant Securities, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 1.7. Conflict with Trust Indenture Act.
Except as otherwise expressly provided herein, the Trust Indenture Act
shall apply as a matter of contract to this Indenture for purposes of
interpretation, construction and defining the rights and obligations hereunder,
and this Indenture, the Corporation and the Trustee shall be deemed for all
purposes hereof to be subject to and governed by the Trust Indenture Act to the
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same extent as would be the case if this Indenture were qualified under that Act
on the date hereof. Except as otherwise expressly provided herein, if and to the
extent that any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act through operation of Section 318(c) thereof, such imposed duties
shall control.
SECTION 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Corporation shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
If any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Indebtedness, the Holders of the Securities and,
to the extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1, 9.2
and 10.5 the holders of Capital Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 1.13. Non-Business Days.
If any Interest Payment Date, Redemption Date or Stated Maturity shall
not be a Business Day, then (notwithstanding any other provision of this
Indenture or the Securities) payment of principal of (and premium, if any) or
interest (including any Additional Interest) or other amounts in respect of such
Security need not be made on such date, but may be made on the next succeeding
Business Day (and no interest shall accrue in respect of the amounts whose
payment
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<PAGE> 25
is so delayed for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, until such next
succeeding Business Day) except that, if such Business Day falls in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day (in each case with the same force and effect as if made
on the Interest Payment Date or Redemption Date or at the Stated Maturity).
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article,
or in such other form or forms as shall be established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with applicable tax laws or the
rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Corporation and delivered to the Trustee at or prior
to the delivery of the Corporation Order contemplated by Section 3.3 with
respect to the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such securities.
SECTION 2.2. Form of Face of Security.
THE COLONIAL BANCGROUP, INC.
[Title of Security]
[If the Security is a Restricted Security, insert --"THE SECURITIES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933
(THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
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OTHERWISE TRANSFERRED EXCEPT (A) BY ANY INITIAL INVESTOR THAT IS NOT A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT, (1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (2) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (B) BY ANY INITIAL INVESTOR THAT IS A QUALIFIED INSTITUTIONAL
BUYER OR BY ANY SUBSEQUENT INVESTOR, (1) PURSUANT TO AN AVAILABLE EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND, IN EACH CASE (A) AND (B),
IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS. SECURITIES OWNED BY AN INITIAL INVESTOR THAT IS
NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM AND MAY
NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS, AS PROVIDED IN THE INDENTURE REFERRED TO BELOW."
No. _____________ $__________
THE COLONIAL BANCGROUP, INC., a corporation organized and existing
under the laws of Delaware (hereinafter called the "Corporation", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _______________, or registered
assigns, the principal sum of __________ Dollars on _________, ____ [if the
Security is a Global Security, then insert, if applicable--, or such other
principal amount represented hereby as may be set forth in the records of the
Securities Registrar hereinafter referred to in accordance with the Indenture]
[; provided that the Corporation may (i) shorten the Stated Maturity of the
principal of this Security to a date not earlier than __________, and (ii)
extend the Stated Maturity of the principal of this Security at any time on one
or more occasions, subject to certain conditions specified in Section 3.15 of
the Indenture, but in no event to a date later than __________]. The Corporation
further promises to pay interest on said principal sum from ___________, ____ or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, [monthly][quarterly][semi-annually] [if applicable,
insert-(subject to deferral as set forth herein)] in arrears on [insert
applicable Interest Payment Dates] of each year, commencing ________, ____, at
the rate of ___% per annum, [if applicable insert--together with Additional
Sums, if any, as provided in Section 10.6 of the Indenture] until the principal
hereof is paid or duly provided for or made available for payment [if
applicable, insert-- ; provided that any overdue principal, premium or
Additional Sums and any overdue
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installment of interest shall bear Additional Interest at the rate of ___% per
annum (to the extent that the payment of such interest shall be legally
enforceable), compounded [monthly][quarterly][semi-annually], from the dates
such amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand]. The amount of interest payable for any
period less than a full interest period shall be computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed in a partial
month in such period. The amount of interest payable for any full interest
period shall be computed by dividing the applicable rate per annum by
[twelve/four/two]. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest installment [if applicable insert--, which shall be the [____________
or ____________] (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date]. Any such interest not so punctually paid
or duly provided for shall 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
Security (or one or more Predecessor Securities) 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 Securities
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 on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
[If applicable, insert--So long as no Event of Default has occurred and
is continuing, the Corporation shall have the right, at any time during the term
of this Security, from time to time to defer the payment of interest on this
Security for up to ____ consecutive [monthly][quarterly][semi-annual] interest
payment periods with respect to each deferral period (each an "Extension
Period") [if applicable, insert--, during which Extension Periods the
Corporation shall have the right to make partial payments of interest on any
Interest Payment Date, and] at the end of which the Corporation shall pay all
interest then accrued and unpaid (including any Additional Interest, as provided
below); provided, however, that no Extension Period shall extend beyond the
Stated Maturity of the principal of this Security [if Stated Maturity can be
shortened or extended, insert--, as then in effect,] and no such Extension
Period may end on a date other than an Interest Payment Date; and provided
further, however, that during any such Extension Period, the Corporation shall
not (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Corporation's
capital stock, or (ii) make any payment of principal of or interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the Corporation
that rank pari passu in all respects with or junior in interest to this Security
(other than (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Corporation in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of any one or
more employees, officers, directors or consultants, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of capital stock of the
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<PAGE> 28
Corporation (or securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered into prior to the
applicable Extension Period, (b) as a result of an exchange or conversion of any
class or series of the Corporation's capital stock (or any capital stock of a
Subsidiary of the Corporation) for any class or series of the Corporation's
capital stock or of any class or series of the Corporation's indebtedness for
any class or series of the Corporation's capital stock, (c) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection
with any Rights Plan, or the issuance of rights, stock or other property under
any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or
(e) any dividend in the form of stock, warrants, options or other rights where
the dividend stock or the stock issuable upon exercise of such warrants, options
or other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of
interest, provided that no Extension Period shall exceed ____ consecutive
[monthly][quarterly][semi-annual] interest payment periods, extend beyond the
Stated Maturity of the principal of this Security or end on a date other than an
Interest Payment Date. Upon the termination of any such Extension Period and
upon the payment of all accrued and unpaid interest and any Additional Interest
then due on any Interest Payment Date, the Corporation may elect to begin a new
Extension Period, subject to the above conditions. No interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension shall bear Additional Interest (to the extent that the payment of
such interest shall be legally enforceable) at the rate of ____% per annum,
compounded [monthly][quarterly][semi- annually] and calculated as set forth in
the first paragraph of this Security, from the dates on which amounts would
otherwise have been due and payable until paid or made available for payment.
The Corporation shall give the Holder of this Security and the Trustee notice of
its election to begin any Extension Period at least one Business Day prior to
the next succeeding Interest Payment Date on which interest on this Security
would be payable but for such deferral [if applicable, insert--or so long as
such Securities are held by [insert name of applicable Issuer Trust], at least
one Business Day prior to the earlier of (i) the next succeeding date on which
Distributions on the Capital Securities of such Issuer Trust would be payable
but for such deferral, and (ii) the date on which the Property Trustee of such
Issuer Trust is required to give notice to holders of such Capital Securities of
the record date or the date such Distributions are payable].
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Corporation maintained for
that purpose in [insert Place of Payment], 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 [if applicable, insert--; provided, however, that at
the option of the Corporation payment of interest may be made (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Securities Register, or (ii) by wire transfer in immediately
available funds at such place and to such account as may be designated by the
Person entitled thereto as specified in the Securities Register].
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<PAGE> 29
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on such Holder's behalf to
take such actions as may be necessary or appropriate to effectuate the
subordination so provided, and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by such
Holder's acceptance hereof, waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, 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 Security 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 referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed under its corporate seal.
THE COLONIAL BANCGROUP, INC.
By:
------------------------------------
Name:
Title:
Attest:
- ---------------------------------------
[Secretary or Assistant Secretary]
SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "Securities"), issued and to be issued in one or
more series under the Junior Subordinated Indenture, dated as of January 29,
1997 (herein called the "Indenture"), between the Corporation and Wilmington
Trust Company, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations
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<PAGE> 30
of rights, duties and immunities thereunder of the Corporation, the Trustee, the
holders of Senior Indebtedness and the Holders of the Securities, and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof [if applicable,
insert--, limited in aggregate principal amount to $ ___________].
All terms used in this Security that are defined in the Indenture [if
applicable, insert--or in the Amended and Restated Trust Agreement, dated as of
________, __ (as modified, amended or supplemented from time to time, the "Trust
Agreement"), relating to [insert name of Issuer Trust] (the "Issuer Trust")
among the Corporation, as Depositor, the Trustees named therein and the Holders
from time to time of the Trust Securities issued pursuant thereto,] shall have
the meanings assigned to them in the Indenture [if applicable, insert--or the
Trust Agreement, as the case may be].
[If applicable, insert--The Corporation may at any time, at its option,
on or after _______, __ and subject to the terms and conditions of Article XI of
the Indenture, redeem this Security in whole at any time or in part from time to
time, at the following Redemption Prices (expressed as percentages of the
principal amount hereof): If redeemed during the 12-month period beginning
__________,
Redemption
Year Price
and thereafter at a Redemption Price equal to 100% of the principal amount
hereof, together, in the case of any such redemption, with accrued interest [if
applicable, insert-- (including any Additional Interest)] to but excluding the
date fixed for redemption.]
[If applicable, insert--In addition, upon the occurrence and during the
continuation of a Tax Event, an Investment Company Event or a Capital Treatment
Event in respect of the Issuer Trust, the Corporation may, at its option, at any
time within 90 days of the occurrence and during the continuation of such Tax
Event, Investment Company Event or Capital Treatment Event, as the case may be,
redeem this Security, in whole but not in part, subject to the terms and
conditions of Article XI of the Indenture, at a Redemption Price equal to
[insert formula].
[If the Security is subject to redemption of any kind, insert--In the
event of redemption of this Security in part only, a new Security or Securities
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.]
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<PAGE> 31
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Corporation with
certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Corporation and the Trustee at any time to enter into a supplemental indenture
or indentures for the purpose of modifying in any manner the rights and
obligations of the Corporation and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Corporation 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 Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
[If the Security is not a Discount Security, insert--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare the principal amount of all the Outstanding Securities of
this series to be due and payable immediately, by a notice in writing to the
Corporation (and to the Trustee if given by Holders) [if applicable, insert--,
provided that, if upon an Event of Default, the Trustee or such Holders fail to
declare the principal of all the Outstanding Securities of this series to be
immediately due and payable, the holders of at least 25% in aggregate
Liquidation Amount of the Capital Securities then Outstanding shall have the
right to make such declaration by a notice in writing to the Corporation and the
Trustee]; and upon any such declaration the principal of and the accrued
interest (including any Additional Interest) on all the Securities of this
series shall become immediately due and payable, provided that the payment of
such principal and interest (including any Additional Interest) on such
Securities shall remain subordinated to the extent provided in Article XIII of
the Indenture.]
[If the Security is a Discount Security, insert--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare an amount of principal of the Outstanding Securities of this
series to be due and payable immediately, by a notice in writing to the
Corporation (and to the Trustee if given by Holders) [if applicable, insert--,
provided that, if upon an Event of Default, the Trustee or such Holders fail to
declare such principal amount of the Outstanding Securities of this series to be
immediately due
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<PAGE> 32
and payable, the holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Corporation and the Trustee]. The
principal amount payable upon such acceleration shall be equal to [insert
formula for determining the amount]. Upon any such declaration, such amount of
the principal of and the accrued interest (including any Additional Interest) on
such Securities shall become immediately due and payable, provided that the
payment of such principal and interest (including any Additional Interest) on
such Securities shall remain subordinated to the extent provided in Article XIII
of the Indenture. Upon payment (i) of the amount of principal so declared due
and payable and (ii) of interest on any overdue principal, premium and interest
(in each case to the extent that the payment of such interest shall be legally
enforceable), all of the Corporation's obligations in respect of the payment of
the principal of and premium and interest, if any, on this Security shall
terminate.]
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest [if applicable, insert--(including any Additional Interest)]
on this Security 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 Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Corporation maintained under Section 10.2 of the
Indenture for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Corporation and the
Securities Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Securities of
this series, of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $_______ and any integral multiple of $_____
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Corporation 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 Security for registration of transfer,
the Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be
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<PAGE> 33
overdue, and neither the Corporation, the Trustee nor any such agent shall be
affected by notice to the contrary.
The Corporation and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States Federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
SECTION 2.4. Additional Provisions Required in Global Security.
Unless otherwise specified as contemplated by Section 3.1, any Global
Security issued hereunder shall, in addition to the provisions contained in
Sections 2.2 and 2.3, bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE 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,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 2.5. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated:
WILMINGTON TRUST COMPANY,
as Trustee
By:
------------------------------
Authorized Officer
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<PAGE> 34
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth or determined in the manner provided in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of a series:
(a) the title of the securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of
the Securities of such series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Section 3.4, 3.5, 3.6, 3.7,
9.6 or 11.6 and except for any Securities that, pursuant to Section
3.3, are deemed never to have been authenticated and delivered
hereunder); provided, however, that the authorized aggregate principal
amount of such series may be increased above such amount by a Board
Resolution to such effect;
(c) the Person to whom any interest (including any Additional
Interest) on a Security of the series shall be payable, if other than
the Person in whose name that security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date for such interest;
(d) the Stated Maturity or Maturities on which the principal
of the Securities of such series is payable or the method of
determination thereof, and any dates on which or circumstances under
which, the Corporation shall have the right to extend or shorten such
Stated Maturity or Maturities;
(e) the rate or rates, if any, at which the Securities of such
series shall bear interest, if any, the rate or rates at which and
extent to which Additional Interest, if any, shall be payable in
respect of any Securities of such series, the date or dates from which
any such interest or Additional Interest shall accrue, the Interest
Payment Dates on which such interest shall be payable, the right,
pursuant to Section 3.12 or as otherwise set forth therein, of the
Corporation to defer or extend an Interest Payment Date, and the
Regular
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<PAGE> 35
Record Date for the interest payable on any Interest Payment Date or
the method by which any of the foregoing shall be determined;
(f) the place or places where the principal of (and premium,
if any) and interest (including any Additional Interest) on the
Securities of such series shall be payable, the place or places where
the Securities of such series may be presented for registration of
transfer or exchange, any restrictions that may be applicable to any
such transfer or exchange in addition to or in lieu of those set forth
herein, and the place or places where notices and demands to or upon
the Corporation in respect of the Securities of such series may be
made;
(g) the period or periods within or the date or dates on
which, the price or prices at which and the terms and conditions upon
which, if any, the Securities of such series may be redeemed, in whole
or in part, at the option of the Corporation, and if other than by a
Board Resolution, the manner in which any election by the Corporation
to redeem such Securities shall be evidenced;
(h) the obligation or the right, if any, of the Corporation to
redeem, repay or purchase the Securities of such series pursuant to any
sinking fund, amortization or analogous provisions, or at the option of
a Holder thereof, and the period or periods within which, the price or
prices at which, the currency or currencies (including currency unit or
units) in which and the other terms and conditions upon which
Securities of the series shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligation;
(i) the denominations in which any Securities of such series
shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof;
(j) if other than Dollars, the currency or currencies
(including any currency unit or units) in which the principal of (and
premium, if any) and interest (including any Additional Interest) on
the Securities of the series shall be payable, or in which the
Securities of the series shall be denominated and the manner of
determining the equivalent thereof in Dollars for purposes of the
definition of Outstanding;
(k) the additions, modifications or deletions, if any, in the
covenants of the Corporation set forth herein with respect to the
Securities of such series;
(l) if other than the principal amount thereof, the portion of
the principal amount of Securities of such series that shall be payable
upon declaration of acceleration of the Maturity thereof;
(m) if the principal amount payable at the Stated Maturity of
any Securities of the series will not be determinable as of any one or
more dates prior to the Stated Maturity,
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<PAGE> 36
the amount that shall be deemed to be the principal amount of such
Securities as of any such date for any purpose thereunder or hereunder,
including the principal amount thereof that shall be due and payable
upon any Maturity other than the Stated Maturity or that shall be
deemed to be Outstanding as of any date prior to the Stated Maturity
(or, in any such case, the manner in which such amount deemed to be the
principal amount shall be determined);
(n) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary to
permit or facilitate the issuance of the Securities of such series in
bearer form, registrable or not registrable as to principal, and with
or without interest coupons;
(o) any index or indices used to determine the amount of
payments of principal of and premium, if any, on the Securities of such
series or the manner in which such amounts will be determined;
(p) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective Depositaries for such
Global Securities, the form of any legend or legends that shall be
borne by any such Global Security in addition to or in lieu of that set
forth in Section 2.4 and any circumstances in addition to or in lieu of
those set forth in Section 3.5 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any
transfer of such Global Security in whole or in part may be registered,
in the name or names of Persons other than the Depositary for such
Global Security or a nominee thereof;
(q) the appointment of any Paying Agent or Agents for the
Securities of such series;
(r) the terms of any right to convert or exchange Securities
of such series into any other securities or property of the
Corporation, and the additions or changes, if any, to this Indenture
with respect to the Securities of such series to permit or facilitate
such conversion or exchange;
(s) if such Securities are to be issued to an Issuer Trust,
the form or forms of the Trust Agreement and Guarantee Agreement
relating thereto;
(t) if other than as set forth herein, the relative degree, if
any, to which the Securities of the series shall be senior to or be
subordinated to other series of Securities in right of payment, whether
such other series of Securities are Outstanding or not;
(u) the additions, modifications or deletions, if any, in the
Events of Default that apply to any Securities of the series and any
change in the right of the Trustee or the
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<PAGE> 37
requisite Holders of such Securities to declare the principal amount
thereof due and payable pursuant to Section 5.2 and
(v) any other terms of the Securities of such series (which
terms shall not be inconsistent with the provisions of this Indenture,
except as permitted by Section 9.1(6)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth, or determined in the manner
provided, in such Officers' Certificate or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Corporation
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XIII.
SECTION 3.2. Denominations.
The Securities of each series shall be in registered form without
coupons and shall be issuable in denominations of $100,000 and any integral
multiple of $1,000 in excess thereof, unless otherwise specified as contemplated
by Section 3.1.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Corporation by its
Chairman of the Board, one of its Vice Chairman of the Board, its President or
one of its Executive Vice Presidents, under its corporate seal reproduced or
impressed thereon and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Corporation shall bind the
Corporation, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities. At any time and from
time to time after the execution and delivery of this Indenture, the Corporation
may deliver Securities of any series executed by the Corporation to the Trustee
for authentication, together with a Corporation Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Corporation
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
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<PAGE> 38
Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 2.1, that such
form has been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 3.1, that such
terms have been established in conform-
ity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Corporation in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Corporation, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issuance of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner that
is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraphs, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Corporation Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraphs at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. Notwithstanding the foregoing, if any Security shall have
been authenticated and delivered hereunder but never issued and sold by the
Corporation, and the Corporation shall deliver such Security to the Trustee for
cancellation as provided in Section 3.10, for all purposes of this
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<PAGE> 39
Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Corporation may execute, and upon Corporation Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Securities of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Corporation will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Corporation designated for that
purpose without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities, the Corporation shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series of any authorized denominations, of like tenor and
aggregate principal amount, bearing such restrictive legends as may be required
by this Indenture and bearing a number not contemporaneously outstanding. Until
so exchanged, the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
SECTION 3.5. Global Securities.
(a) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Corporation for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee in writing that such
Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Security, and the
Corporation is unable to locate a qualified successor, (ii) the Corporation
executes and delivers to the Trustee a Corporation Order stating that the
Corporation elects to terminate the book-entry system through such Depositary or
(iii) an Event of Default has occurred and is continuing. Upon the occurrence of
any event specified in clause (i), (ii) or (iii) above, the Securities Registrar
shall notify the applicable Depositary and instruct
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such Depositary to notify all beneficial owners of Global Securities of the
occurrence of such event and of the availability of the definitive Securities to
beneficial owners of such Securities requesting the same; provided, however,
that no Securities shall be issued in any denomination less than the minimum
authorized denomination therefor.
(c) If any Global Security is to be exchanged in whole for other
Securities or canceled in whole, it shall be surrendered by or on behalf of the
applicable Depositary or its nominee to the Securities Registrar for exchange or
cancellation as provided in this Article III. If any Global Security is to be
exchanged for other Securities or canceled in part, or if another Security is to
be exchanged in whole or in part for a beneficial interest in any Global
Security, then either (i) such Global Security shall be so surrendered for
exchange or cancellation as provided in this Article III or (ii) the principal
amount thereof shall be reduced, subject to Section 3.6(b)(v), or increased by
an amount equal to the portion thereof to be so exchanged or canceled, or equal
to the principal amount of such other Security to be so exchanged for a
beneficial interest therein, as the case may be, by means of an appropriate
adjustment made on the records of the Securities Registrar with notice to the
Trustee, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct such Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security by the Depositary, accompanied by registration
instructions, the Trustee shall, subject to Section 3.5(b) and as otherwise
provided in this Article III, authenticate and deliver any Securities issuable
in exchange for such Global Security (or any portion thereof) in accordance with
the instructions of the Depositary; provided, however, that no Securities shall
be issued in any denomination less than the minimum authorized denomination
therefor. Neither the Securities Registrar nor the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be fully protected in relying on, such instructions.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article III, Section 9.6 or 11.6 or otherwise,
shall be authenticated and delivered in the form of, and shall be, a Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof.
(e) Securities distributed to holders of Book-Entry Capital Securities
(as defined in the applicable Trust Agreement) upon the dissolution of an Issuer
Trust shall be distributed in the form of one or more Global Securities
registered in the name of a Depositary or its nominee, and deposited with the
Securities Registrar, as custodian for such Depositary, or with such Depositary,
for credit by the Depositary to the respective accounts of the beneficial owners
of the Securities represented thereby (or such other accounts as they may
direct). Securities distributed to holders of Capital Securities other than
Book-Entry Capital Securities upon the dissolution of an Issuer Trust shall not
be issued in the form of a Global Security or any other form intended to
facilitate book-entry trading in beneficial interests in such Securities.
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(f) As provided in Section 3.9, the Depositary for a Global Security or
its nominee, as the registered owner of a Global Security, shall be the Holder
of such Global Security for all purposes under this Indenture and the
Securities, and owners of beneficial interests in a Global Security shall hold
such interests pursuant to the Applicable Procedures. The Securities Registrar
and the Trustee shall be entitled to deal with the Depositary for such Global
Security for all purposes of this Indenture relating to the Global Security
(including the payment of the principal amount of (and premium, if any) and
interest (including Additional Interest) on such Global Security and the giving
of instructions or directions by or to beneficial owners of the Securities
represented thereby) as the sole Holder of the Securities represented thereby
and shall have no obligation to such beneficial owners. Neither the Corporation,
the Trustee nor the Securities Registrar shall have any liability in respect of
any transfers effected by the Depositary.
(g) The rights of owners of beneficial interests in a Global Security
shall be exercised only through the Depositary for such Global Security and
shall be limited to those established by law, the Applicable Procedures and
agreements between such beneficial owners and the Depositary and/or its Agent
Members.
SECTION 3.6. Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges; Securities Act Legends.
(a) The Corporation shall cause to be kept at the Corporate Trust
Office of the Trustee a register or registers (the "Securities Register") in
which the registrar and transfer agent with respect to the Securities (the
"Securities Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Securities and of transfers and
exchanges of Securities as herein provided. The Trustee is hereby appointed
Securities Registrar for the purpose of registering Securities and transfers and
exchanges of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Corporation designated for that purpose, the Corporation
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations, of like tenor and aggregate principal
amount, bearing such restrictive legends as may be required by this Indenture
and bearing a number not contemporaneously outstanding.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of like tenor and
aggregate principal amount, bearing such restrictive legends as may be required
by this Indenture and bearing a number not contemporaneously outstanding, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Corporation shall execute,
and the Trustee shall authenticate and deliver, the Securities that the Holder
making the exchange is entitled to receive.
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All Securities issued upon any transfer or exchange of Securities shall
be the valid obligations of the Corporation, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Neither the Corporation, the Trustee nor the Securities Registrar shall
be required, pursuant to the provisions of this Section 3.6, (i) to issue,
register the transfer of or exchange any Security of any series during a period
beginning at the opening of business 15 days before the day of selection for
redemption of Securities of that series pursuant to Article XI and ending at the
close of business on the day of mailing of the notice of redemption, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except, in the case of any such Security to be redeemed in
part, any portion thereof not to be redeemed.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Corporation or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Corporation and the Securities Registrar, duly executed by
the Holder thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Securities, but the Corporation may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Securities.
(b) Notwithstanding any other provision of this Indenture, transfers
and exchanges of Securities and beneficial interests in a Global Security shall
be made only in accordance with this Section 3.6(b).
(i) Non-Global Security to Global Security. If the Holder of a
Security (other than a Global Security) wishes at any time to transfer
all or any portion of such Security to a Person who wishes to take
delivery thereof in the form of a beneficial interest in a Global
Security, such transfer may be effected only in accordance with the
provisions of this Clause (b)(i) and subject to the Applicable
Procedures. Upon receipt by the Securities Registrar of (A) such
Security as provided in Section 3.6(a) and instructions satisfactory to
the Securities Registrar directing that a beneficial interest in the
Global Security in a specified principal amount not greater than the
principal amount of such Security be credited to a specified Agent
Member's account and (B) if the Security to be transferred in whole or
in part is a Restricted Security, a Restricted Securities Certificate
duly executed by such Holder or such Holder's attorney duly authorized
in writing, then the Securities Registrar shall cancel such Security
(and issue a new Security in respect of any untransferred portion
thereof) as provided in Section 3.6(a) and increase the aggregate
principal amount of the Global Security by the specified principal
amount so transferred as provided as provided in Section 3.5(c).
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(ii) Non-Global Security to Non-Global Security. A Security
that is not a Global Security may be transferred, in whole or in part,
to a Person who takes delivery in the form of another Security that is
not a Global Security as provided in Section 3.6(a), provided that if
the Security to be transferred in whole or in part is a Restricted
Security, the Securities Registrar shall have received a Restricted
Securities Certificate duly executed by the transferor Holder or such
Holder's attorney duly authorized in writing.
(iii) Global Security to Non-Global Security. A beneficial
interest in a Global Security may be exchanged for a Security that is
not a Global Security as provided in Section 3.5.
(iv) Certain Initial Transfers of Non-Global Securities. In
the case of Securities initially issued other than in global form, an
initial transfer or exchange of such Securities that does not involve
any change in beneficial ownership may be made to an Institutional
Accredited Investor or Investors as if such transfer or exchange were
not an initial transfer or exchange; provided that written
certification shall be provided by the transferee and transferor of
such Securities to the Securities Registrar that such transfer or
exchange does not involve a change in beneficial ownership.
(v) Limitations Relating to Principal Amount. Notwithstanding
any other provision of this Indenture, Securities or portions thereof
may be transferred or exchanged only in principal amounts of not less
than the minimum authorized denomination therefor, and only if,
following such transfer or exchange, each Holder would hold Securities
with a principal amount of not less than such minimum authorized
denomination. Any transfer, exchange or other disposition of Securities
in contravention of this Section 3.6(b)(v) shall be deemed to be void
and of no legal effect whatsoever, any such transferee shall be deemed
not to be the Holder or owner of any beneficial interest in such
Securities for any purpose, including but not limited to the receipt of
interest (including any Additional Interest) payable on such
Securities, and such transferee shall be deemed to have no interest
whatsoever in such Securities.
(c) Except as set forth below, all Securities shall bear a Restricted
Securities Legend:
(i) subject to the following Clauses of this Section 3.6(c), a
Security or any portion thereof that is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Restricted Securities Legend;
(ii) subject to the following Clauses of this Section 3.6(c),
a new Security that is not a Global Security and is issued in exchange
for another Security (including a Global Security) or any portion
thereof, upon transfer or otherwise, shall bear a Restricted Securities
Legend;
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(iii) a new Security that does not bear a Restricted
Securities Legend may be issued in exchange for or in lieu of a
Restricted Security or any portion thereof that bears such a legend if,
in the Corporation's sole judgment, placing such a legend upon such new
Security is not and will not be necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the written direction of the Corporation in the form of an Officers'
Certificate, shall authenticate and deliver such a new Security as
provided in this Article III;
(iv) any Securities that are sold or otherwise disposed of
pursuant to an effective registration statement under the Securities
Act such that such Securities are freely transferable by the holders
thereof shall not bear a Restricted Securities Legend;
(v) notwithstanding the foregoing provisions of this Section
3.6(c), a Successor Security of a Security that does not bear a
Restricted Securities Legend shall not bear such form of legend unless,
in the Corporation's sole judgement such Successor Security is a
"restricted security" within the meaning of Rule 144 under the
Securities Act, in which case the Trustee, at the written direction of
the Corporation in the form of an Officers' Certificate, shall
authenticate and deliver a new Security bearing a Restricted Securities
Legend in exchange for such Successor Security as provided in this
Article III; and
(vi) Securities distributed to a holder of Capital Securities
upon dissolution of an Issuer Trust shall bear a Restricted Securities
Legend if the Capital Securities so held bear a similar legend.
The Corporation shall inform the Trustee in writing of the effective
date of any registration statement registering any Securities under the
Securities Act. The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the aforementioned
registration statement.
SECTION 3.7. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Corporation or the Trustee
to save each of them harmless, the Corporation shall execute and the Trustee
shall authenticate and deliver in exchange therefor a new Security of the same
series, of like tenor and aggregate principal amount, bearing the same legends,
and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Corporation and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Corporation or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Corporation shall execute and upon its request the Trustee shall authenticate
and deliver, in lieu
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of any such destroyed, lost or stolen Security, a new Security of the same
series, of like tenor and aggregate principal amount, bearing the same legends
as such destroyed, lost or stolen Security, and bearing a number not
contemporaneously outstanding.
If any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Corporation in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section 3.7, the
Corporation may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Corporation, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to the same benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section 3.7 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.8. Payment of Interest and Additional Interest; Interest
Rights Preserved.
Interest (including any Additional Interest) on any Security of any
series that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date, shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest in respect of Securities of such
series, except that, unless otherwise provided in the Securities of such series,
interest (including any Additional Interest) payable on the Stated Maturity of
the principal of a Security shall be paid to the Person to whom principal is
paid. The initial payment of interest on any Security of any series that is
issued between a Regular Record Date and the related Interest Payment Date shall
be payable as provided in such Security or in the Board Resolution pursuant to
Section 3.1 with respect to the related series of Securities.
Any interest on any Security that is due and payable, but is not timely
paid or duly provided for, on any Interest Payment Date for Securities of such
series (herein called "Defaulted Interest"), shall forthwith cease to be payable
to the registered Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Corporation, at
its election in each case, as provided in Clause (1) or (2) below:
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(1) The Corporation may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series in
respect of which interest is in default (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Corporation shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to
be paid on each Security and the date of the proposed payment, and at
the same time the Corporation shall deposit with the Trustee an amount
of money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as provided in this Clause
(1). Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest, which shall be not more than 15
days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Corporation of such Special Record Date and, in the name and at the
expense of the Corporation, shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of a Security of
such series at the address of such Holder as it appears in the
Securities Register not less than 10 days prior to such Special Record
Date. The Trustee may, in its discretion, in the name and at the
expense of the Corporation, cause a similar notice to be published at
least once in a newspaper, customarily published in the English
language on each Business Day and of general circulation in the Borough
of Manhattan, The City of New York, but such publication shall not be a
condition precedent to the establishment of such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities)
are registered on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Corporation may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of the series in
respect of which interest is in default may be listed and, upon such
notice as may be required by such exchange (or by the Trustee if the
Securities are not listed), if, after notice given by the Corporation
to the Trustee of the proposed payment pursuant to this Clause (2),
such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.8, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Security.
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SECTION 3.9. Persons Deemed Owners.
The Corporation, the Trustee and any agent of the Corporation or the
Trustee shall treat the Person in whose name any Security is registered as the
owner of such Security for the purpose of receiving payment of principal of and
(subject to Section 3.8) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Corporation, the Trustee nor any agent of the Corporation or the Trustee shall
be affected by notice to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Corporation,
the Trustee and any agent of the Corporation or the Trustee as the owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Corporation, the Trustee or any agent of the
Corporation or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by a Depositary or impair, as between a
Depositary and such holders of beneficial interests, the operation of customary
practices governing the exercise of the rights of the Depositary (or its
nominee) as Holder of any Security.
SECTION 3.10. Cancellation.
All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Corporation may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder that the Corporation
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section 3.10, except as expressly permitted by this Indenture. All canceled
Securities shall be destroyed by the Trustee and the Trustee shall deliver to
the Corporation a certificate of such destruction.
SECTION 3.11. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
partial period shall be computed on the basis of a 360-day year of twelve 30-day
months and the actual number of days elapsed in any partial month in such
period, and interest on the Securities of each series for a full period shall be
computed by dividing the rate per annum by the number of interest periods that
together constitute a full twelve months.
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SECTION 3.12. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, the Corporation shall have the right, at any time
during the term of such series, from time to time to defer the payment of
interest on such Securities for such period or periods as may be specified as
contemplated by Section 3.1 (each, an "Extension Period"), during which
Extension Periods the Corporation shall, if so specified as contemplated by
Section 3.1, have the right to make partial payments of interest (including any
Additional Interest) on any Interest Payment Date. No Extension Period shall end
on a date other than an Interest Payment Date. At the end of any such Extension
Period the Corporation shall pay all interest then accrued and unpaid on the
Securities (together with Additional Interest thereon, if any, at the rate
specified for the Securities of such series, to the extent permitted by
applicable law); provided, however, that no Extension Period shall extend beyond
the Stated Maturity of the principal of the Securities of such series; and
provided further, however that during any such Extension Period, the Corporation
shall not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Corporation's capital stock, or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation that rank pari passu in all respects with or
junior in interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Corporation
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Corporation's capital stock (or any capital stock
of a Subsidiary of the Corporation) for any class or series of the Corporation's
capital stock or of any class or series of the Corporation's indebtedness for
any class or series of the Corporation's capital stock, (c) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection
with any Rights Plan, or the issuance of rights, stock or other property under
any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or
(e) any dividend in the form of stock, warrants, options or other rights where
the dividend stock or the stock issuable upon exercise of such warrants, options
or other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of
interest, provided that no Event of Default has occurred and is continuing, and
provided further that no Extension Period shall exceed the period or periods
specified in such Securities, extend beyond the Stated Maturity of the principal
of such Securities or end on a date other than an Interest Payment Date. Upon
the termination of any such Extension Period and upon the payment of all accrued
and unpaid interest (including any Additional Interest) then due on any
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Interest Payment Date, the Corporation may elect to begin a new Extension
Period, subject to the above conditions. No interest (including any Additional
Interest) shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due and
payable during such Extension Period shall bear Additional Interest as and to
the extent as may be specified as contemplated by Section 3.1. The Corporation
shall give the Holders of the Securities of such series and the Trustee notice
of its election to begin any such Extension Period at least one Business Day
prior to the next succeeding Interest Payment Date on which interest on
Securities of such series would be payable but for such deferral or, with
respect to any Securities of a series issued to an Issuer Trust, so long as any
such Securities are held by such Issuer Trust, at least one Business Day prior
to the earlier of (i) the next succeeding date on which Distributions on the
Capital Securities of such Issuer Trust would be payable but for such deferral,
and (ii) the date on which the Property Trustee of such Issuer Trust is required
to give notice to holders of such Capital Securities of the record date or the
date such Distributions are payable.
The Trustee shall promptly give notice of the Corporation's election to
begin any such Extension Period to the Holders of the Outstanding Securities of
such series.
SECTION 3.13. Right of Set-Off.
With respect to the Securities of a series initially issued to an
Issuer Trust, notwithstanding anything to the contrary herein, the Corporation
shall have the right to set off any payment it is otherwise required to make in
respect of any such Security to the extent the Corporation has theretofore made,
or is concurrently on the date of such payment making, a payment under the
Guarantee Agreement relating to such Security or to a holder of Capital
Securities pursuant to an action undertaken under Section 5.8 of this Indenture.
SECTION 3.14. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Corporation and,
by its acceptance of a Security or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial interest in, such Security agree that
for United States federal, state and local tax purposes it is intended that such
Security constitutes indebtedness.
SECTION 3.15. Shortening or Extension of Stated Maturity.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, the Corporation shall have the right
to (i) shorten the Stated Maturity of the principal of the Securities of such
series at any time to any date, and (ii) extend the Stated Maturity of the
principal of the Securities of such series at any time at its election for one
or more periods, provided that, if the Corporation elects to exercise its right
to extend the Stated Maturity of the principal of the Securities of such series
pursuant to Clause (ii) above of this Section 3.15, at the
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time such election is made and at the time of extension, such conditions as may
be specified in such Securities shall have been satisfied.
SECTION 3.16. CUSIP Numbers.
The Corporation in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption and other similar or related materials as a convenience to
Holders; provided that any such notice or other materials may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or other materials
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Corporation Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and as otherwise provided
in this Section 4.1) and the Trustee, on demand of and at the expense of the
Corporation, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities that have been destroyed,
lost or stolen and that have been replaced or paid as provided
in Section 3.7 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Corporation and thereafter repaid to the
Corporation or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
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(ii) will become due and payable at their
Stated Maturity within one year of the date of
deposit, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Corporation,
and the Corporation, in the case of subclause (B)(i), (ii) or (iii)
above, has deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount in the currency or
currencies in which the Securities of such series are payable
sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation,
for principal (and premium, if any) and interest (including any
Additional Interest) to the date of such deposit (in the case of
Securities that have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be;
(2) the Corporation has paid or caused to be paid all other
sums payable hereunder by the Corporation; and
(3) the Corporation has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Corporation to the Trustee under Section 6.7, the obligations
of the Trustee to any Authenticating Agent under Section 6.14 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of Clause
(1) of this Section 4.1, the obligations of the Trustee under Section 4.2 and
the last paragraph of Section 10.3 shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Corporation acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest (including any Additional Interest) for the payment of which
such money or obligations have been deposited with or received by the Trustee.
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ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body), except as may be specified pursuant to Section 3.1:
(1) default in the payment of any interest (including any
Additional Interest) upon any Security of that series when it becomes
due and payable, and continuance of such default for a period of 30
days (subject to the deferral of any due date in respect of any
interest (including Additional Interest) in the case of an Extension
Period); or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or
(3) failure on the part of the Corporation duly to observe or
perform any other of the covenants or agreements on the part of the
Corporation in the Securities of that series or in this Indenture for a
period of 90 days after the date on which written notice of such
failure, requiring the Corporation to remedy the same, shall have been
given to the Corporation by the Trustee by registered or certified mail
or to the Corporation and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that
series; or
(4) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Corporation a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization of the Corporation under the Bankruptcy Code or any
other similar applicable Federal or State law, which decree or order
shall have continued undischarged and unstayed for a period of 60 days;
or the entry of a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of the Corporation or of its
property, or for the winding up or liquidation of its affairs, which
decree or order shall have continued undischarged and unstayed for a
period of 60 days; or
(5) the commencement by the Corporation of voluntary
proceedings to be adjudicated a bankrupt, or the consent by the
Corporation to the filing of a bankruptcy proceeding against it, or the
filing by the Corporation of a petition or answer or consent seeking
reorganization under the Bankruptcy Code or any other similar Federal
or State
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law, or the consent by the Corporation to the filing of any such
petition, or the consent by the Corporation to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of it or of its property, or the making by the Corporation
of an assignment for the benefit of creditors, or the admission by the
Corporation in writing of its inability to pay its debts generally as
they become due; or
(6) any other Event of Default provided with respect to
Securities of that series.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.1(4) or 5.1(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Corporation (and to the Trustee if given by Holders), provided
that, in the case of the Securities of a series issued to an Issuer Trust, if,
upon an Event of Default, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of such series fail to declare
the principal of all the Outstanding Securities of such series (or specified
portion thereof) to be immediately due and payable, the holders of at least 25%
in aggregate Liquidation Amount (as defined in the related Trust Agreement) of
the related series of Capital Securities issued by such Issuer Trust then
outstanding shall have the right to make such declaration by a notice in writing
to the Corporation and the Trustee; and upon any such declaration such principal
amount (or specified portion thereof) of and the accrued interest (including any
Additional Interest) on all the Securities of such series shall become
immediately due and payable. If an Event of Default specified in Section 5.1(4)
or 5.1(5) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of such series (or, if the
Securities of such series are Discount Securities, such portion of the principal
amount of such Securities as may be specified by the terms of that series) and
the accrued interest (including any Additional Interest) on all the Securities
of such series shall automatically, and without any declaration or other action
on the part of the Trustee or any Holder, become immediately due and payable.
Payment of principal (and premium, if any) and interest (including any
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article XIII notwithstanding that such amount shall become
immediately due and payable as herein provided.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article V provided, the Holders of a majority in aggregate principal amount of
the Outstanding Securities of that series, by written notice to the Corporation
and the Trustee, may rescind and annul such declaration and its consequences if:
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(1) the Corporation has paid or deposited with the Trustee a
sum sufficient to pay:
(A) all overdue installments of interest on all
Securities of such series,
(B) any accrued Additional Interest on all Securities
of such series,
(C) the principal of (and premium, if any, on) any
Securities of such series that have become due otherwise than
by such declaration of acceleration, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.13.
In the case of Securities of a series initially issued to an Issuer
Trust, if the Holders of such Securities fail to annul such declaration and
waive such default, the holders of a Majority in Liquidation Amount of the
Capital Securities (as defined in the related Trust Agreement) issued by such
Issuer Trust shall also have the right to rescind and annul such declaration and
its consequences by written notice to the Corporation and the Trustee, subject
to the satisfaction of the conditions set forth in Clauses (1) and (2) above of
this Section 5.2.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Corporation covenants that if:
(1) default is made in the payment of any installment of
interest (including any Additional Interest) on any Security of any
series when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Corporation will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal (and premium, if any), including any sinking
fund payment or analogous obligations, and interest
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(including any Additional Interest), and, in addition thereto, all amounts owing
to the Trustee under Section 6.7.
If the Corporation fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Corporation or any other obligor upon such
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Corporation or any other
obligor upon the Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Corporation or any other obligor upon the Securities
or the property of the Corporation or of such other obligor or their creditors,
(a) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Corporation for the
payment of overdue principal (or premium, if any) or interest
(including any Additional Interest)) shall be entitled and empowered,
by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest (including any
Additional Interest) owing and unpaid in respect of the
Securities and to file such other papers or documents as may
be necessary or advisable and to take any and all actions as
are authorized under the Trust Indenture Act in order to have
the claims of the Holders and any predecessor to the Trustee
under Section 6.7 allowed in any such judicial proceedings;
and
(2) in particular, the Trustee shall be authorized to
collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same in
accordance with Section 5.6; and
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(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial
proceeding is hereby authorized by each Holder to make such payments to
the Trustee for distribution in accordance with Section 5.6, and in the
event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it and
any predecessor Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.5. Trustee May Enforce Claim Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, subject to
Article XIII and after provision for the payment of all the amounts owing the
Trustee and any predecessor Trustee under Section 6.7, its agents and counsel,
be for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities pursuant to this Article V shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money or property on account of principal (or premium,
if any) or interest (including any Additional Interest), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts
then due and unpaid upon Securities of such series for principal (and
premium, if any) and interest (including any Additional Interest) in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such series of Securities
for principal (and premium, if any) and interest (including any
Additional Interest), respectively; and
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THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 5.7. Limitation on Suits.
Subject to Section 5.8, no Holder of any Securities of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture or for the appointment of a receiver, assignee, trustee,
liquidator or sequestrator (or other similar official) or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest; Direct Action by Holders of Capital Securities.
Notwithstanding any other provision in this Indenture, the Holder of
any Security of any series shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Sections 3.8 and 3.12) interest (including any Additional Interest)
on such Security on the respective Stated Maturities expressed in such Security
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder. In the case
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of Securities of a series issued to an Issuer Trust, any registered holder of
the series of Capital Securities issued by such Issuer Trust shall have the
right, upon the occurrence of an Event of Default described in Section 5.1(1) or
5.1(2), to institute a suit directly against the Corporation for enforcement of
payment to such holder of principal of (premium, if any) and (subject to
Sections 3.8 and 3.12) interest (including any Additional Interest) on the
Securities having a principal amount equal to the aggregate Liquidation Amount
(as defined in the related Trust Agreement) of such Capital Securities held by
such holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Capital Securities issued
by any Issuer Trust has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee, such Holder or such
holder of Capital Securities, then and in every such case the Corporation, the
Trustee, such Holders and such holder of Capital Securities shall, subject to
any determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee, such Holder and such holder of Capital Securities shall continue as
though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.7, no
right or remedy herein conferred upon or reserved to the Trustee or the Holders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Security or any
holder of any Capital Security to exercise any right or remedy accruing upon any
Event of Default with respect to the Securities of the related series shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Trustee
or to the Holders and the right and remedy given to the holders of Capital
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee, the Holders or the holders of Capital
Securities, as the case may be.
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SECTION 5.12. Control by Holders.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee
shall have the right to decline to follow such direction if a
Responsible Officer or Officers of the Trustee shall, in good faith,
determine that the proceeding so directed would be unjustly prejudicial
to the Holders not joining in any such direction or would involve the
Trustee in personal liability.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series affected thereby and, in the case of
any Securities of a series initially issued to an Issuer Trust, the holders of a
Majority in Liquidation Amount of the Capital Securities (as defined in the
related Trust Agreement) issued by such Issuer Trust may waive any past default
or Event of Default hereunder and its consequences with respect to such series
except a default:
(1) in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security of such
series (unless such default has been cured and the Corporation has paid
to or deposited with the Trustee a sum sufficient to pay all matured
installments of interest (including any Additional Interest) and all
principal of (and premium, if any, on) all Securities of that series
due otherwise than by acceleration), or
(2) in respect of a covenant or provision hereof that under
Article IX cannot be modified or amended without the consent of each
Holder of any Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of all
the Securities of such series or, in the case of a waiver by holders of Capital
Securities issued by such Issuer Trust, by the holders of all the Capital
Securities issued by such Issuer Trust.
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Upon any such waiver, such default or Event of Default shall cease to
exist, and any default or Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security,
by its acceptance thereof, shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.14 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder or group of Holders holding in the
aggregate more than 10% in aggregate principal amount of the Outstanding
Securities of any series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security on or after the respective
Stated Maturities expressed in such Security.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.
The Corporation covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Corporation (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
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(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
that by any provisions hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture.
(b) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct except that:
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section 6.1;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of Holders pursuant to Section 5.12 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of a
series.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
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(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 6.1.
SECTION 6.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Security of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of Securities of such series; and provided further,
however, that, in the case of any default of the character specified in Section
5.1(3), no such notice to Holders of Securities of such series shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section 6.2, the term "default" means any event that is, or after notice or
lapse of time or both would become, an Event of Default with respect to
Securities of such series.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, Security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Corporation mentioned herein shall
be sufficiently evidenced by a Corporation Request or Corporation Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
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(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in complying with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Corporation, and neither the Trustee nor any Authenticating Agent assumes
any responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Corporation of the Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Corporation, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Corporation with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent,
Securities Registrar or such other agent.
SECTION 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law (including the Trust
Indenture Act). The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Corporation.
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SECTION 6.7. Compensation and Reimbursement.
The Corporation agrees
(1) to pay to the Trustee from time to time such reasonable
compensation for all services rendered by it hereunder in such amounts
as the Corporation and the Trustee shall agree from time to time (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including
the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel) incurred without negligence, wilful misconduct or bad faith,
arising out of or in connection with the acceptance or administration
of this trust or the performance of its duties hereunder, including the
costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder. This indemnification shall survive the termination of
this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or 5.1(5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Code.
SECTION 6.8. Disqualification; Conflicting Interests.
(a) The Trustee for the Securities of any series issued hereunder shall
be subject to the provisions of Section 310(b) of the Trust Indenture Act.
Nothing herein shall prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of said Section 310(b).
(b) The Trust Agreement and the Guarantee Agreement with respect to
each Issuer Trust shall be deemed to be specifically described in this Indenture
for the purposes of clause (i) of the first proviso contained in Section 310(b)
of the Trust Indenture Act.
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be:
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(a) a corporation organized and doing business under the laws
of the United States of America or of any State or Territory thereof or
the District of Columbia, authorized under such laws to exercise
corporate trust powers and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority, or
(b) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as
Trustee pursuant to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate trust powers, and
subject to supervision or examination by authority of such foreign
government or a political subdivision thereof substantially equivalent
to supervision or examination applicable to United States institutional
trustees,
in either case having at the time of appointment securities rated in one of the
three highest rating categories by a nationally recognized statistical rating
organization and a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purposes of this Section 6.9 and to the extent permitted by the Trust
Indenture Act, 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. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.9, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article VI. Neither the Corporation nor any Person directly or indirectly
controlling, controlled by or under common control with the Corporation shall
serve as Trustee for the Securities of any series issued hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article VI shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Corporation. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Corporation.
(d) If at any time:
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(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Corporation or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and shall
fail to resign after written request therefor by the Corporation or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Corporation, acting pursuant to the authority of
a Board Resolution, may remove the Trustee with respect to the Securities of all
series issued hereunder, or (ii) subject to Section 5.14, any Holder who has
been a bona fide Holder of a Security for at least six months may, on behalf of
such Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to the Securities of
all series issued hereunder and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Corporation, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of such series delivered to the Corporation and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the Securities of such
series and supersede the successor Trustee appointed by the Corporation. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Corporation or the Holders and accepted appointment in the
manner hereinafter provided, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, subject to Section 5.14, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Corporation shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Securities of such series as their names and addresses appear in
the Securities Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
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SECTION 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Corporation and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Corporation or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Corporation,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Corporation or any successor Trustee,
such retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Corporation shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all
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rights, powers and trusts referred to in paragraph (a) or (b) of this Section
6.11, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article VI.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article VI,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. If any Securities shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated, and if any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against Corporation.
If and when the Trustee shall be or become a creditor of the
Corporation (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Corporation (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities, which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 3.7, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or to the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent or the Authenticating Agent's certificate of authentication
set forth for this Section 6.14. Each Authenticating Agent shall be acceptable
to the Corporation and shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any State or
Territory thereof or the District of Columbia, authorized
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under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 6.14 and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.14.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent, shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
qualified and eligible under this Section 6.14, without the execution or filing
of any paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Corporation. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Corporation. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14, the Trustee may appoint a successor
Authenticating Agent, which shall be acceptable to the Corporation and shall
give notice of such appointment in the manner provided in Section 1.6 to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provision of this Section 6.14.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.14, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made pursuant
to this Section 6.14, the Securities of such series may have endorsed thereon,
in addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred
to in the within mentioned Indenture.
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Dated: ___________________
WILMINGTON TRUST COMPANY,
as Trustee
By: ,
-----------------------------------
As Authenticating Agent
By:
-----------------------------------
Authorized Officer
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CORPORATION
SECTION 7.1. Corporation to Furnish Trustee Names and Addresses of
Holders.
The Corporation will furnish or cause to be furnished to the Trustee:
(a) semi-annually, on or before June 30 and December 31 of
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of a date not more than 15
days prior to the delivery thereof, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Corporation of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished,
in each case to the extent such information is in the possession or control of
the Corporation and has not otherwise been received by the Trustee in its
capacity as Securities Registrar.
SECTION 7.2. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
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(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by its acceptance thereof, agrees with
the Corporation and the Trustee that neither the Corporation nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act, at the times and in the manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than January 31 in each
calendar year, commencing with the first January 31 after the first issuance of
Securities under this Indenture.
(c) If this Indenture shall have been qualified under the Trust
Indenture Act, a copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each securities exchange
upon which any Securities are listed and also with the Commission. The
Corporation will notify the Trustee when any Securities are listed on any
securities exchange.
SECTION 7.4. Reports by Corporation.
The Corporation shall file with the Trustee and with the Commission,
and transmit to the Holders, such information, documents and other reports, and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided in the Trust Indenture Act; provided
that any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act shall be
filed with the Trustee within 15 days after the same is required to be filed
with the Commission. At any time when the Corporation is not subject to Section
13 or 15(d) of the Exchange Act, upon the request of a Holder or beneficial
owner of a Security, the Corporation shall promptly furnish Rule 144A
Information, or cause such information to be furnished, to such Holder or
beneficial owner or to a prospective purchaser of such Security designated by
such Holder or beneficial owner in order to permit compliance by such Holder or
beneficial owner with Rule 144A under the Securities Act in connection with the
resale of such Security by such Holder or beneficial owner; provided, however,
that the Corporation shall not be required to furnish such information at any
time to a prospective purchaser located outside the United States who is not a
"U.S. person" within the meaning of Regulation S under the Securities Act. The
Corporation also shall comply with the other provisions of Trust Indenture Act
Section 314(a), provided, however, that the Corporation
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shall be required, pursuant to this Section 7.4, to provide any document, report
or other information to the Commission only if this Indenture shall have been
qualified under the Trust Indenture Act.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Corporation May Consolidate, Etc., Only on Certain Terms.
The Corporation shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and no Person shall consolidate with or merge into
the Corporation or convey, transfer or lease its properties and assets
substantially as an entirety to the Corporation, unless:
(1) if the Corporation shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by
such consolidation or into which the Corporation is merged or the
Person that acquires by conveyance or transfer, or that leases, the
properties and assets of the Corporation substantially as an entirety
shall be a corporation, partnership or trust organized and existing
under the laws of the United States of America or any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest (including any
Additional Interest) on all the Securities of every series and the
performance of every covenant of this Indenture on the part of the
Corporation to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event that, after notice or lapse of time, or
both, would constitute an Event of Default, shall have occurred and be
continuing; and
(3) the Corporation has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture comply with this Article VIII and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and the Trustee, subject to Section 6.1, may
rely upon such Officers' Certificate and Opinion of Counsel as
conclusive evidence that such transaction complies with this Section
8.1.
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SECTION 8.2. Successor Corporation Substituted.
Upon any consolidation or merger by the Corporation with or into any
other Person, or any conveyance, transfer or lease by the Corporation of its
properties and assets substantially as an entirety to any Person in accordance
with Section 8.1, the successor corporation formed by such consolidation or into
which the Corporation is merged or to which such conveyance, transfer or lease
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Corporation under this Indenture with the same effect as if
such successor Person had been named as the Corporation herein; and in the event
of any such conveyance, transfer or lease, the Corporation shall be discharged
from all obligations and covenants under this Indenture and the Securities.
Such successor Person may cause to be executed, and may issue either in
its own name or in the name of the Corporation, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the
Corporation and delivered to the Trustee; and, upon the order of such successor
Person instead of the Corporation and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities that previously shall have been signed and
delivered by the officers of the Corporation to the Trustee for authentication
pursuant to such provisions and any Securities that such successor Person
thereafter shall cause to be executed and delivered to the Trustee on its behalf
for the purpose pursuant to such provisions. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture.
In case of any such consolidation, merger, conveyance, transfer or
lease, such changes in phraseology and form may be made in the Securities
thereafter to be issued as may be appropriate.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Corporation, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Corporation, and the assumption by any such successor of the covenants
of the Corporation contained herein and in the Securities contained; or
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(2) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee or to surrender any right or power
herein conferred upon the Corporation; or
(3) to establish the form or terms of Securities of any series
as permitted by Sections 2.1 or 3.1; or
(4) to add to the covenants of the Corporation for the benefit
of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of the series specified) or to surrender any
right or power herein conferred upon the Corporation; or
(5) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such additional
Events of Default are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are
expressly being included solely for the benefit of the series
specified); or
(6) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall (a)
become effective only when there is no Security Outstanding of any
series created prior to the execution of such supplemental indenture
that is entitled to the benefit of such provision or (b) not apply to
any Outstanding Securities; or
(7) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that such
action pursuant to this clause (7) shall not adversely affect the
interest of the Holders of Securities of any series in any material
respect or, in the case of the Securities of a series issued to an
Issuer Trust and for so long as any of the corresponding series of
Capital Securities issued by such Issuer Trust shall remain
outstanding, the holders of such Capital Securities; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 6.11(b); or
(9) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
Trust Indenture Act.
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SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series affected
by such supplemental indenture, by Act of said Holders delivered to the
Corporation and the Trustee, the Corporation, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security of each
series affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest (including any Additional Interest) on, any
Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or
reduce the amount of principal of a Discount Security that would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2, or change the place of payment where, or the
coin or currency in which, any Security or interest (including any
Additional Interest) thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section 9.2, Section
5.13 or Section 10.5, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Security
affected thereby;
provided further, however, that, in the case of Securities of a series issued to
an Issuer Trust, so long as any of the corresponding series of Capital
Securities issued by such Issuer Trust remains outstanding, (i) no such
amendment shall be made that adversely affects the holders of such Capital
Securities in any material respect, and no termination of this Indenture shall
occur, and no waiver of any Event of Default or compliance with any covenant
under this Indenture shall be effective, without the prior consent of the
holders of at least a Majority in Liquidation Amount of such Capital Securities
(as defined in the related Trust Agreement) unless and until the principal of
(and premium, if any, on) the Securities of such series and all accrued and
(subject to Section 3.12) unpaid interest (including, subject to Section 3.12,
any Additional Interest) thereon have been paid in full, and (ii) no amendment
shall be made to Section 5.8 of this Indenture that would impair the
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rights of the holders of Capital Securities issued by any Issuer Trust provided
therein without the prior consent of the holders of each such Capital Security
then outstanding unless and until the principal of (and premium, if any, on) the
Securities of such series and all accrued and (subject to Section 3.12) unpaid
interest (including, subject to Section 3.12, any Additional Interest) thereon
have been paid in full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities or any corresponding
series of Capital Securities of an Issuer Trust that holds the Securities of any
series, or that modifies the rights of the Holders of Securities of such series
or holders of such Capital Securities of such corresponding series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series or holders
of Capital Securities of any other series.
It shall not be necessary for any Act of Holders under this Section 9.2
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article IX or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.1) shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent herein provided for relating to such action have
been complied with. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article IX,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
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SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if required by
the Corporation, bear a notation in form approved by the Corporation as to any
matter provided for in such supplemental indenture. If the Corporation shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Corporation, to any such supplemental indenture may be prepared
and executed by the Corporation and authenticated and delivered by the Trustee
in exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Corporation covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest (including any Additional Interest) on the Securities of
that series in accordance with the terms of such Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Corporation will maintain in each Place of Payment for any series
of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Corporation in respect of the Securities of that series
and this Indenture may be served. The Corporation initially appoints the
Trustee, acting through its Corporate Trust Office, as its agent for said
purposes. The Corporation will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the
Corporation shall fail to maintain such office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Corporation hereby appoints the Trustee as its agent to receive
all such presentations, surrenders, notices and demands.
The Corporation may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Corporation of its obligation to maintain an office or agency in
each Place of Payment for Securities of any series for such purposes. The
Corporation
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will give prompt written notice to the Trustee of any such designation and any
change in the location of any such office or agency.
SECTION 10.3. Money for Security Payments to be Held in Trust.
If the Corporation shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (or premium, if any) or interest (including any Additional
Interest) on any of the Securities of such series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (or premium, if any) or interest (including any Additional Interest)
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
failure so to act.
Whenever the Corporation shall have one or more Paying Agents, it will,
prior to 10:00 a.m., New York City time, on each due date of the principal of
(or premium, if any) or interest (including any Additional Interest) on any
Securities, deposit with a Paying Agent a sum sufficient to pay the amount so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such amount, and (unless such Paying Agent is the Trustee) the
Corporation will promptly notify the Trustee of its failure so to act.
The Corporation will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 10.3,
that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) and interest (including any Additional
Interest) on the Securities of a series in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Corporation
(or any other obligor upon such Securities) in the making of any
payment of principal (or premium, if any) or interest (including any
Additional Interest) in respect of any Security of any series;
(3) at any time during the continuance of any default with
respect to a series of Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent with respect to such series; and
(4) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent.
The Corporation may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Corporation Order direct any
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Paying Agent to pay, to the Trustee all sums held in trust by the Corporation or
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Corporation or such Paying Agent;
and, upon such payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Corporation in trust for the payment of the principal of (or premium, if
any) or interest (including any Additional Interest) on any Security and
remaining unclaimed for two years after such principal (or premium, if any) or
interest (including any Additional Interest) has become due and payable shall
(unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be paid on Corporation Request to the
Corporation, or (if then held by the Corporation) shall (unless otherwise
required by mandatory provision of applicable escheat or abandoned or unclaimed
property law) be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Corporation
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Corporation as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Corporation cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in the Borough of Manhattan, The City of New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the
Corporation.
SECTION 10.4. Statement as to Compliance.
The Corporation shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Corporation ending after the date hereof, an
Officers' Certificate covering the preceding calendar year, stating whether or
not to the best knowledge of the signers thereof the Corporation is in default
in the performance, observance or fulfillment of or compliance with any of the
terms, provisions, covenants and conditions of this Indenture, and if the
Corporation shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge. For the purpose of this Section
10.4, compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture.
SECTION 10.5. Waiver of Certain Covenants.
Subject to the rights of holders of Capital Securities specified in
Section 9.2, if any, the Corporation may omit in any particular instance to
comply with any covenant or condition provided pursuant to Section 3.1, 9.1(3)
or 9.1(4) with respect to the Securities of any series, if before or after the
time for such compliance the Holders of at least a majority in aggregate
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principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the
Corporation in respect of any such covenant or condition shall remain in full
force and effect.
SECTION 10.6. Additional Sums.
In the case of the Securities of a series initially issued to an Issuer
Trust, so long as no Event of Default has occurred and is continuing and except
as otherwise specified as contemplated by Section 2.1 or Section 3.1, if (i) an
Issuer Trust is the Holder of all of the Outstanding Securities of such series,
and (ii) a Tax Event has occurred and is continuing in respect of such Issuer
Trust, the Corporation shall pay to such Issuer Trust (or its permitted
successor under the related Trust Agreement) for so long as such Issuer Trust
(or its permitted successor) is the registered holder of the Outstanding
Securities of such series, together with any payment of principal of (or
premium, if any) or interest (including any Additional Interest) on such
Securities, such additional sums as may be necessary in order that the amount of
Distributions (including any Additional Amounts (as defined in such Trust
Agreement)) then payable by such Issuer Trust in respect of the related Capital
Securities and Common Securities in accordance with the terms thereof shall not
be reduced as a result of any Additional Taxes arising from such Tax Event (the
"Additional Sums"). Whenever in this Indenture or the Securities there is a
reference in any context to the payment of principal of (or premium, if any) or
interest (including any Additional Interest) on the Securities, such mention
shall be deemed to include mention of the payments of the Additional Sums
provided for in this paragraph to the extent that, in such context, Additional
Sums are, were or would be payable in respect thereof pursuant to the provisions
of this paragraph, and any express mention of the payment of Additional Sums (if
applicable) in any provision hereof shall not be construed as excluding
Additional Sums in those provisions hereof where such express mention is not
made; provided, however, that the deferral of the payment of interest pursuant
to Section 3.12 or the terms of the Securities shall not defer the payment of
any Additional Sums that may be due and payable.
SECTION 10.7. Additional Covenants.
The Corporation covenants and agrees with each Holder of Securities of
each series that it shall not, and it shall not permit any Subsidiary of the
Corporation to, (x) declare or pay any dividends or distributions on, or redeem
purchase, acquire or make a liquidation payment with respect to, any shares of
the Corporation's capital stock, or (y) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation that rank pari passu in all respects with or
junior in interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Corporation
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or
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consultants, in connection with a dividend reinvestment or stockholder stock
purchase plan or in connection with the issuance of capital stock of the
Corporation (or securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered into prior to the
applicable Extension Period, (b) as a result of an exchange or conversion of any
class or series of the Corporation's capital stock (or any capital stock of a
Subsidiary of the Corporation) for any class or series of the Corporation's
capital stock or of any class or series of the Corporation's indebtedness for
any class or series of the Corporation's capital stock, (c) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection
with any Rights Plan, or the issuance of rights, stock or other property under
any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or
(e) any dividend in the form of stock, warrants, options or other rights where
the dividend stock or the stock issuable upon exercise of such warrants, options
or other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock) if at such time (i) there shall
have occurred any event (A) of which the Corporation has actual knowledge that
with the giving of notice or the lapse of time, or both, would constitute an
Event of Default with respect to the Securities of such series, and (B) which
the Corporation shall not have taken reasonable steps to cure, (ii) if the
Securities of such series are held by an Issuer Trust, the Corporation shall be
in default with respect to its payment of any obligations under the Guarantee
Agreement relating to the Capital Securities issued by such Issuer Trust, or
(iii) the Corporation shall have given notice of its election to begin an
Extension Period with respect to the Securities of such series as provided
herein and shall not have rescinded such notice, or such Extension Period, or
any extension thereof, shall be continuing.
The Corporation also covenants with each Holder of Securities of a
series issued to an Issuer Trust (i) to hold, directly or indirectly, 100% of
the Common Securities of such Issuer Trust, provided that any permitted
successor of the Corporation hereunder may succeed to the Corporation's
ownership of such Common Securities, (ii) as holder of such Common Securities,
not to voluntarily terminate, wind-up or liquidate such Issuer Trust, other than
(a) in connection with a distribution of the Securities of such series to the
holders of the related Capital Securities in liquidation of such Issuer Trust,
or (b) in connection with certain mergers, consolidations or amalgamations
permitted by the related Trust Agreement, and (iii) to use its reasonable
efforts, consistent with the terms and provisions of such Trust Agreement, to
cause such Issuer Trust to continue to be classified as a grantor trust and not
to be taxable as a corporation for United States federal income tax purposes.
SECTION 10.8. Original Issue Discount.
For each year during which any Securities that were issued with
original issue discount are Outstanding, the Corporation shall furnish to each
Paying Agent in a timely fashion such information as may be reasonably requested
by each Paying Agent in order that such Paying Agent may prepare the information
that it is required to report for such year on Internal Revenue Service
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Forms 1096 and 1099 pursuant to Section 6049 of the Internal Revenue Code of
1986, as amended. Such information shall include the amount of original issue
discount includable in income for each $1,000 of principal amount at Stated
Maturity of Securities Outstanding during such year.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of This Article.
Redemption of Securities of any series (whether by operation of a
sinking fund or otherwise) as permitted or required by any form of Security
issued pursuant to this Indenture shall be made in accordance with such form of
Security and this Article XI; provided, however, that if any provision of any
such form of Security shall conflict with any provision of this Article XI, the
provision of such form of Security shall govern. Except as otherwise set forth
in the form of Security for such series, each Security of a series shall be
subject to partial redemption only in integral multiples of $1,000.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Corporation to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at the
election of the Corporation, the Corporation shall, not less than 30 nor more
than 60 days prior to the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee and, in the case of Securities
of a series held by an Issuer Trust, the Property Trustee under the related
Trust Agreement, of such date and of the principal amount of Securities of the
applicable series to be redeemed and provide the additional information required
to be included in the notice or notices contemplated by Section 11.4; provided
that in the case of any series of Securities initially issued to an Issuer
Trust, for so long as such Securities are held by such Issuer Trust, such notice
shall be given not less than 45 nor more than 75 days prior to such Redemption
Date (unless a shorter notice shall be satisfactory to the Property Trustee
under the related Trust Agreement). In the case of any redemption of Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Securities, the Corporation shall furnish the Trustee with an
Officers' Certificate and an Opinion of Counsel evidencing compliance with such
restriction.
SECTION 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such
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method as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of a portion of the principal amount of any
Security of such series, provided that the unredeemed portion of the principal
amount of any Security shall be in an authorized denomination (which shall not
be less than the minimum authorized denomination) for such Security.
The Trustee shall promptly notify the Corporation in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security that has been or is to be
redeemed.
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given 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 Securities to be redeemed, at the address of such Holder
as it appears in the Securities Register, provided that in the case of any
series of Securities initially issued to an Issuer Trust, for so long as such
Securities are held by such Issuer Trust, such notice shall be given not less
than 45 nor more than 75 days prior to such Redemption Date (unless a shorter
notice shall be satisfactory to the Property Trustee under the related Trust
Agreement).
With respect to Securities of each series to be redeemed, each notice
of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price or, if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, an
estimate of the Redemption Price together with a statement that it is
an estimate and that the actual Redemption Price will be calculated on
the third Business Day prior to the Redemption Date (and, if such an
estimate of the Redemption Price is given, a subsequent notice shall be
given as set forth above on the date that such Redemption Price is
calculated setting forth the actual Redemption Price);
(c) if less than all Outstanding Securities of such particular
series are to be redeemed, the identification (and, in the case of
partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;
(d) that on the Redemption Date, the Redemption Price will
become due and payable upon each such Security or portion thereof, and
that interest (including any Additional Interest) thereon, if any,
shall cease to accrue on and after said date;
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(e) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(f) that the redemption is for a sinking fund, if such is the
case;
(g) such other provisions as may be required in respect of the
terms of a particular series of Securities.
Notice of redemption of Securities to be redeemed at the election of
the Corporation shall be given by the Corporation or, at the Corporation's
request, by the Trustee in the name and at the expense of the Corporation and
shall be irrevocable. The notice if mailed in the manner provided above shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
SECTION 11.5. Deposit of Redemption Price.
Prior to 10:00 a.m., New York City time, on the Redemption Date
specified in the notice of redemption given as provided in Section 11.4, the
Corporation will deposit with the Trustee or with one or more Paying Agents (or,
if the Corporation is acting as its own Paying Agent, the Corporation will
segregate and hold in trust as provided in Section 10.3) an amount of money
sufficient to pay the Redemption Price of, and any accrued interest (including
any Additional Interest) on, all the Securities (or portions thereof) that are
to be redeemed on that date.
SECTION 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.4,
the Securities or portion of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Redemption Price, together with accrued
interest (including any Additional Interest) to the Redemption Date. On
presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said Securities or the specified portions thereof shall be
paid and redeemed by the Corporation at the applicable Redemption Price,
together with accrued interest (including any Additional Interest) to the
Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest (including any Additional
Interest) whose Stated Maturity is on or prior to the Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant record
dates according to their terms and the provisions of Section 3.8.
Upon presentation of any Security redeemed in part only, the
Corporation shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Corporation,
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a new Security or Securities of the same series, of authorized denominations, in
aggregate principal amount equal to the unredeemed portion of the Security so
presented and having the same Original Issue Date, Stated Maturity and terms.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of (and premium, if any, on)
such Security shall, until paid, bear interest from the Redemption Date at the
rate prescribed therefor in such Security.
SECTION 11.7. Right of Redemption of Securities Initially Issued to an
Issuer Trust.
In the case of Securities of a series initially issued to an Issuer
Trust, except as otherwise specified as contemplated by Section 3.1, the
Corporation, at its option, may redeem such Securities (i) on or after the date
specified in such Security, in whole at any time or in part from time to time,
or (ii) upon the occurrence and during the continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event, in whole (but not in
part) at any time within 90 days following the occurrence and during the
continuation of such Tax Event, Investment Company Event or Capital Treatment
Event, in each case at a Redemption Price specified in such Security, together
with accrued interest (including any Additional Interest) to but excluding the
Redemption Date.
If less than all the Securities of any such series are to be redeemed,
the aggregate principal amount of such Securities remaining Outstanding after
giving effect to such redemption shall be sufficient to satisfy any provisions
of the Trust Agreement related to the Issuer Trust to which such Securities were
issued, including any requirement in such Trust Agreement as to the minimum
Liquidation Amount (as defined in such Trust Agreement) of Capital Securities
that may be held by a holder of Capital Securities thereunder.
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount that is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If
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provided for by the terms of any Securities of any series, the cash amount of
any sinking fund payment may be subject to reduction as provided in Section
12.2. Each sinking fund payment shall be applied to the redemption of Securities
of any series as provided for by the terms of such Securities.
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Securities of a series in cash, the Corporation may at its
option, at any time no more than 16 months and no less than 45 days prior to the
date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series (together with the unmatured coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Corporation, except Securities of such series that have been redeemed through
the application of mandatory or optional sinking fund payments pursuant to the
terms of the Securities of such series, accompanied by a Corporation Order
instructing the Trustee to credit such obligations and stating that the
Securities of such series were originally issued by the Corporation by way of
bona fide sale or other negotiation for value; provided that the Securities to
be so credited have not been previously so credited. The Securities to be so
credited shall be received and credited for such purpose by the Trustee at the
Redemption Price for such Securities, as specified in the Securities so to be
redeemed, for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly.
SECTION 12.3. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Corporation will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, that is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.1) and the portion thereof, if any, that is to be satisfied by delivering and
crediting Securities pursuant to Section 12.2, and will also deliver to the
Trustee any Securities to be so delivered. Such Officers' Certificate shall be
irrevocable and upon its delivery the Corporation shall be obligated to make any
cash payment or payments referred to therein, on or before the succeeding
sinking fund payment date. If the Corporation fails to deliver such Officers'
Certificate (or, as required by this Indenture, the Securities and coupons, if
any, specified in such Officers' Certificate) by the due date therefor, the
sinking fund payment due on the succeeding sinking fund payment date for such
series shall be paid entirely in cash and shall be sufficient to redeem the
principal amount of the Securities of such series subject to a mandatory sinking
fund payment without the right to deliver or credit securities as provided in
Section 12.2 and without the right to make the optional sinking fund payment
with respect to such series at such time.
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Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Securities of any particular series shall be applied by the
Trustee (or by the Corporation, if the Corporation is acting as its own Paying
Agent) on the sinking fund payment date on which such payment is made (or, if
such payment is made before a sinking fund payment date, on the sinking fund
payment date immediately following the date of such payment) to the redemption
of Securities of such series at the Redemption Price specified in such
Securities with respect to the sinking fund. Any and all sinking fund moneys
with respect to the Securities of any particular series held by the Trustee (or,
if the Corporation is acting as its own Paying Agent, segregated and held in
trust as provided in Section 10.3) on the last sinking fund payment date with
respect to Securities of such series and not held for the payment or redemption
of particular Securities of such series shall be applied by the Trustee (or, by
the Corporation, if the Corporation is acting as its own Paying Agent), together
with other moneys, if necessary, to be deposited (or segregated) sufficient for
the purpose, to the payment of the principal of the Securities of such series at
Maturity. The Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 11.3 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Corporation in the manner provided in Section 11.4. Such notice having
been duly given, the redemption of such Securities shall be made upon the terms
and in the manner stated in Section 11.6. On or before each sinking fund payment
date, the Corporation shall pay to the Trustee (or, if the Corporation is acting
as its own Paying Agent, the Corporation shall segregate and hold in trust as
provided in Section 10.3) in cash a sum in the currency in which Securities of
such series are payable (except as provided pursuant to Section 3.1) equal to
the principal (and premium, if any) and any interest (including any Additional
Interest) accrued to the Redemption Date for the Securities or portions thereof
to be redeemed on such sinking fund payment date pursuant to this Section 12.3.
Neither the Trustee nor the Corporation shall redeem any Securities of
a series with sinking fund monies or mail any notice of redemption of Securities
of such series by operation of the sinking fund for such series during the
continuance of a default in payment of interest (including any Additional
Interest), if any, on any Securities of such series or of any Event of Default
(other than an Event of Default occurring as a consequence of this paragraph)
with respect to the Securities of such series, except that if the notice of
redemption shall have been provided in accordance with the provisions hereof,
the Trustee (or the Corporation, if the Corporation is acting as its own Paying
Agent) shall redeem such Securities if cash sufficient for that purpose shall be
deposited with the Trustee (or segregated by the Corporation) for that purpose
in accordance with the terms of this Article XII. Except as aforesaid, any
monies in the sinking fund for such series at the time when any such default or
Event of Default shall occur and any monies thereafter paid into such sinking
fund shall, during the continuance of such default or Event of Default, be held
as security for the payment of the principal of (and premium, if any) and
interest (including any Additional Interest) on the Securities of such series;
provided, however, that if such default or Event of Default shall have been
cured or waived as provided herein, such monies shall thereafter
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be applied on the next sinking fund payment date for the Securities of such
series on which such monies may be applied pursuant to the provisions of this
Section 12.3.
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Indebtedness.
The Corporation covenants and agrees, and each Holder of a Security, by
its acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article XIII, the payment of the
principal of (and premium, if any) and interest (including any Additional
Interest) on each and all of the Securities of each and every series are hereby
expressly made subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness.
SECTION 13.2. No Payment When Senior Indebtedness in Default; Payment
Over of Proceeds Upon Dissolution, Etc.
If the Corporation shall default in the payment of any principal of (or
premium, if any) or interest on any Senior Indebtedness when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, then, upon written notice of such
default to the Corporation by the holders of Senior Indebtedness or any trustee
therefor, unless and until such default shall have been cured or waived or shall
have ceased to exist, no direct or indirect payment (in cash, property or
securities, by set-off or otherwise) shall be made or agreed to be made on
account of the principal of (or premium, if any) or interest (including any
Additional Interest) on any of the Securities, or in respect of any redemption,
repayment, retirement, purchase or other acquisition of any of the Securities.
In the event of (a) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceedings relating to the Corporation, its creditors or its property, (b) any
proceeding for the liquidation, dissolution or other winding up of the
Corporation, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings, (c) any assignment by the Corporation for the benefit of
creditors or (d) any other marshalling of the assets of the Corporation (each
such event, if any, herein sometimes referred to as a "Proceeding"), all Senior
Indebtedness (including any interest thereon accruing after the commencement of
any such proceedings) shall first be paid in full before any payment or
distribution, whether in cash, securities or other property, shall be made to
any Holder of any of the Securities on account thereof. Any payment or
distribution, whether in cash, securities or other property (other than
securities of the Corporation or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent
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provided in these subordination provisions with respect to the indebtedness
evidenced by the Securities, to the payment of all Senior Indebtedness at the
time outstanding and to any securities issued in respect thereof under any such
plan of reorganization or readjustment), that would otherwise (but for these
subordination provisions) be payable or deliverable in respect of the Securities
of any series shall be paid or delivered directly to the holders of Senior
Indebtedness in accordance with the priorities then existing among such holders
until all Senior Indebtedness (including any interest thereon accruing after the
commencement of any Proceeding) shall have been paid in full.
In the event of any Proceeding, after payment in full of all sums owing
with respect to Senior Indebtedness, the Holders of the Securities, together
with the holders of any obligations of the Corporation ranking on a parity with
the Securities, shall be entitled to be paid from the remaining assets of the
Corporation the amounts at the time due and owing on account of unpaid principal
of (and premium, if any) and interest (including any Additional Interest) on the
Securities and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock or any obligations of the Corporation ranking junior to the Securities and
such other obligations.
If, notwithstanding the foregoing, any payment or distribution of any
character or any security, whether in cash, securities or other property (other
than securities of the Corporation or any other corporation provided for by a
plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in these subordination provisions with respect to
the indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), shall be
received by the Trustee or any Holder in contravention of any of the terms
hereof and before all Senior Indebtedness (including any interest thereon
accruing after the commencement of any Proceeding) shall have been paid in full,
such payment or distribution or security shall be received in trust for the
benefit of, and shall be paid over or delivered and transferred to, the holders
of the Senior Indebtedness at the time outstanding in accordance with the
priorities then existing among such holders for application to the payment of
all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
such Senior Indebtedness (including any interest thereon accruing after the
commencement of any Proceeding) in full. If the Trustee or any Holder fails to
endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
same.
The Trustee and the Holders shall take such action (including the
delivery of this Indenture to an agent for the holders of Senior Indebtedness or
consent to the filing of a financing statement with respect hereto) as may, in
the opinion of counsel designated by the holders of a majority in principal
amount of the Senior Indebtedness at the time outstanding, be necessary or
appropriate to assure the effectiveness of the subordination effected by these
provisions.
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<PAGE> 90
The provisions of this Section 13.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Corporation in
respect of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
The securing of any obligations of the Corporation, otherwise ranking
on a parity with the Securities or ranking junior to the Securities, shall not
be deemed to prevent such obligations from constituting, respectively,
obligations ranking on a parity with the Securities or ranking junior to the
Securities.
SECTION 13.3. Payment Permitted If No Default.
Nothing contained in this Article XIII or elsewhere in this Indenture
or in any of the Securities shall prevent (a) the Corporation, at any time,
except during the pendency of the conditions described in the first paragraph of
Section 13.2 or of any Proceeding referred to in Section 13.2, from making
payments at any time of principal of (and premium, if any) or interest
(including any Additional Interest) on the Securities, or (b) the application by
the Trustee of any moneys deposited with it hereunder to the payment of or on
account of the principal of (and premium, if any) or interest (including any
Additional Interest) on the Securities or the retention of such payment by the
Holders, if, at the time of such application by the Trustee, it did not have
knowledge that such payment would have been prohibited by the provisions of this
Article XIII.
SECTION 13.4. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due or to become due on
all Senior Indebtedness, or the provision for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article XIII (equally and ratably with the
holders of all indebtedness of the Corporation that by its express terms is
subordinated to Senior Indebtedness of the Corporation to substantially the same
extent as the Securities are subordinated to the Senior Indebtedness and is
entitled to like rights of subrogation by reason of any payments or
distributions made to holders of such Senior Indebtedness) to the rights of the
holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of (and premium, if any) and interest (including any Additional
Interest) on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article XIII, and no payments over pursuant to the provisions of this Article
XIII to the holders of Senior Indebtedness by Holders of the Securities or the
Trustee, shall, as among the Corporation, its creditors other than holders of
Senior Indebtedness, and the Holders of the Securities, be deemed to be a
payment or distribution by the Corporation to or on account of such Senior
Indebtedness.
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<PAGE> 91
SECTION 13.5. Provisions Solely to Define Relative Rights.
The provisions of this Article XIII are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article XIII or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as between the Corporation and
the Holders of the Securities, the obligations of the Corporation, which are
absolute and unconditional, to pay to the Holders of the Securities the
principal of (and premium, if any) and interest (including any Additional
Interest) on the Securities as and when the same shall become due and payable in
accordance with their terms; (b) affect the relative rights against the
Corporation of the Holders of the Securities and creditors of the Corporation
other than their rights in relation to the holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Security (or to the extent
expressly provided herein, the holder of any Capital Security) from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, including filing and voting claims in any Proceeding, subject to the
rights, if any, under this Article XIII of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 13.6. Trustee to Effectuate Subordination.
Each Holder of a Security, by its acceptance thereof, authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination provided
in this Article XIII and appoints the Trustee such Holder's attorney-in-fact for
any and all such purposes.
SECTION 13.7. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Corporation or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Corporation with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof that any such
holder may have or be otherwise charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Indebtedness may, at any time and from to time,
without the consent of or notice to the Trustee or the Holders of the Securities
of any series, without incurring responsibility to such Holders and without
impairing or releasing the subordination as provided in this Article XIII or the
obligations hereunder of such Holders to the holders of Senior Indebtedness, do
any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which
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<PAGE> 92
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Corporation and any other Person.
SECTION 13.8. Notice to Trustee.
The Corporation shall give prompt written notice to the Trustee of any
fact known to the Corporation that would prohibit the making of any payment to
or by the Trustee in respect of the Securities. Notwithstanding the provisions
of this Article or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Corporation or a holder of Senior Indebtedness or from any trustee, agent or
representative therefor; provided, however, that if the Trustee shall not have
received the notice provided for in this Section 13.8 at least two Business Days
prior to the date upon which by the terms hereof any monies may become payable
for any purpose (including the payment of the principal of (and premium, if any,
on) or interest (including any Additional Interest) on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such monies and to apply the same to
the purpose for which they were received and shall not be affected by any notice
to the contrary that may be received by it within two Business Days prior to
such date.
Subject to the provisions of Section 6.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself or herself to be a holder of Senior Indebtedness (or a trustee or
attorney-in-fact therefor) to establish that such notice has been given by a
holder of Senior Indebtedness (or a trustee or attorney-in-fact therefor). If
the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XIII, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XIII, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 13.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Corporation referred
to in this Article XIII, the Trustee, subject to the provisions of Section 6.1,
and the Holders of the Securities shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which any Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such
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<PAGE> 93
payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other indebtedness of the Corporation, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XIII.
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior
Indebtedness.
The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and
shall not be liable to any such holders if it shall in good faith mistakenly pay
over or distribute to Holders of Securities or to the Corporation or to any
other Person cash, property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article XIII or otherwise.
SECTION 13.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIII with respect to any Senior Indebtedness
that may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
SECTION 13.12. Article Applicable to Paying Agents.
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Corporation and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee.
* * * *
This Indenture 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.
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<PAGE> 94
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
THE COLONIAL BANCGROUP, INC.
By:
-------------------------------------
Attest:
WILMINGTON TRUST COMPANY,
as Trustee
By:
-------------------------------------
<PAGE> 95
EXHIBIT A
[Form of Restricted Securities Certificate]
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Sections 3.5(b) and 3.6(b) of
the Indenture referred to below)
[-------------------------],
as Securities Registrar
[address]
Re: [Title of Securities] of The Colonial BancGroup, Inc. (the
"Securities")
Reference is made to the Junior Subordinated Indenture, dated as of
January __, 1997 (the "Indenture"), between The Colonial BancGroup, Inc., a
Delaware corporation, and Wilmington Trust Company, as Trustee. Terms used
herein and defined in the Indenture or in Regulation S, Rule 144A or Rule 144
under the U.S. Securities Act of 1933 (the "Securities Act") are used herein as
so defined.
This certificate relates to $__________ aggregate principal
amount of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
CURRENTLY IN BOOK-ENTRY FORM: Yes ___ No ___ (check one)
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through a Depositary or an Agent Member in the name of the Undersigned, as or on
behalf of the Owner. If the Specified Securities are not represented by a Global
Security, they are registered in the name of the Undersigned, as or on behalf of
the Owner.
The Owner has requested that the Specified Securities be transferred to
another person (the "Transferee") who will take delivery in the form of a
Restricted Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with
A-1
<PAGE> 96
Rule 144A, Rule 904 of Regulation S or Rule 144 under the Securities Act and all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to
a person that the Owner and any person acting on its behalf
reasonably believe is a "qualified institutional buyer" within
the meaning of Rule 144A, acquiring for its own account or for
the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf
have taken reasonable steps to ensure that the Transferee is
aware that the Owner may be relying on Rule 144A in connection
with the transfer; and
(2) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities,
an affiliate of the Corporation or any such distributor or a
person acting in behalf of any of the foregoing;
(B) the offer of the Specified Securities was not
made to a person in the United States;
(C) either;
(i) at the time the buy order was
originated, the Transferee was outside the United
States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was
outside the United States, or
(ii) the transaction is being executed in,
on or through the facilities of the Eurobond market,
as regulated by the Association of International Bond
Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on
its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the
United States by or on behalf of the Owner or any affiliate
thereof; and
A-2
<PAGE> 97
(E) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act.
(3) Rule 144 Transfers. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least two years (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the date the Specified
Securities were acquired from the Corporation or from an
affiliate (as such term is defined in Rule 144) of the
Corporation, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and
notice requirements of paragraphs (e), (f) and (h) of Rule
144; or
(B) the transfer is occurring after a holding period
by the Owner of at least three years has elapsed since the
date the Specified Securities were acquired from the
Corporation or from an affiliate (as such term is defined in
Rule 144) of the Corporation, whichever is later, and the
Owner is not, and during the preceding three months has not
been, an affiliate of the Corporation.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Corporation and the Purchasers (as defined in the
Trust Agreement relating to the Issuer Trust to which the Securities were
initially issued).
Dated:
-----------------------------------
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this
certificate.)
By:
-------------------------------
Name:
Title:
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the person
signing on behalf of the Undersigned
must be stated.)
A-3
<PAGE> 1
EXHIBIT 4(B)
CERTIFICATE OF TRUST
OF
COLONIAL CAPITAL II
This Certificate of Trust of Colonial Capital II (the "Trust") dated
February 14, 1997, is being duly executed and filed by the undersigned, as
trustee, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
Colonial Capital II.
2. Delaware Trustee. The name and business address of the Trust, with
a principal place of business in the State of Delaware, are Wilmington Trust
Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective as of
its filing.
In Witness Whereof, the undersigned trustee of the Trust has executed
this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:
-------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4(C)
TRUST AGREEMENT
OF
COLONIAL CAPITAL II
TRUST AGREEMENT, dated as of February 14, 1997, between The
Colonial BancGroup, Inc., a Delaware corporation, as "Depositor", and
Wilmington Trust Company, as "Trustee". The Depositor and the Trustee hereby
agree as follows:
1. The trust created hereby shall be known as Colonial
Capital II (the "Trust"), in which name the Trustee, or the Depositor to the
extent provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and
sets over to the Trustee the sum of $10. The Trustee hereby acknowledges
receipt of such amount in trust from the Depositor, which amount shall
constitute the initial trust estate. The Trustee hereby declares that it will
hold the trust estate in trust for the Depositor. It is the intention of the
parties hereto that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801 et seq.
(the "Business Trust Act"), and that this document constitutes the governing
instrument of the Trust. The Trustee is hereby authorized and directed to
execute and file a certificate of trust with the Delaware Secretary of State in
accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustee will enter into an
amended and restated Trust Agreement, satisfactory to each such party and
having substantially the terms described in the Prospectus (as defined below),
to provide for the contemplated operation of the Trust created hereby and the
issuance of the Capital Securities and Common Securities referred to therein.
Prior to the execution and delivery of such amended and restated Trust
Agreement, the Trustee shall not have any duty or obligation hereunder or with
respect to the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery any
licenses, consents or approvals required by applicable law or otherwise.
4. The Depositor and the Trustee hereby authorize and
direct the Depositor, as the sponsor of the Trust, (i) to prepare and
distribute one or more prospectuses on behalf of the Trust, (the "Prospectus")
including any necessary or desirable amendments thereto (including any exhibits
contained therein or forming a part thereof), relating to the Capital
Securities of the Trust
<PAGE> 2
and certain other securities; (ii) to file and execute on behalf of the Trust
such applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as the
Depositor, on behalf of the Trust, may deem necessary or desirable to register
the Capital Securities under, or obtain for the Capital Securities an exemption
from, the securities or "Blue Sky" laws; and (iii) to execute on behalf of the
Trust any and all documents, papers and instruments as may be desirable in
connection with any of the foregoing. If any filing referred to in clauses
(i), (ii) and (iii) above is required by law or by the rules and regulations of
applicable governmental agency, self-regulatory organization or other person or
organization to be executed on behalf of the Trust by a Trustee, the Depositor
and any trustee of the Trust appointed pursuant to Section 6 hereof are hereby
authorized to join in any such filing and to execute on behalf of the Trust any
and all of the foregoing.
5. This Trust Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6. The Trustee shall initially be the only trustee of
the Trust. Thereafter, the Depositor may increase or decrease (but not below
one) the number of trustees of the Trust by executing a written instrument
fixing such number; provided, however, that so long as it is required by the
Business Trust Act, one trustee of the Trust shall be either a natural person
who is a resident of the State of Delaware or an entity other than a natural
person that has its principal place of business in the State of Delaware and
that, in either case, otherwise meets the requirements of applicable Delaware
law. Subject to the foregoing, the Depositor is entitled to appoint or remove
without cause any trustee at any time. The Trustee may resign upon thirty
days' prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to conflict of laws principles).
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
THE COLONIAL BANCGROUP, INC.,
as Depositor
By:
---------------------------------
Name: W. Flake Oakley
Title: Executive Vice
President and Chief
Financial Officer
WILMINGTON TRUST COMPANY,
as Trustee
By:
---------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4(D)
================================================================================
AMENDED AND RESTATED TRUST AGREEMENT
AMONG
THE COLONIAL BANCGROUP, INC.,
as Depositor
WILMINGTON TRUST COMPANY,
as Property Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
and the several Holders of the Trust Securities
-------------------
Dated as of ____________, 1997
-------------------
COLONIAL CAPITAL II
================================================================================
<PAGE> 2
COLONIAL CAPITAL II
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
- ----------- -------
<S> <C> <C>
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7(a)(ii)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.8
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.13
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.13
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.15(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.15(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.8
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.15(c)
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.16
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.16
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.16
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.16
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(a), 8.3(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2, 10.8
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1, 8.3
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
316 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9, 5.10
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.10
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINED TERMS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.2 Office of the Delaware Trustee; Principal Place of Business . . . . . . . . . 12
SECTION 2.3 Initial Contribution of Trust Property; Organizational
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.4 Issuance of the Capital Securities . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.5 Issuance of the Common Securities; Subscription and
Purchase of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.6 Continuation of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.7 Authorization to Enter into Certain Transactions . . . . . . . . . . . . . . . 13
SECTION 2.8 Assets of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.9 Title to Trust Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 Payment Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.2 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.3 Subordination of Common Securities . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.4 Payment Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.5 Tax Returns and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.6 Payment of Taxes, Duties, Etc. of the Issuer Trust . . . . . . . . . . . . . . 22
SECTION 4.7 Payments under Indenture or Pursuant to Direct Actions . . . . . . . . . . . . 23
</TABLE>
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<TABLE>
<S> <C>
SECTION 4.8 Liability of the Holder of Common Securities . . . . . . . . . . . . . . . . . 23
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1 Initial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.2 The Trust Securities Certificates . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.3 Execution and Delivery of Trust Securities Certificates . . . . . . . . . . . 24
SECTION 5.4 Book-Entry Capital Securities . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.5 Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges; Securities Act Legends . . . . . . . . . . . . . . 26
SECTION 5.6 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.7 Persons Deemed Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.8 Access to List of Holders' Names and Addresses . . . . . . . . . . . . . . . . 31
SECTION 5.9 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.10 Appointment of Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.11 Ownership of Common Securities by Depositor . . . . . . . . . . . . . . . . . 32
SECTION 5.12 Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.13 Rights of Holders; Waivers of Past Defaults . . . . . . . . . . . . . . . . . 32
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1 Limitations on Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.2 Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.3 Meetings of Holders of the Capital Securities . . . . . . . . . . . . . . . . 36
SECTION 6.4 Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.5 Proxies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.6 Holder Action by Written Consent . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.7 Record Date for Voting and Other Purposes . . . . . . . . . . . . . . . . . . 37
SECTION 6.8 Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.9 Inspection of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 Representations and Warranties of the Property Trustee and
the Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.2 Representations and Warranties of Depositor . . . . . . . . . . . . . . . . . 40
ARTICLE VIII
THE ISSUER TRUSTEES; PAYING AGENTS
SECTION 8.1 Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.2 Certain Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.3 Certain Rights of Property Trustee . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.4 Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . 45
SECTION 8.5 May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.6 Compensation; Indemnity; Fees . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.7 Corporate Property Trustee Required; Eligibility of Issuer
Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.8 Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.9 Co-Trustees and Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.10 Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . 49
SECTION 8.11 Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . 50
SECTION 8.12 Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . 51
SECTION 8.13 Preferential Collection of Claims Against Depositor or
Issuer Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8.14 Property Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . 51
SECTION 8.15 Reports by Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.16 Reports to the Property Trustee . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.17 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . 53
SECTION 8.18 Number of Issuer Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.19 Delegation of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.20 Appointment of Administrative Trustees . . . . . . . . . . . . . . . . . . . . 54
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1 Termination Upon Expiration Date . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.2 Early Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.3 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 9.4 Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>
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<TABLE>
<S> <C>
SECTION 9.5 Mergers, Consolidations, Amalgamations or Replacements
of Issuer Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Limitation of Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.2 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.3 Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.5 Payments Due on Non-Business Day . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.6 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.8 Reports, Notices and Demands . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.9 Agreement Not to Petition . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.10 Trust Indenture Act; Conflict with Trust Indenture Act . . . . . . . . . . . 61
SECTION 10.11 Acceptance of Terms of Trust Agreement, Guarantee
Agreement, Indenture and Registration Rights Agreement . . . . . . . . . . 62
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Capital Securities Certificate
Exhibit F Form of Restricted Securities Certificate
</TABLE>
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<PAGE> 7
AMENDED AND RESTATED TRUST AGREEMENT, dated as of __________, 1997,
among (i) The Colonial BancGroup, Inc., a Delaware corporation (including any
successors or assigns, the "Depositor"), (ii) Wilmington Trust Company, a
banking corporation duly organized and existing under the laws of the State of
Delaware, as property trustee (in such capacity, the "Property Trustee" and, in
its separate corporate capacity and not in its capacity as Property Trustee,
the "Bank"), (iii) Wilmington Trust Company, a banking corporation duly
organized and existing under the laws of the State of Delaware, as Delaware
trustee (in such capacity, the "Delaware Trustee"), (iv) W. Flake Oakely, an
individual, and Young J. Boozer, III, an individual, each of whose address is
c/o The Colonial BancGroup, Inc., One Commerce Street, Montgomery, Alabama
36104 (each an "Administrative Trustee"), (the Property Trustee, the Delaware
Trustee and the Administrative Trustees being referred to collectively as the
"Issuer 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 entering into the Trust Agreement, dated as of February 14, 1997
(the "Original Trust Agreement"), and by the execution and filing by the
Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on February 14, 1997, attached as Exhibit A; and
WHEREAS, the Depositor and the Issuer Trustees desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common Securities by
the Issuer Trust to the Depositor, (ii) the issuance and sale of the Capital
Securities by the Issuer Trust pursuant to the Registration Rights Agreement,
(iii) the acquisition by the Issuer Trust from the Depositor of all of the
right, title and interest in the Debentures, and (iv) the appointment of the
Property Trustee and the Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates
the Original Trust Agreement in its entirety and agrees as follows:
<PAGE> 8
ARTICLE I
DEFINED TERMS
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;
(e) Unless the context otherwise requires, any reference to an
"Article", a "Section" or an "Exhibit" refers to an Article, a Section or an
Exhibit, as the case may be, of or to this Trust Agreement; and
(f) The words "hereby", "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 6.8.
"Additional Distributions" means, with respect to Trust Securities of
a given Liquidation Amount and/or a given period, the amount of Additional
Interest (as defined in the Indenture) paid by the Depositor on a Like Amount
of Debentures for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustee" means each Person appointed in accordance
with Section 8.20 solely in such Person's capacity as Administrative Trustee of
the Issuer Trust heretofore created and continued hereunder and not in such
Person's individual 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
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<PAGE> 9
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.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Book-Entry Capital Security, the rules and procedures
of the Clearing Agency for such Book-Entry Capital Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) 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 any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar 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
any such decree or order unstayed and in effect for a period of 60 consecutive
days; or
(b) 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 any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any 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 and its
willingness to be adjudicated a bankrupt, or the taking of corporate action by
such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board of Directors" means the board of directors of the Depositor or
the Executive Committee of the board of directors of the Depositor (or any
other committee of the board of directors of the Depositor performing similar
functions) or a committee designated by the board of directors of the Depositor
(or any such committee), comprised of two or more members of the board of
directors of the Depositor or officers of the Depositor, or both.
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<PAGE> 10
"Book-Entry Capital Securities Certificate" means a Capital Securities
Certificate evidencing ownership of Book-Entry Capital Securities.
"Book-Entry Capital Security" means a Capital Security, the ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 5.4.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (c) a day on which the
Property Trustee's Corporate Trust Office or the Corporate Trust Office of the
Debenture Trustee is closed for business.
"Capital Security" means an undivided beneficial interest in the
assets of the Issuer Trust, having a Liquidation Amount of $1,000 and having
the rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution to the extent provided
herein, and designated as 8.92% Capital Securities, Series A.
"Capital Securities Certificate" means a certificate evidencing
ownership of Capital Securities, substantially in the form attached as Exhibit
E.
"Certificate Depository Agreement" means the agreement among the
Issuer Trust, the Depositor and DTC, as the initial Clearing Agency, dated as
of the Closing Date, substantially in the form attached as Exhibit B, 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. DTC 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.
"Closing Date" means the Time of Delivery, which date is also the date
of execution and delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Colonial Capital I" menas the Delaware Business trust formed on
January 24, 1997, by the Depositor in accordance with an Amended and Restated
Trust Agreement dated as of January 29, 1997.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit
C.
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<PAGE> 11
"Common Security" means an undivided beneficial interest in the assets
of the Issuer Trust, having a Liquidation Amount of $1,000 and having the
rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution to the extent provided
herein.
"Corporate Trust Office" means (i) when used with respect to the
Property Trustee, the principal office of the Property Trustee located in
Wilmington, Delaware, and (ii) when used with respect to the Debenture Trustee,
the principal office of the Debenture Trustee located in Wilmington, Delaware.
"Debenture Event of Default" means any "Event of Default" specified in
Section 5.1 of the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to
be redeemed under the Indenture, the date fixed for redemption of such
Debentures under the Indenture.
"Debenture Trustee" means the Person identified as the "Trustee" in
the Indenture, solely in its capacity as Trustee pursuant to the Indenture and
not in its individual capacity, or its successor in interest in such capacity,
or any successor Trustee appointed as provided in the Indenture.
"Debentures" means the Depositor's 8.92% Junior Subordinated
Deferrable Interest Debentures, Series A, issued pursuant to the Indenture and
the Registration Rights Agreement.
"Definitive Capital Securities Certificates" means either or both (as
the context requires) of (i) Capital Securities Certificates issued as
Book-Entry Capital Securities Certificates as provided in Section 5.2 or 5.4,
and (ii) Capital Securities Certificates issued in certificated, fully
registered form as provided in Section 5.2, 5.4 or 5.5.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., or any successor statute
thereto, in each case as amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware
Trustee" in the preamble to this Trust Agreement, solely in its capacity as
Delaware Trustee of the trust heretofore created 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" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
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"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"DTC" means The Depository Trust Company.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such event 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):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Issuer 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
(c) default by the Issuer Trust in the payment of any
Redemption Price of any Trust Security when it becomes due and
payable; or
(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in this
Trust Agreement (other than those specified in clause (b) or (c)
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 Issuer Trustees and to the Depositor by the Holders of at least
25% in aggregate Liquidation Amount of the Outstanding Capital
Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the
Property Trustee if a successor Property Trustee has not been
appointed within 90 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor statute thereto.
"Exchange Offer" means the offer to exchange Capital Securities for
the Original Capital Securities pursuant to the Registration Rights Agreement.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities, dated as of the Closing Date, between The Colonial BancGroup, Inc.
and the Issuer Trust, substantially in the form attached as Exhibit D, as
amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
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"Guarantee Agreement" means the Guarantee Agreement executed and
delivered by the Depositor and Wilmington Trust Company, as guarantee trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Capital Securities, as amended from time to
time.
"Holder" means a Person in whose name a Trust Security or Trust
Securities are registered in the Securities Register; any such Person shall be
deemed to be a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Indenture" means the Junior Subordinated Indenture, dated as of
January 29, 1997, between the Depositor and the Debenture Trustee, as trustee,
as amended or supplemented from time to time.
"Issuer Trust" means the Delaware business trust known as "Colonial
Capital II", which was created on February 14, 1997, under the Delaware
Business Trust Act pursuant to the Original Trust Agreement and is continued
pursuant to this Trust Agreement.
"Issuer Trustees" means, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"Investment Company Act" means the Investment Company Act of 1940, or
any successor statute thereto, in each case as amended from time to time.
"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 (a) with respect to a redemption of any Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture, the proceeds of which will be used to pay the Redemption Price of
such Trust Securities, (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a dissolution or liquidation of
the Issuer Trust, Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the Holder to whom such Debentures are
distributed, and (c) with respect to any distribution of Additional
Distributions to Holders of Trust Securities, Debentures having a principal
amount equal to the Liquidation Amount of the Trust Securities in respect of
which such distribution is made.
"Liquidation Amount" means the stated amount of $1,000 per Trust
Security.
"Liquidation Date" means the date of the dissolution, winding-up or
termination of the Issuer Trust pursuant to Section 9.4.
"Liquidation Distribution" has the meaning specified in Section
9.4(d).
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"Majority in Liquidation Amount of the Capital Securities" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount of all then Outstanding
Capital Securities.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or one of the Executive
Vice Presidents, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary, of the Depositor, and delivered to the Issuer Trustees.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Trust Agreement shall include:
(a) a statement by each officer signing the Officers'
Certificate that such officer 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 such officer in rendering
the Officers' Certificate;
(c) a statement that 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 such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Depositor or any Affiliate of the Depositor.
"Original Trust Agreement" has the meaning specified in the recitals
to this Trust Agreement.
"Original Capital Securities" means the capital securities in the
aggregate amount of $70,000,000, issued by Colonial Capital I on January 29,
1997, pursuant to the Purchase Agreement.
"Outstanding", when used with respect to Trust Securities, means, as
of the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore cancelled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(b) Trust Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property
Trustee or any Paying
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Agent; provided that, if such Trust Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Trust
Agreement; and
(c) Trust Securities that have been paid or in exchange for or
in lieu of which other Capital Securities have been executed and
delivered pursuant to Sections 5.4, 5.5, 5.6 and 5.11;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Capital Securities owned by the Depositor, any Issuer Trustee or any Affiliate
of the Depositor or any Issuer Trustee shall be disregarded and deemed not to
be Outstanding, except that (a) in determining whether any Issuer Trustee shall
be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Capital Securities that such Issuer
Trustee knows to be so owned shall be so disregarded, and (b) the foregoing
clause (a) shall not apply at any time when all of the Outstanding Capital
Securities are owned by the Depositor, one or more of the Issuer Trustees
and/or any such Affiliate. Capital Securities so owned that have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrative Trustees the pledgee's right so to act with
respect to such Capital Securities and that the pledgee is not the Depositor or
any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of Book-Entry
Capital Securities 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 5.10 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Holders in which all amounts paid in respect
of the Debentures will be held and from which the Property Trustee, through the
Paying Agent, shall make payments to the Holders in accordance with Sections
4.1 and 4.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, company,
limited liability company, trust, unincorporated association, or government or
any agency or political subdivision thereof, or any other entity of whatever
nature.
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"Plan" means an employee benefit or other plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended, or Section
4975 of the Internal Revenue Code of 1986.
"Plan Asset Entity" means any Person whose underlying assets include
"plan assets" by reason of any Plan's investment in such Person.
"Property Trustee" means the Person identified as the "Property
Trustee" in the preamble to this Trust Agreement, solely in its capacity as
Property Trustee of the trust heretofore created and continued hereunder and
not in its individual capacity, or its successor in interest in such capacity,
or any successor property trustee appointed as herein provided.
"PTCE" means a U.S. Department of Labor Prohibited Transaction Class
Exemption.
"Purchase Agreement" means the Purchase Agreement, dated as of January
24,1997, among Colonial Capital I, the Depositor and the Purchasers named in
Schedule I thereto, as the same may be amended from time to time.
"Purchasers" has the meaning specified in the Purchase Agreement.
"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 Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium,
if any, paid by the Depositor upon the concurrent redemption of a Like Amount
of Debentures.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement among the Depositor, Colonial Capital I and the Purchasers,
dated as of January 29, 1997.
"Relevant Trustee" has the meaning specified in Section 8.10.
"Securities Act" means the Securities Act of 1933, and any successor
statute thereto, in each case as amended from time to time.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.5.
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"Successor Capital Securities" of any particular Capital Securities
Certificate means every Capital Securities Certificate issued after, and
evidencing all or a portion of the same beneficial interest in the Issuer Trust
as that evidenced by, such particular Capital Securities Certificate; and, for
the purposes of this definition, any Capital Securities Certificate executed
and delivered under Section 5.6 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Capital Securities Certificate shall be deemed to
evidence the same beneficial interest in the Issuer Trust as the mutilated,
destroyed, lost or stolen Capital Securities Certificate.
"Time of Delivery" has the meaning specified in the Purchase
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 (i) all Exhibits, and (ii) for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"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 if 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 (a) the Debentures, (b) any cash on deposit in,
or owing to, the Payment Account, and (c) 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 the trusts of this Trust
Agreement.
"Trust Security" means any one of the Common Securities or the Capital
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name.
The trust continued hereby shall be known as "Colonial Capital II", as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Issuer Trustees, in which name the Issuer
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Trustees may conduct the business of the Issuer Trust, make and execute
contracts and other instruments on behalf of the Issuer Trust and sue and be
sued.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of
Business.
The address of the Delaware Trustee in the State of Delaware is Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration, or such other address in the State of Delaware
as the Delaware Trustee may designate by written notice to the Holders, the
Depositor, the Property Trustee and the Administrative Trustees. The principal
executive office of the Issuer Trust is c/o The Colonial BancGroup, Inc., One
Commerce Street, Montgomery, Alabama 36104, Attention: W. Flake Oakley.
SECTION 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property 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 Issuer Trust as they arise or shall, upon request of any Issuer
Trustee, promptly reimburse such Issuer Trustee for any such expenses paid by
such Issuer Trustee. The Depositor shall make no claim upon the Trust Property
for the payment of such expenses.
SECTION 2.4. Issuance of the Capital Securities.
As of January 29, 1997, the Depositor, both on its own behalf and on
behalf of Colonial Capital I, executed and delivered the Registration Rights
Agreement. Contemporaneously with the consummation of the Exchange Offer, an
Administrative Trustee, on behalf of the Issuer Trust, shall manually execute
in accordance with Section 5.2 and 5.3 and the Property Trustee shall deliver
Capital Securities Certificates, evidencing an aggregate of 70,000 Capital
Securities having an aggregate Liquidation Amount of $70,000,000, in accordance
with the terms of the Exchange Offer and any related letters of transmittal
which form a part thereof.
SECTION 2.5. Issuance of the Common Securities; Subscription and
Purchase of Debentures.
Upon completion of the Exchange Offer, an Administrative Trustee, on
behalf of the Issuer Trust, shall execute in accordance with Section 5.2 and
5.3 and the Property Trustee shall deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, evidencing up to an
aggregate of 2,165 Common Securities having an aggregate Liquidation Amount of
up to $2,165,000. Contemporaneously therewith, the Depositor shall issue to
the Issuer Trust, and the Issuer Trust shall acquire from the Depositor,
Debentures having an aggregate principal amount equal to a maximum of
$72,165,000 registered in the
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name of the Property Trustee on behalf of the Issuer Trust and, in satisfaction
of the Registration Rights Agreement.
SECTION 2.6. Continuation of Trust.
The exclusive purposes and functions of the Issuer Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Debentures in accordance with the Registration Rights Agreement, and (b) to
engage in only those activities necessary or incidental thereto. The Depositor
hereby appoints the Issuer Trustees as trustees of the Issuer Trust, to have
all the rights, powers and duties to the extent set forth herein, and the
respective Issuer Trustees hereby accept such appointment. 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 Issuer Trust and the
Holders. The Administrative Trustees shall have all rights, powers and duties
set forth herein and in accordance with applicable law. 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 of the Issuer Trust for the sole and limited purpose of fulfilling
the requirements of Section 3807 of the Delaware Business Trust Act and for
taking such actions as are required to be taken by a Delaware trustee under the
Delaware Business Trust Act.
SECTION 2.7. Authorization to Enter into Certain Transactions.
(a) The Issuer Trustees shall conduct the affairs of the Issuer Trust
in accordance with the terms of this Trust Agreement. Subject to the
limitations set forth in paragraph (b) of this Section 2.7, and in accordance
with the following provisions (i) and (ii), the Issuer Trustees shall have the
authority to enter into all transactions and agreements determined by the
Issuer Trustees to be appropriate in exercising the authority, express or
implied, otherwise granted to the Issuer Trustees, as the case may be, under
this Trust Agreement, and to perform all acts in furtherance thereof, including
the following:
(i) Each Administrative Trustee shall have the power and
authority to act on behalf of the Issuer Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) causing the Issuer Trust to enter into, and to
execute, deliver and perform on behalf of the Issuer Trust,
the Expense Agreement, the Registration Rights Agreement and
the Certificate Depository Agreement and such other agreements
as may be necessary or desirable in connection with the
purposes and function of the Issuer Trust;
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(C) assisting in compliance with the duties and
obligations of the Issuer Trust under the Registration Rights
Agreement and the Securities Act and under applicable state
securities or blue sky laws (including by means of
registration of the Capital Securities thereunder from time to
time), and the Trust Indenture Act;
(D) registering the Capital Securities under the
Exchange Act, if required, and the preparation and filing of
all periodic and other reports and documents pursuant to the
foregoing, and assisting in obtaining the registration or
listing of the Capital Securities on any securities exchange
or national trading market;
(E) assisting in the sending of notices (other than
notices of default) and other information regarding the Trust
Securities and the Debentures to the Holders in accordance
with this Trust Agreement;
(F) consenting to the appointment of a Paying Agent,
authenticating agent and Securities Registrar in accordance
with this Trust Agreement (which consent shall not be
unreasonably withheld);
(G) executing the Trust Securities on behalf of the
Issuer Trust in accordance with this Trust Agreement;
(H) executing and delivering closing certificates, if
any, pursuant to the Purchase Agreement and application for a
taxpayer identification number for the Issuer Trust;
(I) unless otherwise determined by the Property
Trustee or Holders of at least a Majority in Liquidation
Amount of the Capital Securities or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act, to
executing on behalf of the Issuer Trust (either acting alone
or together with any other Administrative Trustee) any
documents that the Administrative Trustees have the power to
execute pursuant to this Trust Agreement; and
(J) taking any action incidental to the foregoing as
the Issuer Trustees may from time to time determine is
necessary or advisable to give effect to the terms of this
Trust Agreement.
(ii) The Property Trustee shall have the power, duty and
authority to act on behalf of the Issuer Trust with respect to the
following matters:
(A) establishing the Payment Account;
(B) receiving the Debentures;
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(C) collecting interest, principal and any other
payments made in respect of the Debentures and the holding of
such amounts in the Payment Account;
(D) distributing through any Paying Agent of amounts
distributable to the Holders in respect of the Trust
Securities;
(E) exercising all of the rights, powers and
privileges of a holder of the Debentures;
(F) sending notices of default and other information
regarding the Trust Securities and the Debentures to the
Holders in accordance with this Trust Agreement;
(G) distributing the Trust Property in accordance
with the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement,
winding up the affairs of and liquidating the Issuer Trust and
preparing, executing and filing the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(I) after an Event of Default (other than under
paragraph (b), (c), (d) or (e) of the definition of such term
if such Event of Default is by or with respect to the Property
Trustee) taking of any action incidental to the foregoing as
the Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this
Trust Agreement and to protect and conserve the Trust Property
for the benefit of the Holders (without consideration of the
effect of any such action on any particular Holder);
(J) performing any of the duties, liabilities, powers
or the authority of the Administrative Trustees set forth in
Section 2.7(a)(i)(D), (E) and (I).
(b) So long as this Trust Agreement remains in effect, the Issuer
Trust (or the Issuer Trustees acting on behalf of the Issuer Trust) shall not
undertake any business, activities or transaction except as expressly provided
herein or contemplated hereby. In particular, the Issuer Trustees shall not (i)
acquire any investments or engage in any activities not authorized by this
Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge,
set-off or otherwise dispose of any of the Trust Property or interests therein,
including to Holders, except as expressly provided herein, (iii) take any
action that would reasonably be expected to cause the Issuer Trust to become
taxable as a corporation or classified as other than a grantor trust for United
States Federal income tax purposes, (iv) incur any indebtedness for borrowed
money or issue any other debt, or (v) take or consent to any
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action that would result in the placement of a Lien on any of the Trust
Property. The Administrative 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 Issuer Trust or the Holders in their capacity as
Holders.
(c) In connection with the issue and sale of the Capital Securities,
the Depositor shall have the right and responsibility to assist the Issuer
Trust with respect to, or effect on behalf of the Issuer 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) the preparation by the Issuer Trust of a prospectus and
registration statement under the Securities Act and the Trust
Indenture Act in relation to the Capital Securities, including any
amendments thereto and the taking of any action necessary or desirable
to effect the Exchange Offer;
(ii) the determination of the States, or other jurisdictions,
if any, in which to take appropriate action to qualify or register for
sale all or part of the Capital Securities and the determination of
any and all such acts, other than actions that must be taken by or on
behalf of the Issuer Trust, and the advice to the Issuer Trustees of
actions they must take on behalf of the Issuer Trust, and the
preparation for execution and filing of any documents to be executed
and filed by the Issuer Trust or on behalf of the Issuer Trust, as the
Depositor deems necessary or advisable in order to comply with the
applicable laws of any such States in connection with the sale of the
Capital Securities;
(iii) the compliance by the Issuer Trust with the Registration
Rights Agreement;
(iv) the preparation and filing by the Issuer Trust with the
Commission and the execution on behalf of the Issuer Trust of a
registration statement on the appropriate form in relation to the
Capital Securities, including any amendments thereto and the taking of
any action necessary or desirable to sell the Capital Securities in a
transaction or a series of transactions pursuant thereto;
(v) if so determined by the Depositor, the preparation for
filing by the Issuer Trust and execution on behalf of the Issuer Trust
of 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 Capital Securities;
(vi) if so determined by the Depositor, the preparation for
filing by the Issuer Trust with the Commission and the execution on
behalf of the Issuer Trust of a registration statement on Form 8-A
relating to the registration of the Capital
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Securities under Section 12(b) or 12(g) of the Exchange Act, including
any amendments thereto; and
(vii) the taking of any other actions necessary or desirable
to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Issuer Trust and to operate the Issuer Trust so that the Issuer Trust will
not be deemed to be an "investment company" required to be registered under the
Investment Company Act, and will not be taxable as a corporation or classified
as other than a grantor trust for United States Federal income tax purposes and
so that the Debentures will be treated as indebtedness of the Depositor for
United States Federal income tax purposes. In this connection, each
Administrative Trustee and the Holder of the Common Securities are authorized
to take any action, not inconsistent with applicable law, the Certificate of
Trust or this Trust Agreement, that such Administrative Trustee or Holder of
the Common Securities determines in its discretion to be necessary or desirable
for such purposes, as long as such action does not adversely affect in any
material respect the interests of the Holders of the Outstanding Capital
Securities. In no event shall the Issuer Trustees be liable to the Issuer Trust
or the Holders for any failure to comply with this section that results from a
change in law or regulation or in the interpretation thereof.
SECTION 2.8. Assets of Trust.
The assets of the Issuer Trust shall consist of the Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered
by the Property Trustee in trust for the benefit of the Issuer Trust and the
Holders in accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and its agents 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
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shall be held by the Property Trustee in the Payment Account for the exclusive
benefit of the Holders 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 of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including any Additional Distributions)
will be made on the Trust Securities at the rate and on the dates that payments
of interest (including any Additional Interest, as defined in the Indenture)
are made on the Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative,
and shall accumulate whether or not there are funds of the Issuer
Trust available for the payment of Distributions. Distributions shall
accumulate from January 29, 1997, and, except in the event (and to the
extent) that the Depositor exercises its right to defer the payment of
interest on the Debentures pursuant to the Indenture, shall be payable
semi-annually in arrears on January 15 and July 15 of each year,
commencing on July 15, 1997. If any date on which a Distribution is
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 that is a Business Day (and without any interest or other payment
in respect of any such delay), with the same force and effect as if
made on the date on which such payment was originally payable (each
date on which distributions are payable in accordance with this
Section 4.1(a), a "Distribution Date").
(ii) The Trust Securities shall be entitled to Distributions
payable at a rate, not including Additional Distributions, of 8.92%
per annum of the Liquidation Amount of the Trust Securities. The
amount of Distributions payable for any period less than a full
Distribution period shall be computed on the basis of a 360-day year
of twelve 30-day months and the actual number of days elapsed in a
partial month in a period. Distributions payable for each full
Distribution period will be computed by dividing the rate per annum by
two. The amount of Distributions payable for any period shall include
any Additional Distributions in respect of such period.
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(iii) Distributions on the Trust Securities shall be made by
the Property Trustee from the Payment Account and shall be payable on
each Distribution Date only to the extent that the Issuer Trust has
funds then on hand and available in the Payment Account for the
payment of such Distributions.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be at the close of business on the fifteenth
day (whether or not a Business Day) next preceding the relevant Distribution
Date.
SECTION 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of
the Debentures, the Issuer 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 Security Register. All
notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the
estimate of the Redemption Price provided pursuant to (and as defined
in) the Indenture together with a statement that it is an estimate and
that the actual Redemption Price will be calculated on the third
Business Day prior to the Redemption Date (and, if an estimate is
provided, that a further notice shall be sent of the actual Redemption
Price on the date on which such Redemption Price is calculated);
(iii) the CUSIP number or CUSIP numbers of the Capital
Securities affected;
(iv) if less than all the Outstanding Trust Securities are to
be redeemed, the identification and the aggregate Liquidation Amount
of the particular Trust Securities to be redeemed;
(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 accumulate on and after
such date, except as provided in Section 4.2(d) below; and
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(vi) the place or places where the Trust Securities are to be
surrendered for the payment of the Redemption Price.
The Issuer Trust in issuing the Trust Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall
indicate the "CUSIP" numbers of the Trust Securities in notices of redemption
and related materials as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Trust Securities or as contained in any notice
of redemption and related materials.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the
extent that the Issuer Trust has funds then on hand and available in the
Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, with
respect to Book-Entry Capital Securities, irrevocably deposit with the Clearing
Agency for such Book-Entry Capital Securities, to the extent available
therefor, funds sufficient to pay the applicable Redemption Price and will give
such Clearing Agency irrevocable instructions and authority to pay the
Redemption Price to the Holders of the Capital Securities. With respect to
Capital Securities that are not Book-Entry Capital Securities, the Property
Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying
Agent or Paying Agents, to the extent available therefor, funds sufficient to
pay the applicable Redemption Price and will give the Paying Agent or Paying
Agents irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Capital Securities upon surrender of their Capital
Securities Certificates. Notwithstanding the foregoing, Distributions payable
on or prior to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Securities Register 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
Holders holding Trust Securities so called for redemption will cease, except
the right of such Holders to receive the Redemption Price and any Distribution
payable in respect of the Trust Securities on or prior to the Redemption Date,
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 will be made on
the next succeeding day that is a Business Day (without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in 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
any Trust Securities called for redemption is improperly
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withheld or refused and not paid either by the Issuer Trust or by the Depositor
pursuant to the Guarantee Agreement, Distributions on such Trust Securities
will continue to accumulate, as set forth in Section 4.1, from the Redemption
Date originally established by the Issuer Trust for such Trust Securities to
the date such Redemption Price is actually paid, in which case the actual
payment date will be the date fixed for redemption for purposes of calculating
the Redemption Price.
(e) Subject to Section 4.3(a), 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 pro
rata to the Common Securities and the Capital Securities based upon the
relative Liquidation Amounts of such classes. The particular Capital Securities
to be redeemed shall be selected on a pro rata basis based upon their
respective Liquidation Amounts not more than 60 days prior to the Redemption
Date by the Property Trustee from the Outstanding Capital Securities not
previously called for redemption, provided that so long as the Capital
Securities are in book-entry-only form, such selection shall be made in
accordance with the customary procedures for the Clearing Agency for the
Capital Securities, and provided further that, after giving effect to such
redemption, no Holder shall hold Capital Securities with an aggregate
Liquidation Amount of less than $100,000. The Property Trustee shall promptly
notify the Securities Registrar in writing of the Capital Securities selected
for redemption and, in the case of any Capital Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate, in the case of
any Capital Securities redeemed or to be redeemed only in part, to the portion
of the aggregate Liquidation Amount of Capital Securities that has been or is
to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including any Additional Distributions)
on, the Redemption Price of, and the Liquidation Distribution in respect of the
Trust Securities, as applicable, shall be made, subject to Section 4.2(e), pro
rata among the Common Securities and the Capital Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date, Redemption Date or Liquidation Date any Event of Default
resulting from a Debenture Event of Default specified in Section 5.1(1) or
5.1(2) of the Indenture shall have occurred and be continuing, no payment of
any Distribution (including any Additional Distributions) on, Redemption Price
of, or Liquidation Distribution in respect 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 any Additional Distributions)
on all Outstanding Capital Securities for all Distribution periods terminating
on or prior thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all Outstanding Capital Securities then
called for redemption, or in the case of payment of the Liquidation
Distribution the full amount of such Liquidation Distribution on all
Outstanding Capital
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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 any Additional Distributions) on, the
Redemption Price of or the Liquidation Distribution in respect of the Capital
Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of the Common Securities shall
have no right to act with respect to any such Event of Default under this Trust
Agreement until the effect of all such Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated. Until all
such Events of Default under this Trust Agreement with respect to the Capital
Securities have been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders of the Capital Securities and
not on behalf of the Holder of the Common Securities, and only the Holders of
the Capital Securities will have the right to direct the Property Trustee to
act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including any Additional Distributions) or
of the Redemption Price, Liquidation Amount or any other amounts in respect of
the Capital Securities shall be made by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities Register
or, if the Capital Securities are held by a Clearing Agency, such Distributions
shall be made to the Clearing Agency in immediately available funds. 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 all the Common
Securities.
SECTION 4.5. Tax Returns and Reports.
The Administrative Trustees 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 Issuer Trust. In this regard, the Administrative Trustees shall (a)
prepare and file (or cause to be prepared and filed) all Internal Revenue
Service forms required to be filed in respect of the Issuer Trust in each
taxable year of the Issuer Trust, and (b) prepare and furnish (or cause to be
prepared and furnished) to each Holder all Internal Revenue Service forms
required to be provided by the Issuer Trust. The Administrative Trustees shall
provide the Depositor and the Property Trustee with a copy of all such returns
and reports promptly after such filing or furnishing. The Issuer Trustees
shall comply with United States Federal withholding and backup withholding tax
laws and information reporting requirements with respect to any payments to
Holders under the Trust Securities.
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SECTION 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust.
Upon receipt under the Debentures of Additional Sums, the Property
Trustee shall promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Issuer Trust by
the United States or any other taxing authority.
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Capital Securities (or
any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (or Owner) has directly received pursuant to
Section 5.8 of the Indenture or Section 5.13 of this Trust Agreement.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership.
Upon the formation of the Issuer Trust and the contribution by the
Depositor pursuant to Section 2.3 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 Issuer Trust.
SECTION 5.2. The Trust Securities Certificates.
(a) The Capital Securities Certificates shall be issued in fully
registered form in minimum denominations of $100,000 Liquidation Amount (and in
blocks of at least 100 Capital Securities) and integral multiples of $1,000 in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $1,000 Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of the Issuer Trust
by manual signature of at least one Administrative Trustee. Trust Securities
Certificates bearing the manual signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Issuer 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 delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Holder, and shall be entitled to the rights and subject to the
obligations of a Holder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.5.
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(b) Upon their original issuance, Capital Securities Certificates may
be issued in the form of one or more Book-Entry Capital Securities Certificates
registered in the name of DTC, as Clearing Agency, or its nominee and deposited
with DTC or a custodian for DTC for credit by DTC to the respective accounts of
the Owners thereof (or such other accounts as they may direct).
(c) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.3. Execution and Delivery of Trust Securities Certificates.
At the Time of Delivery, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Issuer Trust and
delivered to or upon the written order of the Depositor, executed by an
authorized officer thereof, without further corporate action by the Depositor,
in authorized denominations.
SECTION 5.4. Book-Entry Capital Securities.
(a) Each Book-Entry Capital Securities Certificate issued under this
Trust Agreement shall be registered in the name of the Clearing Agency or a
nominee thereof and delivered to such Clearing Agency or a nominee thereof or
custodian therefor, and each such Book-Entry Capital Securities Certificate
shall constitute a single Capital Securities Certificate for all purposes of
this Agreement.
(b) Notwithstanding any other provision in this Trust Agreement, no
Book-Entry Capital Securities Certificate may be exchanged in whole or in part
for Capital Securities Certificates registered, and no transfer of a Book-Entry
Capital Securities Certificate in whole or in part may be registered, in the
name of any Person other than the Clearing Agency or a nominee thereof unless
(i) the Clearing Agency advises the Property Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Capital Securities
Certificates, and the Property Trustee is unable to locate a qualified
successor, (ii) the Issuer Trust at its option advises the Clearing Agency in
writing that it elects to terminate the book-entry system through the Clearing
Agency, or (iii) a Debenture Event of Default has occurred and is continuing.
Upon the occurrence of any event specified in clause (i), (ii) or (iii) above,
the Property Trustee shall notify the Clearing Agency and instruct the Clearing
Agency to notify all Owners of Book-Entry Capital Securities, the Delaware
Trustee and the Administrative Trustees of the occurrence of such event and of
the availability of the Definitive Capital Securities Certificates to Owners of
the Capital Securities requesting the same; provided, however, that no
Definitive Capital Securities Certificate shall be issued in an amount
representing less than 100 Capital Securities.
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(c) If any Book-Entry Capital Securities Certificate is to be
exchanged for other Capital Securities Certificates or canceled in whole, it
shall be surrendered by or on behalf of the Clearing Agency or its nominee for
exchange or cancellation as provided in this Article V. If any Book-Entry
Capital Securities Certificate is to be exchanged for other Capital Securities
Certificates or canceled in part, or if any other Capital Securities
Certificate is to be exchanged in whole or in part for Book-Entry Capital
Securities represented by a Book-Entry Capital Securities Certificate, then
either (i) such Book-Entry Capital Securities Certificate shall be so
surrendered for exchange or cancellation as provided in this Article V or (ii)
the aggregate Liquidation Amount represented by such Book-Entry Capital
Securities Certificate shall be reduced, subject to Section 5.2, or increased
by an amount equal to that portion of the Liquidation Amount represented by the
Book-Entry Capital Securities Certificate to be so exchanged or cancelled, or
equal to that portion of the Liquidation Amount represented by such other
Capital Securities Certificates to be so exchanged for Book-Entry Capital
Securities represented thereby, as the case may be, by means of an appropriate
adjustment made on the records of the Securities Registrar with notice to the
Property Trustee, whereupon the Property Trustee, in accordance with the
Applicable Procedures, shall instruct the Clearing Agency or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Book-Entry Capital Securities Certificate by the
Clearing Agency, accompanied by registration instructions, the Administrative
Trustees, or any one of them, shall, subject to Section 5.5(b) and as otherwise
provided in this Article V, execute the Definitive Capital Securities
Certificates issuable in exchange for such Book-Entry Capital Securities
Certificate (or any portion thereof) in accordance with the instructions of the
Clearing Agency; provided, however, that no Definitive Capital Securities
Certificate shall be issued in an amount representing less than 100 Capital
Securities. None of the Securities Registrar or the Issuer 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. The Definitive
Capital Securities Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
(d) Every Capital Securities Certificate executed and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Book-Entry
Capital Securities Certificate or any portion thereof, whether pursuant to this
Article V or Section 4.2 or otherwise, shall be executed and delivered in the
form of, and shall be, a Book-Entry Capital Securities Certificate, unless such
Capital Securities Certificate is registered in the name of a Person other than
the Clearing Agency or a nominee thereof.
(e) The Clearing Agency or its nominee, as registered owner of a
Book-Entry Capital Securities Certificate, shall be the Holder of such
Book-Entry Capital Securities Certificate for all purposes under this Agreement
and the Capital Securities, and Owners with respect to a Book-Entry Capital
Securities Certificate shall hold such interests pursuant to the Applicable
Procedures. The Securities Registrar and the Issuer Trustees shall be entitled
to deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the
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Book-Entry Capital Securities Certificates (including the payment of the
Liquidation Amount of and Distributions on the Book-Entry Capital Securities
represented thereby and the giving of instructions or directions by or to
Owners of Book-Entry Capital Securities represented thereby) as the sole
Holder of the Book-Entry Capital Securities represented thereby and shall have
no obligations to the Owners thereof. None of the Depositor, the Issuer
Trustees nor the Securities Registrar shall have any liability in respect of
any transfers effected by the Clearing Agency.
(f) The rights of the Owners of the Book-Entry Capital Securities
shall be exercised only through the Clearing Agency and shall be limited to
those established by law, the Applicable Procedures and agreements between such
Owners and the Clearing Agency and/or the Clearing Agency Participants.
SECTION 5.5. Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges.
(a) The Property Trustee shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 5.9, a register or registers (the
"Securities Register") in which the registrar and transfer agent with respect
to the Trust Securities (the "Securities Registrar"), subject to such
reasonable regulations as it may prescribe, shall provide for the registration
of Capital Securities Certificates and (subject to Section 5.11) Common
Securities Certificates and of transfers and exchanges of Capital Securities
Certificates as herein provided. The Property Trustee is hereby appointed
Securities Registrar for the purpose of registering Capital Securities
Certificates and (subject to Section 5.11) Common Securities and transfers and
exchanges thereof as provided herein.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.9, the
Administrative Trustees or any one of them shall execute and deliver to the
Property Trustee, and the Property Trustee shall deliver, in the name of the
designated transferee or transferees, one or more new Capital Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
and bearing such restrictive legends as may be required by this Agreement,
dated the date of execution by such Administrative Trustee or Trustees;
provided that no Holder may transfer any Capital Security if giving effect to
such transfer would cause any Holder to hold less than $100,000 aggregate
Liquidation Amount of Capital Securities. Any purported transfer prohibited by
the preceding proviso shall be null and void and of no force or effect and the
purported transferee of the affected Capital Securities shall be deemed to have
no interest whatsoever in such Capital Securities.
At the option of the Holder, Capital Securities Certificates may be
exchanged for other Capital Securities Certificates of the same series of any
authorized denominations, of like tenor and aggregate Liquidation Amount,
bearing such restrictive legends as may be required by this Agreement and
bearing a number not contemporaneously Outstanding, upon surrender of the
Capital Securities Certificates to be exchanged at such office or
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agency. Whenever any Capital Securities Certificates are so surrendered for
exchange, the Administrative Trustees or any one of them shall execute and
deliver to the Property Trustee, and the Property Trustee shall deliver, the
Capital Securities Certificates that the Holder making the exchange is entitled
to receive.
All Capital Securities issued upon any transfer or exchange of Capital
Securities shall evidence the same interest in the assets of the Issuer Trust,
and entitled to the same benefits under this Agreement, as the Capital
Securities surrendered upon such transfer or exchange.
The Securities Registrar shall not be required, (i) to issue, register
the transfer of or exchange any Capital Security during a period beginning at
the opening of business 15 days before the day of selection for redemption of
such Capital Securities pursuant to Article IV and ending at the close of
business on the day of mailing of the notice of redemption, or (ii) to register
the transfer of or exchange any Capital Security so selected for redemption in
whole or in part, except, in the case of any such Capital Security to be
redeemed in part, any portion thereof not to be redeemed.
Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to an Administrative
Trustee and the Securities Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Capital Securities
Certificate surrendered for registration of transfer or exchange shall be
cancelled and subsequently disposed of by the Property Trustee in accordance
with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities Certificates, but the Issuer Trust may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Capital Securities
Certificates.
(b) Notwithstanding any other provision of this Trust Agreement,
transfers and exchanges of Capital Securities Certificates and Book-Entry
Capital Securities shall be made only in accordance with this Section 5.5(b).
(i) Non-Book-Entry Capital Securities Certificate to
Book-Entry Capital Securities Certificate. If the Holder of a Capital
Securities Certificate (other than a Book-Entry Capital Securities
Certificate) wishes at any time to transfer all or any portion of such
Capital Securities Certificate to a Person who wishes to take delivery
thereof in the form of a beneficial interest in a Book-Entry Capital
Securities Certificate, such transfer may be effected only in
accordance with the provisions of this Clause (b)(i) and subject to
the Applicable Procedures. Upon receipt by the Securities Registrar of
(A) such Capital Securities Certificate as provided in Section 5.5(a)
and instructions satisfactory to the Securities Registrar directing
that
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a specified number of Book-Entry Capital Securities to be represented
by such Book-Entry Capital Securities Certificate not greater than the
number of Capital Securities represented by such Capital Securities
Certificate be credited to a specified Clearing Agency Participant's
account and (B) if the Capital Securities Certificate to be
transferred evidences Restricted Capital Securities, a Restricted
Securities Certificate duly executed by such Holder or such Holder's
attorney duly authorized in writing, then the Securities Registrar
shall cancel such Capital Securities Certificate (and issue a new
Capital Securities Certificate in respect of any untransferred portion
thereof) as provided in Section 5.5(a) and increase the aggregate
Liquidation Amount of the Book-Entry Capital Securities Certificate by
the Liquidation Amount of such Capital Securities so transferred as
provided in Section 5.4(c).
(ii) Non-Book-Entry Capital Securities Certificate to
Non-Book-Entry Capital Securities Certificate. A Capital Securities
Certificate that is not a Book-Entry Capital Securities Certificate
may be transferred, in whole or in part, to a Person who takes
delivery in the form of another Capital Securities Certificate that is
not a Book-Entry Capital Securities Certificate as provided in Section
5.5(a), provided that if the Capital Securities Certificate to be
transferred evidences Restricted Capital Securities, then the
Securities Registrar shall have received a Restricted Securities
Certificate duly executed by the transferor Holder or such Holder's
attorney duly authorized in writing.
(iii) Book-Entry Capital Securities Certificate to
Non-Book-Entry Capital Securities Certificate. A beneficial interest
in a Book-Entry Capital Securities Certificate may be exchanged for a
Capital Securities Certificate that is not a Book-Entry Capital
Securities Certificate as provided in Section 5.4.
(iv) Certain Initial Transfers of Non-Book-Entry Capital
Securities Certificates. In the case of Capital Securities
Certificates initially issued other than in global form, an initial
transfer or exchange of such Capital Securities Certificates that does
not involve any change in beneficial ownership may be made to an
Institutional Accredited Investor or Investors as if such transfer or
exchange were not an initial transfer or exchange, provided that
written certification shall be provided by the transferor and
transferee of such Capital Securities to the Securities Registrar that
such transfer or exchange does not involve a change in beneficial
ownership.
(v) Limitations Relating to Size of Blocks. Notwithstanding
any other provision of this Trust Agreement, Capital Securities may be
transferred or exchanged only in blocks having a Liquidation Amount of
not less than $100,000, and only if, following such transfer or
exchange, each Holder would hold Capital Securities with an aggregate
Liquidation Amount of not less than $100,000. Any transfer, exchange
or other disposition of Capital Securities in contravention of this
Section 5.5(b)(v) shall be deemed to be void and of no legal effect
whatsoever, any such transferee shall be deemed not to be the Holder
or Owner of such Capital
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Security for any purpose, including but not limited to the receipt of
Distributions on such Capital Securities, and such transferee shall be
deemed to have no interest whatsoever in such Capital Securities.
(c) The Depositor or an Administrative Trustee shall inform the
Property Trustee in writing of the effective date of any registration statement
registering the Capital Securities under the Securities Act and shall notify
the Property Trustee at any time when prospectuses may not be delivered with
respect to Capital Securities to be sold pursuant to such registration
statement. The Property Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the aforementioned
registration statement.
(d) Any purchaser or Holder of any Capital Securities or any interest
therein will be deemed to have represented by its purchase and holding thereof
that it either (i) is not a Plan or a Plan Asset Entity and is not purchasing
such Capital Securities on behalf of or with "plan assets" of any Plan, or (ii)
is eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38,
90-1 or 84-14 or another applicable exemption with respect to such purchase or
holding. The Securities Registrar may, and if the Depositor shall so request,
the Securities Registrar shall, before registering for transfer or exchange any
Capital Securities Certificates as provided in Sections 5.2, 5.4 or 5.5 of this
Trust Agreement, (A) require the purchaser or Holder of such Capital Securities
Certificates to confirm that it either (x) is not a Plan, a Plan Asset Entity
or a Person investing "plan assets" of any Plan or (y) is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, and
(B) if such purchaser or Holder does not provide such confirmation, require an
Opinion of Counsel or other evidence satisfactory to the Depositor of the
availability to such purchaser or Holder of another applicable exemption with
respect to such purchase or holding.
SECTION 5.6. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate, and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Issuer Trust shall execute 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 5.6, 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 5.6
shall constitute conclusive evidence of an undivided beneficial interest
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in the assets of the Issuer Trust corresponding to that evidenced by the lost,
stolen or destroyed Trust Securities Certificate, as if originally issued,
whether or not the lost, stolen or destroyed Trust Securities Certificate shall
be found at any time.
SECTION 5.7. Persons Deemed Holders.
The Issuer Trustees and the Securities Registrar shall each 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 and for all other purposes whatsoever,
and none of the Issuer Trustees and the Securities Registrar shall be bound by
any notice to the contrary.
SECTION 5.8. Access to List of Holders' Names and Addresses.
Each Holder and each Owner shall be deemed to have agreed not to hold
the Depositor or the Issuer Trustees accountable by reason of the disclosure of
its name and address, regardless of the source from which such information was
derived.
SECTION 5.9. Maintenance of Office or Agency.
The Administrative Trustees shall maintain an office or offices or
agency or agencies where Capital Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Issuer Trustees in respect of the Trust Securities Certificates may be
served. The Administrative Trustees initially designate The Colonial BancGroup,
Inc., One Commerce Street, Montgomery, Alabama 36104 as its office and agency
for such purposes. The Administrative Trustees shall give prompt written notice
to the Depositor, the Property Trustee and to the Holders of any change in the
location of the Securities Register or any such office or agency.
SECTION 5.10. Appointment of Paying Agents.
The Paying Agent or Agents shall make Distributions to Holders from
the Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Administrative
Trustees may revoke such power and remove the Paying Agent in its sole
discretion. The Paying Agent shall initially be the Bank and any co-paying
agent chosen by the Property Trustee and 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 Property Trustee. If the Bank shall no longer
be the Paying Agent or a successor Paying Agent shall resign or its authority
to act be revoked, the Administrative Trustees shall appoint a successor (which
shall be a bank or trust company) that is reasonably acceptable to the
Depositor to act as Paying Agent. Such successor Paying Agent or any additional
Paying Agent shall execute
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and deliver to the Issuer Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Issuer 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 Holders in trust for the
benefit of the Holders entitled thereto until such sums shall be paid to such
Holders. 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 8.1, 8.3 and 8.6 herein shall apply to the Bank also in its role as
Paying Agent, for so long as the Bank shall act as Paying Agent and, to the
extent applicable, to any other paying agent appointed hereunder. Any reference
in this Agreement to the Paying Agent shall include any co-paying agent unless
the context requires otherwise.
SECTION 5.11. Ownership of Common Securities by Depositor.
At the Time of Delivery, the Depositor shall acquire, and thereafter
shall retain, beneficial and record ownership of the Common Securities. Neither
the Depositor nor any successor Holder of the Common Securities may transfer
less than all the Common Securities, and the Depositor or any such successor
Holder may transfer the Common Securities only (i) in connection with a
consolidation or merger of the Depositor into another corporation, or any
conveyance, transfer or lease by the Depositor of its properties and assets
substantially as an entirety to any Person, pursuant to Section 8.1 of the
Indenture, or (ii) to the Depositor or an Affiliate of the Depositor in
compliance with applicable law (including the Securities Act of 1933, as
amended, and applicable state securities and blue sky laws). To the fullest
extent permitted by law, any attempted transfer of the Common Securities other
than as set forth in the next proceeding sentence shall be void. The
Administrative Trustees shall cause each Common Securities Certificate issued
to the Depositor to contain a legend stating substantially "THIS CERTIFICATE IS
NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN
COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT."
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Holders is
required under this Trust Agreement, for so long as Capital Securities are
represented by a Book-Entry Capital Securities Certificate, the Issuer Trustees
shall give all such notices and communications specified herein to be given to
the Clearing Agency, and shall have no obligations to the Owners.
SECTION 5.13. Rights of Holders; Waivers of Past Defaults.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Holders shall not have any right or title therein other than the undivided
beneficial interest in the assets of the Issuer
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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 Issuer
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 similar
rights and when issued and delivered to Holders against payment of the purchase
price therefor will be fully paid and nonassessable by the Issuer Trust. The
Holders of the Trust Securities, in their capacities as such, 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.
(b) For so long as any Capital Securities remain Outstanding, if, upon
a Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Capital Securities then
Outstanding shall have the right to make such declaration by a notice in
writing to the Property Trustee, the Depositor and the Debenture Trustee.
At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided in the
Indenture, if the Property Trustee fails to annul any such declaration and
waive such default, the Holders of at least a Majority in Liquidation Amount of
the Capital Securities, by written notice to the Property Trustee, the
Depositor and the Debenture Trustee, may rescind and annul such declaration and
its consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay
(A) all overdue installments of interest on all of
the Debentures,
(B) any accrued Additional Interest on all of the
Debentures,
(C) the principal of (and premium, if any, on) any
Debentures that have become due otherwise than by such
declaration of acceleration and interest and Additional
Interest thereon at the rate borne by the Debentures, and
(D) all sums paid or advanced by the Debenture
Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture Trustee
and the Property Trustee, their agents and counsel; and
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(ii) all Events of Default with respect to the Debentures,
other than the non-payment of the principal of the Debentures that has
become due solely by such acceleration, have been cured or waived as
provided in Section 5.13 of the Indenture.
The Holders of at least a Majority in Liquidation Amount of the
Capital Securities may, on behalf of the Holders of all the Trust Securities,
waive any past default or Event of Default under the Indenture, except a
default or Event of Default in the payment of principal or interest (unless
such default or Event of Default has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default or
Event of Default in respect of a covenant or provision that under the Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Debenture. No such rescission shall affect any subsequent default
or impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of any part of
the Capital Securities, a record date shall be established for determining
Holders of Outstanding Capital Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice that has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.13(b).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Indenture, upon a Debenture Event of Default specified in
Section 5.1(1) or 5.1(2) of the Indenture, any Holder of Capital Securities
shall have the right to institute a proceeding directly against the Depositor,
pursuant to Section 5.8 of the Indenture, for enforcement of payment to such
Holder of any amounts payable in respect of Debentures having an aggregate
principal amount equal to the aggregate Liquidation Amount of the Capital
Securities of such Holder (a "Direct Action"). Except as set forth in Section
5.13(b) and this Section 5.13(c), the Holders of Capital Securities shall have
no right to exercise directly any right or remedy available to the holders of,
or in respect of, the Debentures.
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(d) Except as otherwise provided in paragraphs (a), (b) and (c) of
this Section 5.13, the Holders of at least a Majority in Liquidation Amount of
the Capital Securities may, on behalf of the Holders of all the Trust
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist,
and any default or Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Capital Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Issuer 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 Holders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee on
behalf of the Issuer Trust, the Property Trustee shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or execute any trust or power conferred on the Property
Trustee with respect to the Debentures, (ii) waive any past default that may be
waived under Section 5.13 of the Indenture, (iii) exercise any right to rescind
or annul a declaration that the principal of all the Debentures shall be due
and payable, or (iv) consent to any amendment, modification or termination of
the Indenture or the Debentures, where such consent shall be required, without,
in each case, obtaining the prior approval of the Holders of at least a
Majority in Liquidation Amount of the Capital Securities, provided, however,
that where a consent under the Indenture would require the consent of each
Holder of Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Capital
Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Capital Securities,
except by a subsequent vote of the Holders of the Capital Securities. The
Property Trustee shall notify all Holders of the Capital Securities of any
notice of default received with respect to the Debentures. In addition to
obtaining the foregoing approvals of the Holders of the Capital Securities,
prior to taking any of the foregoing actions, the Issuer Trustees shall, at the
expense of the Depositor, obtain an Opinion of Counsel experienced in such
matters to the effect that such action shall not cause the Issuer Trust to be
taxable as a corporation or classified as other than a grantor trust for United
States Federal income tax purposes.
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(c) If any proposed amendment to the Trust Agreement provides for, or
the Issuer Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Capital Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Issuer Trust, other than pursuant to the terms of this Trust Agreement,
then the Holders of Outstanding Capital Securities as a class will be entitled
to vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Issuer Trust to be
taxable as a corporation or classified as other than a grantor trust for United
States Federal income tax purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Holders of the Capital Securities,
stating the time, place and purpose of the meeting, shall be given by the
Property Trustee pursuant to Section 10.8 to each Holder of Capital Securities,
at such Holder's registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the
meeting. Any adjourned meeting may be held as adjourned without further notice.
SECTION 6.3. Meetings of Holders of the Capital Securities.
No annual meeting of Holders is required to be held. The
Administrative Trustees, however, shall call a meeting of the Holders of the
Capital Securities to vote on any matter upon the written request of the
Holders of at least 25% in aggregate Liquidation Amount of the Outstanding
Capital Securities and the Administrative Trustees or the Property Trustee may,
at any time in their discretion, call a meeting of the Holders of the Capital
Securities to vote on any matters as to which such Holders are entitled to
vote.
The Holders of at least a Majority in Liquidation Amount of the
Capital Securities, present in person or by proxy, shall constitute a quorum at
any meeting of the Holders of the Capital Securities.
If a quorum is present at a meeting, an affirmative vote by the
Holders present, in person or by proxy, holding Capital Securities representing
at least a majority of the aggregate Liquidation Amount of the Capital
Securities held by the Holders present, either in person or by proxy, at such
meeting shall constitute the action of the Holders of the Capital Securities,
unless this Trust Agreement requires a greater number of affirmative votes.
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SECTION 6.4. Voting Rights.
Holders shall be entitled to one vote for each $1,000 of Liquidation
Amount represented by their Outstanding Trust Securities in respect of any
matter as to which such Holders are entitled to vote.
SECTION 6.5. Proxies, etc.
At any meeting of Holders, any Holder entitled to vote thereat 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 Issuer 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 Holders 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 Holder shall be deemed
valid unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. No proxy shall be valid more than
three years after its date of execution.
SECTION 6.6. Holder Action by Written Consent.
Any action that may be taken by Holders of Capital Securities at a
meeting may be taken without a meeting if Holders holding at least a Majority
in Liquidation Amount of the Capital Securities entitled to vote in respect of
such action (or such larger proportion thereof as shall be required by any
other provision of this Trust Agreement) shall consent to the action in
writing. Any action that may be taken by the Holder of all the Common
Securities may be taken if such Holder shall consent to the action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Holders 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 Holders or the payment of a
distribution or other action, as the case may be, as a record date for the
determination of the identity of the Holders of record for such purposes.
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SECTION 6.8. Acts of Holders.
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 Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as otherwise expressly provided herein,
such action shall become effective when such instrument or instruments are
delivered to an Administrative Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Trust Agreement and (subject to
Section 8.1) conclusive in favor of the Issuer Trustees, if made in the manner
provided in this Section 6.8.
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 such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's 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 that any Issuer Trustee receiving
the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Trust Security shall bind every future Holder
of the same Trust Security and the Holder 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 Issuer
Trustees, the Depositor or the Issuer Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Holder 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 among the Holders or the Issuer Trustees
with respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such Holder
or Issuer Trustee under this Article VI, then the determination of such matter
by the Property Trustee shall be conclusive with respect to such matter.
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SECTION 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Issuer Trust shall be open to inspection by Holders
during normal business hours for any purpose reasonably related to such
Holder's interest as a Holder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Holders that:
(a) the Property Trustee is a banking corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) the Delaware Trustee is a banking corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and the Delaware Trustee and constitutes the
valid and legally binding agreement of each of the Property Trustee and the
Delaware Trustee enforceable against each of them in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement
has been duly authorized by all necessary corporate or other action on the part
of the Property Trustee and the Delaware Trustee and does not require any
approval of stockholders of the Property Trustee and the Delaware Trustee and
such execution, delivery and performance
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will not (i) violate the Charter or By-laws of the Property Trustee or the
Delaware Trustee, (ii) violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Property Trustee or the
Delaware Trustee is a party or by which it is bound, or (iii) violate any law,
governmental rule or regulation of the United States or the State of Delaware,
as the case may be, governing the banking, trust or general powers of the
Property Trustee or the Delaware Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Delaware
Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein requires the consent or approval
of, the giving of notice to, the registration with or the taking of any other
action with respect to any governmental authority or agency under any existing
law of the United States or the State of Delaware governing the banking, trust
or general powers of the Property Trustee or the Delaware Trustee, as the case
may be; and
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal that,
individually or in the aggregate, would materially and adversely affect the
Issuer Trust or would question the right, power and authority of the Property
Trustee or the Delaware Trustee, as the case may be, to enter into or perform
its obligations as one of the Issuer Trustees under this Trust Agreement.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Holders that:
(a) the Trust Securities Certificates issued at the Time of Delivery
on behalf of the Issuer Trust have been duly authorized and will have been duly
and validly executed, issued and delivered by the Issuer Trustees pursuant to
the terms and provisions of, and in accordance with the requirements of, this
Trust Agreement and the Holders will be, as of such date, entitled to the
benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Issuer Trust (or the Issuer Trustees on behalf of the Issuer Trust) under
the laws of the State of Delaware or any political subdivision thereof in
connection with the execution, delivery and performance by either Issuer
Trustee of this Trust Agreement.
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ARTICLE VIII
THE ISSUER TRUSTEES; PAYING AGENTS
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Issuer Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, but subject to Section
8.1(c), no provision of this Trust Agreement shall require any of the Issuer
Trustees to expend or risk its or their own funds or otherwise incur any
financial liability in the performance of any of its or their duties hereunder,
or in the exercise of any of its or their rights or powers, if it or 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 it or
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 Issuer Trustees shall be subject to the provisions
of this Section 8.1. Nothing in this Trust Agreement shall be construed to
release an Administrative Trustee from liability for his or her own gross
negligent action, his or her own gross negligent failure to act, or his or her
own wilful misconduct. To the extent that, at law or in equity, an Issuer
Trustee has duties and liabilities relating to the Issuer Trust or to the
Holders, such Issuer Trustee shall not be liable to the Issuer Trust or to any
Holder for such Issuer Trustee's good faith reliance on the provisions of this
Trust Agreement. The provisions of this Trust Agreement, to the extent that
they restrict the duties and liabilities of the Issuer Trustees otherwise
existing at law or in equity, are agreed by the Depositor and the Holders to
replace such other duties and liabilities of the Issuer Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms hereof.
Each Holder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the Issuer
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 8.1(b) does not limit the liability of the Issuer
Trustees expressly set forth elsewhere in this Trust Agreement or, in the case
of the Property Trustee, in the Trust Indenture Act.
(c) If an Event of Default has occurred and is continuing, the
Property Trustee shall enforce this Trust Agreement for the benefit of the
Holders.
(d) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only
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such duties as are specifically set forth in this Trust Agreement (including
pursuant to Section 10.10), and no implied covenants shall be read into this
Trust Agreement against the Property Trustee. If an Event of Default has
occurred (that has not been cured or waived pursuant to Section 5.13), the
Property Trustee shall exercise such of the rights and powers vested in it by
this Trust 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.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee or the Delaware Trustee from liability for its own
negligent action, its own negligent failure to act, or its own wilful
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 Property
Trustee shall be determined solely by the express provisions
of this Trust Agreement (including pursuant to Section 10.10),
and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Trust Agreement (including pursuant to
Section 10.10); and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property 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 Property Trustee and conforming to the
requirements of this Trust Agreement; but in the case of any
such certificates or opinions that by any provision hereof or
of the Trust Indenture Act are specifically required to be
furnished to the Property Trustee, the Property Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Trust Agreement.
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property 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 at least a Majority in
Liquidation Amount of the Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Trust Agreement;
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(iv) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Payment Account shall be to deal with such Property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement and the
Trust Indenture Act;
(v) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section
3.1 and except to the extent otherwise required by law; and
(vi) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust Agreement, nor
shall the Property Trustee be liable for the default or misconduct of
any other Issuer Trustee or the Depositor.
(f) The Administrative Trustees shall not be responsible for
monitoring the compliance by the Issuer Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall either Administrative
Trustee be liable for the default or misconduct of any other Issuer Trustee or
the Depositor.
SECTION 8.2. Certain Notices.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such Event of
Default to the Holders and the Administrative Trustee, unless such Event of
Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such exercise
to the Holders and the Administrative Trustees, unless such exercise shall have
been revoked.
The Property Trustee shall not be deemed to have knowledge of any
Event of Default unless the Property Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this Trust
Agreement shall have obtained actual knowledge, of such Event of Default.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
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(a) the Property Trustee may 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, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action,
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein, or (iii) 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 Holders of the Capital Securities are entitled to vote under the
terms of this Trust Agreement, the Property Trustee shall deliver a notice to
the Depositor requesting the Depositor's opinion as to the course of action to
be taken and 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 Holders, in which event the Property Trustee shall have no liability except
for its own bad faith, negligence or wilful misconduct;
(c) any direction or act of the Depositor contemplated by this Trust
Agreement shall be sufficiently evidenced by an Officers' Certificate;
(d) any direction or act of an Administrative Trustee contemplated by
this Trust Agreement shall be sufficiently evidenced by a certificate executed
by such Administrative Trustee and setting forth such direction or act;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or re-registration thereof;
(f) the Property Trustee may consult with counsel (which counsel may
be counsel to the Depositor or any of its Affiliates, and may include any of
its employees) and the advice of such 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 and in accordance
with such advice; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
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(g) 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 Holders pursuant to this Trust Agreement, unless such
Holders shall have offered to the Property Trustee reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction; provided that, nothing
contained in this Section 8.3(g) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Trust Agreement;
(h) 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,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Holders, but the Property
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit;
(i) 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, bad faith or wilful misconduct with respect to
selection of any agent or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect
to enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders (which
instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action), (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; and
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on any Issuer 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 it 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 any Issuer Trustee shall be construed to be a
duty.
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SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Issuer Trust, and the Issuer Trustees
do not assume any responsibility for their correctness. The Issuer Trustees
shall not be accountable for the use or application by the Depositor of the
proceeds of the Debentures.
The Property Trustee may conclusively assume that any funds held by it
hereunder are legally available unless an officer of the Property Trustee
assigned to its Corporate Trust Administration department shall have received
written notice from the Depositor, any Holder or any other Issuer Trustee that
such funds are not legally available.
SECTION 8.5. May Hold Securities.
Any Issuer Trustee or any agent of any Issuer Trustee or the Issuer
Trust, in its individual or any other capacity, may become the owner or pledgee
of Trust Securities and, subject to Sections 8.8 and 8.13 and, except as
provided in the definition of the term "Outstanding" in Article I, may
otherwise deal with the Issuer Trust with the same rights it would have if it
were not an Issuer Trustee or such agent.
SECTION 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to each Issuer Trustee and Paying Agent from time to time
such reasonable compensation for all services rendered by them hereunder as may
be agreed by the Depositor and such Issuer Trustee or Paying Agent, as the case
may be, from time to time (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 each
Issuer Trustee and Paying Agent upon request for all reasonable expenses,
disbursements and advances incurred or made by each Issuer Trustee and Paying
Agent 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 negligence, bad faith or wilful misconduct; and
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Issuer Trustee, (ii) each Paying Agent, (iii) any
Affiliate of any Issuer Trustee, (iv) any officer, director, shareholder,
employee, representative or agent of any Issuer Trustee, and (v) any employee
or agent of the Issuer Trust (referred to herein as an "Indemnified Person")
from and against any loss, damage, liability, tax, penalty, expense or claim of
any kind or nature whatsoever incurred by such Indemnified Person by reason of
the creation, operation or termination of the Issuer Trust or any act or
omission performed
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or omitted by such Indemnified Person in good faith on behalf of the Issuer
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of authority conferred on such Indemnified Person by this Trust
Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of negligence, bad faith or wilful misconduct with
respect to such acts or omissions.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement.
No Issuer Trustee or Paying Agent may claim any Lien on any Trust
Property as a result of any amount due pursuant to this Section 8.6.
The Depositor, any Issuer Trustee and any Paying Agent may engage in
or possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Issuer Trust, and the Issuer Trust and the Holders of Trust Securities shall
have no rights by virtue of this Trust Agreement in and to such independent
ventures or the income or profits derived therefrom, and the pursuit of any
such venture, even if competitive with the business of the Issuer Trust, shall
not be deemed wrongful or improper. Neither the Depositor, any Paying Agent nor
any Issuer Trustee shall be obligated to present any particular investment or
other opportunity to the Issuer Trust even if such opportunity is of a
character that, if presented to the Issuer Trust, could be taken by the Issuer
Trust, and the Depositor, any Issuer Trustee or any Paying Agent shall have the
right to take for its own account (individually or as a partner or fiduciary)
or to recommend to others any such particular investment or other opportunity.
Any Issuer Trustee or Paying Agent may engage or be interested in any financial
or other transaction with the Depositor or any Affiliate of the Depositor, or
may act as depository for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Depositor or its
Affiliates.
SECTION 8.7. Corporate Property Trustee Required; Eligibility of
Issuer Trustees.
(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 is
a national or state chartered bank and eligible pursuant to the Trust Indenture
Act to act as such, and that has at the time of such appointment securities
rated in one of the three highest rating categories by a nationally recognized
statistical rating organization and 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 8.7 and to the
extent permitted by the Trust Indenture Act, 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 8.7, it shall resign
immediately in the manner and with
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the effect hereinafter specified in this Article. At the time of appointment,
the Property Trustee must have securities rated in one of the three highest
rating categories by a nationally recognized statistical rating organization.
(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 that
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 with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law and that shall
act through one or more persons authorized to bind such entity.
SECTION 8.8. Conflicting Interests.
(a) 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.
(b) The Guarantee Agreement and the Indenture shall be deemed to be
specifically described in this Trust Agreement for the purposes of clause (i)
of the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, 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, Depositor and the Administrative Trustees,
by agreed action of the majority of them shall have power to appoint, and upon
the written request of the Administrative Trustee and the Depositor shall for
such purpose join with the Administrative Trustees 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 the extent required by law to act as separate trustee of
any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section 8.9. Any co-trustee
or separate trustee appointed pursuant to this Section 8.9 shall either be (i)
a natural person who is at least 21 years of age and a resident of the United
States, or (ii) a legal entity with its
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principal place of business in the United States that shall act through one or
more persons authorized to bind such entity. If an Event of Default under the
Indenture shall have occurred and be continuing, the Property Trustee alone
shall have the power to make such appointment.
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:
(a) The Trust Securities shall be executed by one or more
Administrative Trustees, and the Trust Securities shall be delivered by the
Property Trustee, 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 Property Trustee specified
hereunder shall be exercised solely by the Property Trustee and not by such
co-trustee or separate trustee.
(b) 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.
(c) 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 8.9, and, in case a Debenture 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
resigning or removed may be appointed in the manner provided in this Section
8.9.
(d) 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
trustee hereunder.
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(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Issuer Trustee (the "Relevant
Trustee") and no appointment of a successor Issuer Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Issuer Trustee in accordance with the applicable requirements of
Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Holders. If the
instrument of acceptance by the successor Issuer Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within 60 days after
the giving of such notice of resignation, the Relevant Trustee may petition, at
the expense of the Depositor, any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by Act of the Holder
of the Common Securities. If a Debenture Event of Default shall have occurred
and be continuing, the Property Trustee or the Delaware Trustee, or both of
them, may be removed at such time by Act of the Holders of a Majority in
Liquidation Amount of the Capital Securities, delivered to the Relevant Trustee
(in its individual capacity and, in the case of the Property Trustee, on behalf
of the Issuer Trust). An Administrative Trustee may be removed by the Holder of
the Common Securities at any time.
If any Issuer Trustee shall resign, be removed or become incapable of
acting as Issuer Trustee, or if a vacancy shall occur in the office of any
Issuer Trustee for any cause, at a time when no Debenture Event of Default
shall have occurred and be continuing, the Holder of the Common Securities, by
Act delivered to the retiring Issuer Trustee, shall promptly appoint a
successor Issuer Trustee or Issuer Trustees, and such successor Issuer Trustee
shall comply with the applicable requirements of Section 8.11. If the Property
Trustee or the Delaware Trustee shall resign, be removed or become incapable of
continuing to act as the Property Trustee or the Delaware Trustee, as the case
may be, at a time when a Debenture Event of Default shall have occurred and be
continuing, the Holders of Capital Securities, by Act of the Holders of a
Majority in Liquidation Amount of the Capital Securities delivered to the
retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee
or Trustees, and such successor Issuer Trustee shall comply with the applicable
requirements of Section 8.11. If an Administrative Trustee shall resign, be
removed or become incapable of acting as Administrative Trustee, at a time when
a Debenture Event of Default shall have occurred and be continuing, the Holder
of the
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Common Securities by Act delivered to the Administrative Trustee shall promptly
appoint a successor Administrative Trustee or Administrative Trustees and such
successor Administrative Trustee or Trustees shall comply with the applicable
requirements of Section 8.11. If no successor Relevant Trustee shall have been
so appointed by the Holder of the Common Securities or the Holders of a
Majority in Liquidation Amount of the Capital Securities, as the case may be,
and accepted appointment in the manner required by Section 8.11, any Holder who
has been a Holder of Trust Securities for at least six months may, on behalf of
such Holder and all others similarly situated, or any other Issuer Trustee, may
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
The Property Trustee shall give notice of each resignation and each
removal of an Issuer Trustee and each appointment of a successor Issuer Trustee
to all Holders in the manner provided in Section 10.8 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, if any Delaware Trustee who is a natural person dies or becomes, in
the opinion of the Depositor, incompetent or incapacitated, the vacancy created
by such death, incompetence or incapacity may be filled by (a) the unanimous
act of the remaining Administrative Trustees if there are at least two of them
or (b) otherwise by the Depositor (with the successor in either case being a
Person who satisfies the eligibility requirement for the Delaware Trustee set
forth in Section 8.7).
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Issuer Trust, and (b) shall add to or change any of
the provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Issuer Trust by more than one Relevant
Trustee, it being understood that nothing herein or in such amendment shall
constitute such Relevant Trustees co-trustees and upon the execution and
delivery of such amendment the resignation or removal of the retiring Relevant
Trustee shall become effective to the extent provided therein and each 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 request of the Issuer Trust or any successor Relevant
Trustee such retiring Relevant Trustee shall duly assign, transfer and deliver
to such successor Relevant Trustee all Trust
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Property, all proceeds thereof and money held by such retiring Relevant Trustee
hereunder with respect to the Trust Securities and the Issuer Trust.
Upon request of any Issuer Trustee or any such successor Relevant
Trustee, the retiring Relevant Trustee or the Issuer Trust, as the case may be,
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 first or second preceding paragraph, as the case may
be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware Trustee 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 that such Person shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto.
SECTION 8.13. Preferential Collection of Claims Against Depositor or
Issuer Trust.
If and when the Property Trustee shall be or become a creditor of the
Depositor or the Issuer Trust (or any other obligor upon the Capital
Securities), the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
the Issuer Trust (or any such other obligor).
SECTION 8.14. Property Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Issuer Trust or any other obligor upon the Trust
Securities or the property of the Issuer Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any
Distributions on the Trust Securities shall then be due and payable and
irrespective of whether the Property Trustee shall have made any demand on the
Issuer Trust for the payment of any past due Distributions) shall be entitled
and empowered, to the fullest extent permitted by law, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Property Trustee (including any
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claim for the reasonable compensation, expenses, disbursements and advances of
the Property Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting
the Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 8.15. Reports by Property Trustee.
(a) Not later than January 31 of each year commencing with January 31,
1998, the Property Trustee shall transmit to all Holders in accordance with
Section 10.8, and to the Depositor, a brief report dated as of the immediately
preceding December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if
to the best of its knowledge it has continued to be eligible under
said Section, a written statement to such effect;
(ii) a statement that the Property Trustee has complied with
all of its obligations under this Trust Agreement during the
twelve-month period (or, in the case of the initial report, the period
since the Closing Date) ending with such December 31 or, if the
Property Trustee has not complied in any material respect with such
obligations, a description of such noncompliance; and
(iii) any change in the property and funds in its possession
as Property Trustee since the date of its last report and any action
taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its
opinion materially affects the Trust Securities.
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(b) In addition the Property Trustee shall transmit to Holders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or
self-regulatory organization upon which the Trust Securities are listed or
traded, with the Commission and with the Depositor.
SECTION 8.16. Reports to the Property Trustee.
Each of the Depositor and the Administrative Trustees on behalf of the
Issuer 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
the compliance certificate required by Section 314(a) of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act. The Depositor and the Administrative Trustees on behalf of
the Issuer Trust shall annually file with the Property Trustee a certificate
specifying whether such Person is in compliance with all of the terms and
covenants applicable to such Person hereunder.
SECTION 8.17. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Issuer 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 by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in the
form of an Officers' Certificate.
SECTION 8.18. Number of Issuer Trustees.
(a) The number of Issuer Trustees shall be four, provided that the
Property Trustee and the Delaware Trustee may be the same Person.
(b) If an Issuer Trustee ceases to hold office for any reason, a
vacancy shall occur. The vacancy shall be filled with an Issuer Trustee
appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer Trustee shall not
operate to annul, dissolve or terminate the Issuer Trust.
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SECTION 8.19. Delegation of Power.
(a) Any Administrative Trustee, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 such
Administrative Trustee's power for the purpose of executing any documents
contemplated in Section 2.7(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 or to the Depositor the doing of such things
and the execution of such instruments either in the name of the Issuer 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 this Trust Agreement.
SECTION 8.20. Appointment of Administrative Trustees.
(a) The Administrative Trustee shall initially be W. Flake Oakley and
Young J. Boozer, III, and their successors shall be appointed by the Holder of
all the Common Securities. The Administrative Trustees may resign or be removed
by the Holder of all the Common Securities at any time. Upon any resignation or
removal of an Administrative Trustee, the Depositor shall appoint a successor
Administrative Trustee. If at any time there is no Administrative Trustee, the
Property Trustee or any Holder who has been a Holder of Trust Securities for at
least six months may petition any court of competent jurisdiction for the
appointment of one or more Administrative Trustees.
(b) 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 this Section 8.20, the Administrative Trustees in
office, regardless of their number (and notwithstanding any other provision of
this Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.
(c) Notwithstanding the foregoing or any other provision of this Trust
Agreement, if any Administrative Trustee who is a natural person dies or
becomes, in the opinion of the Holder of all the Common Securities, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by the unanimous act of the remaining Administrative Trustees, if
there were at least two of them prior to such vacancy, and by the Depositor, if
there were not two such Administrative Trustees immediately prior to such
vacancy (with the successor being a Person who satisfies the eligibility
requirement for Administrative Trustees set forth in Section 8.7).
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ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier terminated, the Issuer Trust shall automatically
terminate on January 15, 2027 (the "Expiration Date"), following the
distribution of the Trust Property in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Holder of all the Common Securities;
(b) the written direction to the Property Trustee from the Holder of
all the Common Securities at any time to terminate the Issuer Trust and to
distribute the Debentures to Holders in exchange for the Capital Securities
(which direction is optional and wholly within the discretion of the Holder of
all the Common Securities);
(c) the redemption of all of the Capital Securities in connection with
the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Issuer Trust by a
court of competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Issuer Trustees
and the Issuer Trust created and continued hereby shall terminate upon the
latest to occur of the following: (a) the distribution by the Property Trustee
to Holders of all amounts required to be distributed hereunder upon the
liquidation of the Issuer Trust pursuant to Section 9.4, or upon the redemption
of all of the Trust Securities pursuant to Section 4.2; (b) the payment of any
expenses owed by the Issuer 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 Issuer Trust or the Holders.
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall be
liquidated by the Issuer Trustees as expeditiously as the Issuer Trustees
determine to be possible by distributing,
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after satisfaction of liabilities to creditors of the Issuer Trust as provided
by applicable law, to each Holder a Like Amount of Debentures, subject to
Section 9.4(d). Notice of liquidation 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 Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All such 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 Debentures; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Property Trustee and the Administrative Trustees
shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the liquidation of the Issuer Trust and distribution of the Debentures to
Holders, the Property Trustee, either itself acting as exchange agent or
through the appointment of a separate exchange agent, shall establish a record
date for such distribution (which shall be not more than 45 days prior to the
Liquidation Date) and establish such procedures as it shall deem appropriate to
effect the distribution of Debentures in exchange for the Outstanding Trust
Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
Trust Securities Certificates to the exchange agent for exchange, (iii) any
Trust Securities Certificates not so surrendered for exchange will be deemed to
represent a Like Amount of Debentures bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on such Trust
Securities 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
Debentures), and (iv) all rights of Holders holding Trust Securities will
cease, except the right of such Holders to receive Debentures upon surrender of
Trust Securities Certificates.
(d) If, notwithstanding the other provisions of this Section 9.4,
whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner
provided herein is determined by the Property Trustee not to be practical, or
if an Early Termination Event specified in clause (c) of
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Section 9.2 occurs, the Trust Property shall be liquidated, and the Issuer
Trust shall be dissolved, wound-up or terminated, by the Property Trustee in
such manner as the Property Trustee determines. In such event, on the date of
the dissolution, winding-up or other termination of the Issuer Trust, Holders
will be entitled to receive out of the assets of the Issuer Trust available for
distribution to Holders, after satisfaction of liabilities to creditors of the
Issuer Trust as provided by applicable law, an amount equal to the Liquidation
Amount per Trust Security plus accumulated and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"). If,
upon any such dissolution, winding up or termination, the Liquidation
Distribution can be paid only in part because the Issuer 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 Issuer
Trust on the Trust Securities shall be paid on a pro rata basis (based upon
Liquidation Amounts). The Holder of all the Common Securities will be entitled
to receive Liquidation Distributions upon any such dissolution, winding-up or
termination pro rata (determined as aforesaid) with Holders of Capital
Securities, except that, if a Debenture Event of Default specified in Section
5.1(1) or 5.1(2) of the Indenture has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities as provided in
Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of
Issuer Trust.
The Issuer Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to this Section 9.5. At the request of the Holder of all the Common Securities,
with the consent of the Administrative Trustees, but without the consent of the
Holders of the Outstanding Capital Securities, the Issuer Trust may merge with
or into, consolidate, amalgamate, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any State; provided, that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Issuer Trust with respect to the Capital Securities, or (b) substitutes for the
Capital Securities other securities having substantially the same terms as the
Capital Securities (the "Successor Securities") so long as the Successor
Securities have the same priority as the Capital Securities with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii) a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee is appointed to hold the Debentures, (iii) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not cause the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization that
then assigns a rating to the Capital Securities, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of
the Capital Securities (including any Successor Securities) in any material
respect, (v) such successor entity has a purpose substantially identical to
that of the Issuer Trust, (vi) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Depositor has
received an Opinion of Counsel to the effect that (a) such
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merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the Holders
of the Capital Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Issuer Trust nor such
successor entity will be required to register as an "investment company" under
the Investment Company Act, and (vii) the Depositor or its permitted transferee
owns all of the Common Securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee Agreement. Notwithstanding the foregoing,
the Issuer Trust shall not, except with the consent of holders of all of the
Capital Securities, 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 other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause
the Issuer Trust or the successor entity to be taxable as a corporation or
classified as other than a grantor trust for United States Federal income tax
purposes.
The transactions contemplated by the Registration Rights
Agreement shall not be prohibited by this Section 9.5.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders.
Except as set forth in Section 9.2, the death or incapacity of any
person having an interest, beneficial or otherwise, in Trust Securities shall
not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such person or any Holder for such person, to claim
an accounting, take any action or bring any proceeding in any court 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 10.2. Amendment.
(a) This Trust Agreement may be amended from time to time by the
Issuer Trustees and the Holder of the Common Securities, without the consent of
any Holder of the Capital Securities, (i) to cure any ambiguity, correct or
supplement any provision herein that 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, 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 Issuer Trust will not be taxable as a corporation
or will be classified as a grantor trust for
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United States Federal income tax purposes at all times that any Trust
Securities are Outstanding or to ensure that the Issuer Trust will not be
required to register as an "investment company" under the Investment Company
Act; provided, however, that in either case (i) or (ii) such action shall not
adversely affect in any material respect the interests of any Holder.
(b) Except as provided in Section 10.2(c) hereof, any provision of
this Trust Agreement may be amended by the Issuer Trustees and the Holder of
the Common Securities and with (i) the consent of Holders of at least a
Majority in Liquidation Amount of the Capital Securities, and (ii) receipt by
the Issuer Trustees of an Opinion of Counsel to the effect that such amendment
or the exercise of any power granted to the Issuer Trustees in accordance with
such amendment will not cause the Issuer Trust to be taxable as a corporation
for United States Federal income tax purposes or affect the Issuer Trust's
exemption from status as an "investment company" under the Investment Company
Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Holder (such consent
being obtained in accordance with Section 6.3 or 6.6 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, or (ii) restrict the right of a Holder to institute suit
for the enforcement of any such payment on or after such date; and
notwithstanding any other provision herein, without the unanimous consent of
the Holders (such consent being obtained in accordance with Section 6.3 or 6.6
hereof), this paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Issuer Trustee shall enter into or consent to any amendment to this Trust
Agreement that would cause the Issuer Trust to fail or cease to qualify for the
exemption from status as an "investment company" under the Investment Company
Act or to be taxable as a corporation or to be classified as other than a
grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Administrative Trustees, this
Trust Agreement may not be amended in a manner that imposes any additional
obligation on the Depositor or the Administrative Trustees.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees or the Property Trustee shall promptly provide to
the Depositor a copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement that affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive
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an Opinion of Counsel and an Officers' Certificate stating that any amendment
to this Trust Agreement is in compliance with this Trust Agreement.
SECTION 10.3. Separability.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 10.4. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
HOLDERS, THE ISSUER TRUST, THE DEPOSITOR AND THE ISSUER TRUSTEES WITH RESPECT
TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS. THE PROVISIONS OF SECTION 3540 OF
TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THIS TRUST.
SECTION 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no Distributions
shall accumulate on such unpaid amount for the period after such date.
SECTION 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Issuer Trust and any Issuer
Trustee, including any successor by operation of law. Except in connection with
a consolidation, merger or sale involving the Depositor that is permitted under
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.7. Headings.
The Article and Section headings are for convenience only and shall
not affect the construction of this Trust Agreement.
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SECTION 10.8. Reports, Notices and Demands.
(a) Any report, notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or
served to or upon any Holder 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, (a) in the
case of a Holder of Capital Securities, to such Holder as such Holder's name
and address may appear on the Securities Register; and (b) in the case of the
Holder of the Common Securities or the Depositor, to The Colonial BancGroup,
Inc., One Commerce Street, Montgomery, Alabama 36104, Attention: W. Flake
Oakley, facsimile no.: (334) 240-6019, or to such other address as may be
specified in a written notice by the Holder of the Common Securities or the
Depositor, as the case may be, to the Property Trustee. Such notice, demand or
other communication to or upon a Holder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission. Such notice, demand or other communication to or upon the
Depositor shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Depositor.
(b) Any notice, demand or other communication that by any provision
of this Trust Agreement is required or permitted to be given or served to or
upon the Issuer Trust or any Issuer Trustee 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, (a) in the
case of the Property Trustee to Wilmington Trust Company, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890, facsimile (302) 651-8882,
Attention: Corporate Trust Administration; (b) in the case of the Delaware
Trustee, to Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890, facsimile (302) 651-8882, Attention:
Corporate Trust Administration; (c) in the case of the Administrative Trustees,
to them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of Colonial Capital II; and (d) in the case of the
Issuer Trust, to its principal executive office specified in Section 2.2, with
a copy to each of the Property Trustee, the Delaware Trustee and the
Administrative Trustees, or, in each such case, to such other address as may be
specified in a written notice by the applicable Person to the Property Trustee,
the Depositor and the Holders. Such notice, demand or other communication to or
upon the Property Trustee, the Delaware Trustee, the Administrative Trustees or
the Issuer Trust shall be deemed to have been sufficiently given or made only
upon actual receipt of the writing by the Property Trustee, the Delaware
Trustee, such Administrative Trustees or the Issuer Trust, as the case may be.
SECTION 10.9. Agreement Not to Petition.
Each of the Issuer Trustees and the Depositor agree for the benefit of
the Holders that, until at least one year and one day after the Issuer Trust
has been terminated in accordance with Article IX, they shall not file, or join
in the filing of, a petition against the
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Issuer Trust under any bankruptcy, insolvency, reorganization or other similar
law (including the United States Bankruptcy Code) (collectively, "Bankruptcy
Laws") or otherwise join in the commencement of any proceeding against the
Issuer Trust under any Bankruptcy Law. The Property Trustee and the Depositor
agree, for the benefit of Holders, that if the Depositor or any Issuer Trustee
takes action in violation of this Section 10.9, then at the expense of the
Depositor, the Property Trustee or Depositor, as the case may be, shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such petition by the Depositor against the Issuer 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 estopped and precluded therefrom and such
other defenses, if any, as counsel for the Issuer Trustees or the Issuer Trust
may assert.
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) The Trust Indenture Act shall apply as a matter of contract to
this Trust Agreement for purposes of interpretation, construction and defining
the rights and obligations hereunder. Except as otherwise expressly provided
herein, if and to the extent that any provision of this Trust 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.
(b) The Property Trustee shall be the only Issuer Trustee that is a
trustee for the purposes of the Trust Indenture Act.
(c) 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 Issuer Trust.
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee
Agreement, Indenture and Registration Rights Agreement.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE
AGREEMENT, AND THE INDENTURE, AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE GUARANTEE AGREEMENT AND THE INDENTURE, AND SHALL CONSTITUTE
THE AGREEMENT OF THE ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS
AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE ISSUER TRUST AND SUCH HOLDER AND SUCH OTHERS.
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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.
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.
THE COLONIAL BANCGROUP, INC.
as Depositor
By:
-----------------------------------------
Name: W. Flake Oakley
Title: Executive Vice President
and Chief Financial Officer
WILMINGTON TRUST COMPANY,
as Property Trustee
By:
-----------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name: W. Flake Oakley
as Administrative Trustee
By:
-----------------------------------------
Name: Young J. Boozer, III
as Administrative Trustee
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EXHIBIT 4(E)
This Capital Securities Certificate is a Book-Entry Capital Securities
Certificate within the meaning of the Trust Agreement hereinafter referred to
and is registered in the name of a Depositary or a nominee of a Depositary.
This Capital Securities Certificate is exchangeable for Capital Securities
Certificates registered in the name of a person other than the Depositary or
its nominee only in the limited circumstances described in the Trust Agreement
and may not be transferred except as a whole 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, except in the limited circumstances described in the
Trust Agreement.
Unless this Capital Securities Certificate is presented by an
authorized representative of The Depository Trust Company, a New York
corporation ("DTC"), to Colonial Capital II or its agent for registration of
transfer, exchange or payment, and any Capital Securities Certificate issued is
registered in the name of Cede & Co. or such other name as is requested by an
authorized representative of DTC (and any payment is 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 A PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"),
NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL SECURITIES CERTIFICATE OR
ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH
RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS CAPITAL
SECURITIES CERTIFICATE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF THAT IT EITHER (A) IS NOT A PLAN
OR A PLAN ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR
WITH "PLAN ASSETS" OF ANY PLAN OR (B) IS ELIGIBLE FOR THE
<PAGE> 2
EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH
RESPECT TO SUCH PURCHASE OR HOLDING.
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<PAGE> 3
CERTIFICATE NUMBER NUMBER OF CAPITAL SECURITIES
P-1 [70,000]
CUSIP NO. _________
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
COLONIAL CAPITAL II
8.92% CAPITAL SECURITIES, SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Colonial Capital II, a statutory business trust formed under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that CEDE & CO.
(the "Holder") is the registered owner of [SEVENTY THOUSAND (70,000)] capital
securities of the Issuer Trust representing a preferred undivided beneficial
interest in the assets of the Issuer Trust and designated the 8.92% Capital
Securities, Series A (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). The Capital Securities are transferable on the books and
records of the Issuer 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 5.5 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities are set forth in, and this certificate and
the Capital Securities represented hereby are issued and shall in all respects
be subject to the terms and provisions of, the Amended and Restated Trust
Agreement of the Issuer Trust, dated as of ____________, 1997, as the same may
be amended from time to time (the "Trust Agreement"), among The Colonial
BancGroup, Inc., a Delaware corporation, as Depositor, Wilmington Trust
Company, as Delaware Trustee and as Property Trustee, the Administrative
Trustees named therein and the Holders of the Trust Securities, including the
designation of the terms of the Capital Securities as set forth therein. The
Holder is entitled to the benefits of the Guarantee Agreement, dated as of
_____________, 1997 (the "Guarantee Agreement"), entered into by The Colonial
BancGroup, Inc., a Delaware corporation, and Wilmington Trust Company, as
guarantee trustee, to the extent provided therein. The Property Trustee will
furnish a copy of the Trust Agreement and the Guarantee Agreement to the Holder
without charge upon written request to the Issuer Trust at its principal place
of business or registered office.
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<PAGE> 4
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
This Capital Securities Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
All capitalized terms used but not defined in this Capital Securities
Certificate are used with the meanings specified in the Trust Agreement,
including the exhibits thereto.
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<PAGE> 5
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer Trust
has executed this Capital Securities Certificate this _____ day of __________,
1997.
COLONIAL CAPITAL II
By:
-----------------------------------
Name: W. Flake Oakley
Administrative Trustee
<PAGE> 1
EXHIBIT 4(F)
THE COLONIAL BANCGROUP, INC.
8.92% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
No. A-1 $72,165,000
THE COLONIAL BANCGROUP, INC., a corporation organized and existing
under the laws of Delaware (hereinafter called the "Corporation", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to WILMINGTON TRUST COMPANY, as Property
Trustee of the Issuer Trust referred to below, or registered assigns, the
principal sum of Seventy Two Million One Hundred Sixty Five Thousand Dollars on
January 15, 2027, or such other principal amount represented hereby as may be
set forth in the records of the Securities Registrar hereinafter referred to in
accordance with the Indenture. The Corporation further promises to pay interest
on said principal sum from January 29, 1997, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for,
semi-annually (subject to deferral as set forth herein) in arrears on January
15 and July 15 of each year, commencing July 15, 1997, at the Interest Rate (as
defined on the reverse hereof), together with Additional Sums, if any, as
provided in Section 10.6 of the Indenture, until the principal hereof is paid
or duly provided for or made available for payment; provided that any overdue
principal, premium or Additional Sums and any overdue installment of interest
shall bear Additional Interest at the Interest Rate (to the extent that the
payment of such interest shall be legally enforceable), compounded
semi-annually, from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand. The amount
of interest payable for any period less than a full interest period shall be
computed on the basis of a 360-day year of twelve 30-day months and the actual
days elapsed in a partial month in such period. The amount of interest payable
for any full interest period shall be computed by dividing the applicable rate
per annum by two. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest installment, which shall be the fifteenth day (whether or not
a Business Day) next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall 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 Security (or one or more Predecessor Securities) 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 Securities 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 on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
<PAGE> 2
So long as no Event of Default has occurred and is continuing, the
Corporation shall have the right, at any time during the term of this Security,
from time to time to defer the payment of interest on this Security for up to
10 consecutive semi-annual interest payment periods with respect to each
deferral period (each an "Extension Period"), at the end of which the
Corporation shall pay all interest then accrued and unpaid including any
Additional Interest, as provided below; provided, however, that no Extension
Period shall extend beyond the Stated Maturity of the principal of this
Security and no such Extension Period may end on a date other than an Interest
Payment Date; and provided, further, however, that during any such Extension
Period, the Corporation shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Corporation's capital stock, or (ii) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Corporation that rank pari passu in all
respects with or junior in interest to this Security (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Corporation in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of
capital stock of the Corporation (or securities convertible into or exercisable
for such capital stock) as consideration in an acquisition transaction entered
into prior to the applicable Extension Period, (b) as a result of an exchange
or conversion of any class or series of the Corporation's capital stock (or any
capital stock of a Subsidiary of the Corporation) for any class or series of
the Corporation's capital stock or of any class or series of the Corporation's
indebtedness for any class or series of the Corporation's capital stock, (c)
the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, (d) any declaration of a dividend
in connection with any Rights Plan, or the issuance of rights, stock or other
property under any Rights Plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options
or other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock). Prior
to the termination of any such Extension Period, the Corporation may further
defer the payment of interest, provided that no Extension Period shall exceed
10 consecutive semi-annual interest payment periods, extend beyond the Stated
Maturity of the principal of this Security or end on a date other than an
Interest Payment Date. Upon the termination of any such Extension Period and
upon the payment of all accrued and unpaid interest and any Additional Interest
then due on any Interest Payment Date, the Corporation may elect to begin a new
Extension Period, subject to the above conditions. No interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest (to the extent that the
payment of such interest shall be legally enforceable) at the Interest Rate,
compounded
-2-
<PAGE> 3
semi-annually and calculated as set forth in the first paragraph of this
Security, from the dates on which amounts would otherwise have been due and
payable until paid or made available for payment. The Corporation shall give
the Holder of this Security and the Trustee notice of its election to begin any
Extension Period at least one Business Day prior to the next succeeding
Interest Payment Date on which interest on this Security would be payable but
for such deferral or so long as such Securities are held by Colonial Capital
II, a Delaware statutory business trust (the "Issuer Trust"), at least one
Business Day prior to the earlier of (i) the next succeeding date on which
Distributions on the Capital Securities of such Issuer Trust would be payable
but for such deferral, and (ii) the date on which the Property Trustee of such
Issuer Trust is required to give notice to holders of such Capital Securities
of the record date or the date such Distributions are payable.
Payment of the principal of (and premium, if any) and interest
(including any Additional Interest) on this Security will be made at the office
or agency of the Corporation maintained for that purpose in Wilmington,
Delaware, 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;
provided, however, that at the option of the Corporation payment of interest
may be made (i) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Securities Register, or (ii) by wire
transfer in immediately available funds at such place and to such account as
may be designated by the Person entitled thereto as specified in the Securities
Register.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such actions as may be necessary or appropriate to effectuate the subordination
so provided, and (c) appoints the Trustee his or her attorney-in-fact for any
and all such purposes. Each Holder hereof, by such Holder's acceptance hereof,
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, 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 Security
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 referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
-3-
<PAGE> 4
In Witness Whereof, the Corporation has caused this instrument to be
duly executed under its corporate seal.
The Colonial BancGroup, Inc.
By:
------------------------------------
Name: Robert E. Lowder
Title: Chairman, President and CEO
Attest:
- ---------------------
W. Flake Oakley
Secretary
<PAGE> 5
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: ___________, 1997
Wilmington Trust Company,
as Trustee
By:
-------------------------------
Authorized officer
<PAGE> 6
[Reverse of Security]
This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "Securities"), issued and to be issued in one or
more series under the Junior Subordinated Indenture, dated as of January 29,
1997 (herein called the "Indenture"), between the Corporation and WILMINGTON
TRUST COMPANY, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the
Corporation, the Trustee, the holders of Senior Indebtedness and the Holders of
the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $72,165,000.
All terms used in this Security that are defined in the Indenture or
in the Amended and Restated Trust Agreement, dated as of ____________, 1997 (as
modified, amended or supplemented from time to time, the "Trust Agreement"),
relating to Colonial Capital II (the "Issuer Trust"), among the Corporation, as
Depositor, the Issuer Trustees named therein and the Holders from time to time
of the Trust Securities issued pursuant thereto, shall have the meanings
assigned to them in the Indenture or the Trust Agreement, as the case may be.
The Corporation may at any time, at its option, on or after January
29, 2007, and subject to the terms and conditions of Article XI of the
Indenture, redeem this Security in whole at any time or in part from time to
time, at the following Redemption Prices (expressed as percentages of the
principal amount hereof): If redeemed during the 12- month period beginning
January 29,
<TABLE>
<CAPTION>
Year Redemption
---- Price
-----
<S> <C>
2007 104.460%
2008 104.014
2009 103.568
2010 103.122
2011 102.676
2012 102.230
</TABLE>
-6-
<PAGE> 7
<TABLE>
<S> <C>
2013 101.784
2014 101.338
2015 100.892
2016 100.446
</TABLE>
and thereafter at a Redemption Price equal to 100% of the principal amount
hereof, together, in the case of any such redemption, with accrued interest,
including any Additional Interest, to but excluding the date fixed for
redemption.
In addition, upon the occurrence and during the continuation of a Tax
Event, an Investment Company Event or a Capital Treatment Event in respect of
the Issuer Trust, the Corporation may, at its option, at any time within 90
days of the occurrence and during the continuation of such Tax Event,
Investment Company Event or Capital Treatment Event, as the case may be, redeem
this Security, in whole but not in part, subject to the terms and conditions of
Article XI of the Indenture, at a Redemption Price equal to (x) if such
redemption occurs on or after January 29, 2007, the Redemption Price set forth
above, and (y) if such redemption occurs prior to January 29, 2007, the greater
of (i) 100% of the principal amount hereof, and (ii) as determined by a
Quotation Agent (as defined below), the sum of the present values of the
principal amount and premium payable as part of the Redemption Price with
respect to an optional redemption hereof on January 29, 2007 as set forth in
the preceding paragraph, together with the present values of scheduled payments
of interest from the Redemption Date to January 29, 2007 (the "Remaining
Life"), in each case discounted to the Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of 30-day months) at the Adjusted Treasury
Rate.
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
the sum of the Treasury Rate plus (i) 2.00% if such Redemption Date occurs on
or before January 29, 1998, or (ii) 1.50% if such Redemption Date occurs after
January 29, 1998.
"Comparable Treasury Issue" means with respect to any Redemption Date
the United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the Remaining
Life, provided that if no United States Treasury security has a maturity that
is within a period from three months before to three months after January 29,
2007, the two most closely corresponding United States Treasury securities
shall be used as the Comparable Treasury Issue, and the Treasury Rate shall be
interpolated or extrapolated on a straight-line basis, rounding to the nearest
month using such securities.
-7-
<PAGE> 8
"Comparable Treasury Price" means, with respect to any Redemption
Date, (A) the arithmetic average of five Reference Treasury Dealer Quotations
for such Redemption Date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than five such
Reference Treasury Dealer Quotations, the arithmetic average of all such
Quotations.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
The "Interest Rate" shall be a rate per annum equal to 8.92%.
"Quotation Agent" means Bear, Stearns & Co. Inc. and its successors;
provided, however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in The City of New York (a "Primary Treasury
Dealer"), the Corporation shall substitute therefor another Primary Treasury
Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent, and (ii)
any other Primary Treasury Dealer selected by the Trustee after consultation
with the Corporation.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
"Treasury Rate" means (i) the yield, under the heading that represents
the average for the week immediately prior to the calculation date, appearing
in the most recently published statistical release designated "H.15(519)" or
any successor publication that is published weekly by the Federal Reserve and
that establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Remaining Life (if no maturity is within
three months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month), or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
-8-
<PAGE> 9
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for satisfaction and discharge of
the entire indebtedness of this Security upon compliance by the Corporation
with certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the Corporation and the Trustee at any time to enter into a supplemental
indenture or indentures for the purpose of modifying in any manner the rights
and obligations of the Corporation and of the Holders of the Securities, with
the consent of the Holders of not less than a majority in principal amount of
the Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Corporation 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 Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and
of any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to the Securities of this series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of this series may declare the principal amount of all
the Securities of this series to be due and payable immediately, by a notice in
writing to the Corporation (and to the Trustee if given by Holders), provided
that, if upon an Event of Default, the Trustee or such Holders fail to declare
the principal of all the Outstanding Securities of this series to be
immediately due and payable, the holders of at least 25% in aggregate
Liquidation Amount of the Capital Securities of the Issuer Trust then
Outstanding shall have the right to make such declaration by a notice in
writing to the Corporation and the Trustee; and upon any such declaration the
principal amount of and the accrued interest (including any Additional
Interest) on all the Securities of this series shall become immediately due and
payable, provided that the payment of principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article XIII of the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest (including any
-9-
<PAGE> 10
Additional Interest) on this Security 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 Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Corporation maintained under Section
10.2 of the Indenture for such purpose, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Corporation and the
Securities Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Securities
of this series, of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $100,000 and any integral multiple of
$1,000 in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Corporation 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 Security for registration of
transfer, the Corporation, the Trustee and any agent of the Corporation or the
Trustee may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Corporation, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Corporation and, by its acceptance of this Security or a
beneficial interest therein, the Holder of, and any Person that acquires a
beneficial interest in, this Security agree that for United States Federal,
state and local tax purposes it is intended that this Security constitute
indebtedness.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
-10-
<PAGE> 1
EXHIBIT 4(G)
================================================================================
GUARANTEE AGREEMENT
BETWEEN
THE COLONIAL BANCGROUP, INC.,
as Guarantor
and
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
RELATING TO
COLONIAL CAPITAL II
-------------------
Dated as of , 1997
-----------
-------------------
================================================================================
<PAGE> 2
COLONIAL CAPITAL II
Certain Sections of this guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee Agreement
- ----- --------- --- --------- ---------
<S> <C> <C>
310 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c), 2.8
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1, 2.1, 2.5, 3.2
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1, 3.2
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
316 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1, 2.1, 2.6, 5.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
317 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Guarantee Agreement.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.2. List of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.3. Reports by the Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.4. Periodic Reports to the Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.5. Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.6. Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.7. Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.8. Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2. Certain Rights of Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3. Compensation; Indemnity; Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee . . . . . . . . . . . . . . . . . 12
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.2. Waiver of Notice and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.3. Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 5.4. Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.5. Guarantee of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.6. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.7. Independent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.2. Pari Passu Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VII
TERMINATION
SECTION 7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.2. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.4. Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 8.6. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
<PAGE> 5
GUARANTEE AGREEMENT, dated as of ____________, 1997, between The
Colonial BancGroup, Inc., a Delaware corporation (the "Guarantor"), having its
principal office at One Commerce Street, Montgomery, Alabama 36104, and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Capital Securities (as defined herein) of Colonial Capital
II, a Delaware statutory business trust (the "Issuer Trust").
RECITALS OF THE CORPORATION
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of ____________, 1997, among The Colonial BancGroup, Inc., as Depositor,
Wilmington Trust Company, as Property Trustee and Delaware Trustee, the
Administrative Trustees named therein and the holders from time to time of
undivided beneficial interests in the assets of the Issuer Trust, the Issuer
Trust is issuing $70,000,000 aggregate Liquidation Amount (as defined in the
Trust Agreement) of its 8.92% Capital Securities, Series A (liquidation amount
$1,000 per capital security) (the "Capital Securities"), representing preferred
undivided beneficial interests in the assets of the Issuer Trust and having the
terms set forth in the Trust Agreement; and
WHEREAS, the Capital Securities will be issued by the Issuer Trust and
the proceeds thereof, together with the proceeds from the issuance of the
Issuer Trust's Common Securities (as defined herein), will be used to purchase
the Debentures (as defined in the Trust Agreement) of the Guarantor, which
Debentures will be deposited with Wilmington Trust Company, as Property Trustee
under the Trust Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Capital Securities
the Guarantee Payments (as defined herein) on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the purchase of Capital Securities
by each Holder, which purchase the Guarantor hereby acknowledges will benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
For all purposes of this Guarantee Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
<PAGE> 6
(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) The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;
(e) 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 Guarantee Agreement; and
(f) The words "hereby", "herein", "hereof" and "hereunder" and other
words of similar import refer to this Guarantee Agreement as a whole and not to
any particular Article, Section or other subdivision.
"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.
"Board of Directors" means the board of directors of the Guarantor or
the Executive Committee of the board of directors of the Guarantor (or any
other committee of the board of directors of the Guarantor performing similar
functions) or a committee designated by the board of directors of the Guarantor
(or such committee), comprised of two or more members of the board of directors
of the Guarantor or officers of the Guarantor, or both.
"Capital Securities" has the meaning specified in the recitals to this
Guarantee Agreement.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.
"Event of Default" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30
days.
"Guarantee Agreement" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.
<PAGE> 7
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and
unpaid Distributions (as defined in the Trust Agreement) required to be paid on
the Capital Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time; (ii) the Redemption Price (as defined in the
Trust Agreement) with respect to any Capital Securities called for redemption
by the Issuer Trust, to the extent the Issuer Trust shall have funds on hand
available therefor at such time; and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Issuer Trust, unless Debentures
are distributed to the Holders, the lesser of (a) the Liquidation Distribution
(as defined in the Trust Agreement) with respect to the Capital Securities, and
(b) the amount of assets of the Issuer Trust remaining available for
distribution to Holders on liquidation of the Issuer after satisfaction of
liabilities to creditors of the Issuer Trust as required by applicable law.
"Guarantee Trustee" means Wilmington Trust Company, solely in its
capacity as Guarantee Trustee and not in its individual capacity, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement, and thereafter
means each such Successor Guarantee Trustee.
"Guarantor" has the meaning specified in the first paragraph of this
Guarantee Agreement.
"Holder" means any Holder (as defined in the Trust Agreement) of any
Capital Securities; provided, however, that in determining whether the holders
of the requisite percentage of Capital Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor,
the Guarantee Trustee, or any Affiliate of the Guarantor or the Guarantee
Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as of
January 29, 1997, between The Colonial BancGroup, Inc. and Wilmington Trust
Company, as trustee, as the same may be modified, amended or supplemented from
time to time.
"Issuer Trust" has the meaning specified in the first paragraph of
this Guarantee Agreement.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Capital Securities" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount (as defined in the Trust
Agreement) of all Capital Securities then Outstanding (as defined in the Trust
Agreement).
"Officers' Certificate" means a certificate signed by the Chairman or
a Vice Chairman of the Board of Directors of the Guarantor or the President or
a Vice President of the Guarantor, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Guarantor, and
delivered to the Guarantee Trustee. Any Officers'
<PAGE> 8
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement by each officer signing the Officers'
Certificate that such officer 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 such officer in rendering
the Officers' Certificate;
(c) a statement that 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 such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, company,
limited liability company, trust, business trust, unincorporated association,
or government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any Senior Vice President, any Vice President, any Assistant Vice President,
the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer,
any Trust Officer or Assistant Trust Officer or any other officer of the
Corporate Trust Department of the Guarantee Trustee and also means, with
respect to a particular matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Agreement" means the Amended and Restated Trust Agreement of
the Issuer Trust referred to in the recitals to this Guarantee Agreement, as
modified, amended or supplemented from time to time.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this Guarantee Agreement was executed; provided,
however, that if 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.
<PAGE> 9
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
The Trust Indenture Act shall apply as a matter of contract to this
Guarantee Agreement for purposes of interpretation, construction and defining
the rights and obligations hereunder, and this Guarantee Agreement, the
Guarantor and the Guarantee Trustee shall be deemed for all purposes hereof to
be subject to and governed by the Trust Indenture Act. 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 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before June 30 and December 31 of
each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders (a "List of Holders") as of
a date not more than 15 days prior to the delivery thereof, and (b) at such
other times as the Guarantee 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, in each
case to the extent such information is in the possession or control of the
Guarantor and has not otherwise been received by the Guarantee Trustee in its
capacity as such. The Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with the requirements of
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than January 31 of each year, commencing January 31, 1998,
the Guarantee Trustee shall provide to the Holders such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form and in the
manner provided by Section 313 of the Trust Indenture Act. If this Guarantee
Agreement shall have been qualified under the Trust Indenture Act, the
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee and the Holders
such documents, reports and information, if any, as required by Section 314 of
the Trust Indenture Act and the compliance certificate required by Section 314
of the Trust Indenture Act, in the form, in the manner and at the times
required by Section 314 of the Trust
<PAGE> 10
Indenture Act, provided that such documents, reports and information shall not
be required to be provided to the Securities and Exchange Commission unless
this Guarantee Agreement shall have been qualified under the Trust Indenture
Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such 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 of the Guarantor pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of at least a Majority in Liquidation Amount of the
Capital Securities may, by vote, on behalf of the Holders of all the Capital
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist,
and any default or 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 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notice of any such Event of Default known to the Guarantee Trustee,
unless such Event of Default has been cured before the giving of such notice,
provided that, except in the case of a default in the payment of a Guarantee
Payment, the Guarantee 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 Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests
of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained actual knowledge, of such Event of
Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement and the Indenture 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.
<PAGE> 11
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except to a Successor Guarantee Trustee
on acceptance by such Successor Guarantee Trustee of its appointment to act as
Guarantee Trustee hereunder. The right, title and interest of the Guarantee
Trustee, as such, hereunder shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, 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 Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing 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 (including pursuant to Section 2.1), and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee. If an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Guarantee 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 Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own wilful 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 Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement (including pursuant to Section
2.1), and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement (including
pursuant to Section 2.1); and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates
<PAGE> 12
or opinions furnished to the Guarantee 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 or of the Trust Indenture Act are
specifically required to be furnished to the Guarantee
Trustee, the Guarantee 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 Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which
such judgment was made.
(iii) The Guarantee 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 not less than a
Majority in Liquidation Amount of the Capital Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee, under this Guarantee Agreement.
(iv) Subject to Section 3.1(b), no provision of this Guarantee
Agreement shall require the Guarantee 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 Guarantee 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 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may 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 reasonably 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 unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee
<PAGE> 13
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 from the
Guarantee Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and
the written advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion.
Such legal counsel may be legal counsel to the Guarantor or any of its
Affiliates and may be one of its or their employees. The Guarantee
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 Guarantee 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 Guarantee Trustee such adequate security
and indemnity as would satisfy a reasonable person in the position of
the Guarantee 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 Guarantee Trustee;
provided that nothing contained in this Section 3.2(a)(v) shall be
taken to relieve the Guarantee 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 Guarantee 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 Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee 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, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
such agent or attorney appointed by it with due care hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (B) may refrain from enforcing such
remedy or right or taking such other action until such instructions
are received, and (C) shall be protected in acting in accordance with
such instructions.
<PAGE> 14
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee 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 Guarantee 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 Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Compensation; Indemnity; Fees.
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such
reasonable compensation for all services rendered by it hereunder as
may be agreed by the Guarantor and the Guarantee Trustee from time to
time (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 Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the Guarantee
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 Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence, wilful misconduct or bad faith on the part of the
Guarantee Trustee, 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 Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
<PAGE> 15
(ii) be a Person that is a national or state chartered bank
and eligible pursuant to the Trust Indenture Act to act as such, and
that has at the time of such appointment securities rated in one of
the three highest rating categories by a nationally recognized
statistical rating organization and a combined capital and surplus of
at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such
corporation 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 4.1 and to the
extent permitted by the Trust Indenture Act, 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 Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2.
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(c), the Guarantee Trustee may be appointed
or removed at any time by the Guarantor.
(b) Subject to Section 4.2(c), the Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by giving written
notice thereof to the Holders and the Guarantor and by appointing a successor
Guarantee Trustee.
(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed and shall have accepted
such appointment. No removal or resignation of a Guarantee Trustee shall be
effective until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor and, in the case of any
resignation, the resigning Guarantee Trustee.
(d) If the Guarantee Trustee shall resign, be removed or become
incapable of acting as Guarantee Trustee and a replacement shall not be
appointed prior to such resignation or removal, or if a vacancy shall occur in
the office of Guarantee Trustee for any reason, and no Successor Guarantee
Trustee shall have been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery to the Holders and the Guarantor of a
notice of resignation, the resigning Guarantee Trustee may petition, at the
expense of the Guarantor, any court of competent jurisdiction for appointment
of a Successor Guarantee Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Guarantee
Trustee.
<PAGE> 16
ARTICLE V
GUARANTEE
SECTION 5.1. 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 Issuer Trust), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer Trust may have or
assert, except the defense of payment. 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 Issuer Trust to pay such amounts
to the Holders.
SECTION 5.2. 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
Guarantee Trustee, the Issuer 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 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
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
(other than by Act (as defined in the Trust Agreement) of the
Holders), of the performance or observance by the Issuer Trust of any
express or implied agreement, covenant, term or condition relating to
the Capital Securities to be performed or observed by the Issuer
Trust;
(b) the extension of time for the payment by the Issuer Trust
of all or any portion of the Distributions (other than an extension of
time for payment of Distributions that results from the extension of
any interest payment period on the Debentures as provided in the
Indenture), Redemption Price, Liquidation Distribution or any other
sums payable under the terms of the Capital Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Capital Securities;
(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
<PAGE> 17
Holders pursuant to the terms of the Capital Securities, or any action
on the part of the Issuer Trust granting indulgence or extension of
any kind;
(d) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of
debt of, or other similar proceedings affecting, the Issuer Trust or
any of the assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor
(other than payment of the underlying obligation), it being the intent
of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce
this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a
Majority in Liquidation Amount of the Capital Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; 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 the Guarantee
Trustee, the Issuer Trust or any other Person.
SECTION 5.5. 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 of amounts theretofore
paid by the Issuer Trust) or upon the distribution of Debentures to Holders as
provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of the
Holders against the Issuer Trust in respect of any amounts paid to the Holders
by the Guarantor under this
<PAGE> 18
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 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 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Guarantor to the extent and in the manner set forth in the
Indenture with respect to the Debentures, and the provisions of Article XIII of
the Indenture will apply, mutatis mutandis, to the obligations of the Guarantor
hereunder. The obligations of the Guarantor hereunder do not constitute Senior
Indebtedness (as defined in the Indenture) of the Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under (i) any similar
guarantee agreements issued by the Guarantor on behalf of the holders of
preferred or capital securities issued by any Issuer Trust (as defined in the
Indenture); (ii) the Indenture and the Securities (as defined therein) issued
thereunder; (iii) the Expense Agreement (as defined in the Trust Agreement) and
any similar expense agreements entered into by the Guarantor in connection with
the offering of Capital Securities (as defined in the Indenture) by any Issuer
Trust (as defined in the Indenture); and (iv) any other security, guarantee or
other agreement or obligation that is expressly stated to rank pari passu with
the obligations of the Guarantor under this Guarantee Agreement or with any
obligation that ranks pari passu with the obligations of the Guarantor under
this Guarantee Agreement.
<PAGE> 19
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price (as defined in the
Trust Agreement) of all Capital Securities, (ii) the distribution of Debentures
to the Holders in exchange for all of the Capital Securities, or (iii) full
payment of the amounts payable in accordance with Article IX of the Trust
Agreement upon liquidation of the Issuer 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 is required to repay any sums
paid with respect to Capital Securities or this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder, and any purported assignment other than in
accordance with this provision shall be void.
SECTION 8.2. Amendments.
Except with respect to any changes that do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Holders of not less than a Majority in Liquidation
Amount of the Capital Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.
SECTION 8.3. Notices.
(a) 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:
<PAGE> 20
(i) if given to the Guarantor, to the address or telecopy number set
forth below or such other address or telecopy number as the Guarantor may give
notice to the Guarantee Trustee and the Holders:
The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Attention: W. Flake Oakley
Telecopy: 334-240-6019
(ii) if given to the Guarantee Trustee, at the address or telecopy
number set forth below or such other address or telecopy number as the
Guarantee Trustee may give notice to the Guarantor and the Holders:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: 302-651-8882
(iii) if given to any Holder, in the manner set forth in Section 10.8
of the Trust Agreement.
(b) 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, provided that any notice
given as provided in Section 8.3(a)(iii) shall be deemed to have been given at
the time specified in Section 10.8 of the Trust Agreement.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.
SECTION 8.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE> 21
SECTION 8.6. Counterparts.
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> 22
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee
Agreement to be duly executed, and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
<TABLE>
<S> <C>
THE COLONIAL BANCGROUP, INC.
[SEAL]
By:
----------------------------------
Name: W. Flake Oakley
Title: Executive Vice President
and Chief Financial Officer
[SEAL]
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
By:
----------------------------------
Name:
Title:
</TABLE>
<PAGE> 23
STATE OF )
) ss.:
COUNTY OF )
On the .... day of January, 1997, before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that s/he is ............................ of The Colonial
BancGroup, Inc., one of the corporations described in and which executed the
foregoing instrument; that s/he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation; and that s/he
signed her/his name thereto by like authority.
...............................................
STATE OF )
) ss.:
COUNTY OF )
On the .... day of January, 1997, before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that s/he is ............................ of Wilmington Trust
Company, one of the corporations described in and which executed the foregoing
instrument; that s/he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation; and that s/he signed her/his
name thereto by like authority.
........................................
<PAGE> 1
EXHIBIT 4(H)
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT AS TO EXPENSES AND LIABILITIES, dated as of _________, 1997
(as modified, amended or supplemented, this "Agreement" ) between The Colonial
BancGroup, Inc., a Delaware corporation (the "Corporation"), and Colonial
Capital II, a Delaware business trust (the "Issuer Trust").
WHEREAS, the Issuer Trust intends to issue its Common Securities (the
"Common Securities") to and acquire the Debentures from the Corporation, and to
issue and sell 8.92% Capital Securities, Series A (the "Capital Securities")
with such powers, preferences and special rights and restrictions as are set
forth in the Amended and Restated Trust Agreement of the Issuer Trust, dated as
of ____________, 1997, among the Corporation, as Depositor, Wilmington Trust
Company, as Delaware trustee and as Property Trustee, and the Administrative
Trustees named therein, as the same may be amended from time to time (the
"Trust Agreement"); and
WHEREAS, the Corporation will own all of the Common Securities of the
Issuer Trust and will issue the Debentures; and
WHEREAS, capitalized terms used but not defined herein have the
meanings set forth in the Trust Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Corporation and the Issuer
Trust hereby agree as follows:
ARTICLE I
SECTION 1.1. Guarantee by Corporation. Subject to the terms and
conditions hereof, the Corporation hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Issuer Trust is now or
hereafter becomes indebted or liable (the "Beneficiaries") the full payment,
when and as sue, of any and all Obligations (as hereinafter defined) to such
Beneficiaries. As used herein, "Obligations" means any costs, expenses or
liabilities of the Issuer Trust, other than obligations of the Issuer Trust to
pay to holders of any Trust Securities the amounts due such holders pursuant to
the terms of the Trust Securities. 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 1.2. Subordination of Guarantee. The guarantee and other
liabilities and obligations of the Corporation under this Agreement shall
constitute unsecured obligations of the Corporation and shall rank subordinate
and junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Corporation to the extent and in the manner set forth in the
Indenture with respect to Debentures, and the provisions of Article
<PAGE> 2
XIII of the Indenture will apply, mutatis mutandis, to the obligations of the
Corporation hereunder. The obligations of the Corporation hereunder do not
constitute Senior Indebtedness (as defined in the Indenture) of the
Corporation.
SECTION 1.3. Terms of Agreement. This Agreement shall terminate and
be of no further force and effect upon the dissolution of the Issuer Trust;
provided, however, that this Agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any holder of Capital
Securities or any Beneficiary must restore payment of any sums paid under the
Capital Securities, under any Obligation, under the Guarantee Agreement dated
the date hereof by The Colonial BancGroup, Inc., as guarantor, and Wilmington
Trust Company, as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
SECTION 1.4. Waiver of Notice. The Corporation hereby waives notice of
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and the Corporation hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 1.5. No Impairment. The obligations, covenants, agreements
and duties of the Corporation 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 Issuer 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 Issuer 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 Issuer Trust or any of the
assets of the Issuer Trust (other than the dissolution of the
Issuer Trust in accordance with the terms thereof).
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation with respect to the happenings of any of the
foregoing.
SECTION 1.6. Enforcement. A Beneficiary may enforce this Agreement
directly against the Corporation and the Corporation waives any right or remedy
to require that any action be brought against the Issuer Trust or any other
person or entity before proceeding against the Corporation.
<PAGE> 3
SECTION 1.7. Subrogation. The Corporation shall be subrogated to all
rights (if any) of any Beneficiary against the Issuer Trust in respect of any
amounts paid to the Beneficiaries by the Corporation under this Agreement;
provided, however, that the Corporation shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
rights that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Agreement, if, at the time of any such payment, any amounts are due and
unpaid under this Agreement.
ARTICLE II
SECTION 2.1. Assignment. This Agreement may not be assigned by either
party hereto without the consent of the other, and any purported assignment
without such consent shall be void.
SECTION 2.2. Binding Effect. All guarantees and agreements contained
in this Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the
Beneficiaries.
SECTION 2.3. Amendment. So long as there remains any Beneficiary or
any Capital Securities are outstanding, this Agreement shall not be modified or
amended in any manner adverse to such Beneficiary or to the Holders of the
Capital Securities without the consent of such Beneficiary or the Holders of
the Capital Securities, as the case may be.
SECTION 2.4. 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):
Colonial Capital II
c/o The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Facsimile No: (334) 240-6019
Attention: W. Flake Oakley
<PAGE> 4
With a copy to:
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Facsimile No: (302) 651-8882
Attention: Corporate Trust Administration
The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Facsimile No: (334) 240-6019
Attention: W. Flake Oakley
SECTION 2.4. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE> 5
In Witness Whereof, this Agreement as to Expenses and Liabilities is
executed as of the day and year first above written,
The Colonial BancGroup, Inc.
By:
--------------------------------
Name: W. Flake Oakley
Title: Executive Vice President and
Chief Financial Officer
Colonial Capital II
By:
--------------------------------
Name: Young J. Boozer, III
Administrative Trustee
<PAGE> 1
EXHIBIT 4(I)
================================================================================
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
AMONG
THE COLONIAL BANCGROUP, INC.,
COLONIAL CAPITAL I,
AND
BEAR, STEARNS & CO. INC.,
KEEFE, BRUYETTE & WOODS, INC.,
as the Initial Purchasers
------------------
Dated as of January 29, 1997
------------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Registration Under the Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. Registration Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Registration Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(a) Indemnification by the Company and the Issuer Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(b) Indemnification by the Holders and any Agents and Underwriters . . . . . . . . . . . . . . . . . . . . . 23
(c) Notices of Claims, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(d) Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7. Underwritten Offerings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a) Selection of Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(b) Participation by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8. Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(b) Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(c) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(d) Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(e) Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(f) LAW GOVERNING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(g) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(h) Entire Agreement; Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(i) Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(j) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
<PAGE> 3
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as of January 29,
1997, by and among The Colonial BancGroup, Inc., a Delaware corporation (the
"Company"), Colonial Capital I, a Delaware statutory business trust (the
"Issuer Trust"), Bear, Stearns & Co. Inc. and Keefe, Bruyette & Woods, Inc., as
the initial purchasers (the "Initial Purchasers") of the 8.92% Capital
Securities, Series A of the Issuer Trust, which are guaranteed by the Company.
1. Certain Definitions.
For all purposes of this Agreement, the following terms shall have the
following respective meanings:
"Agreement" shall mean this Exchange and Registration Rights
Agreement, as modified, amended or supplemented from time to time.
"Applicable Guarantee Agreement" shall mean the Guarantee
Agreement, when used with respect to the Securities or the Issuer
Trust, or the Exchange Guarantee Agreement, when used with respect to
the Exchange Securities or the Exchange Issuer Trust.
"Applicable Indenture" shall mean the Indenture, when used
with respect to the Junior Subordinated Debentures, the Securities or
the Issuer Trust, or the Exchange Indenture, when used with respect to
the Exchange Junior Subordinated Debentures, the Exchange Securities
or the Exchange Issuer Trust.
"Applicable Trust Agreement" shall mean the Trust Agreement,
when used with respect to the Securities or the Issuer Trust, or the
Exchange Trust Agreement, when used with respect to the Exchange
Securities or the Exchange Issuer Trust.
The term "broker-dealer" shall mean any broker or dealer
registered with the Commission under the Exchange Act.
"Closing Date" shall mean the date on which the Securities are
initially issued.
"Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the
Exchange Act or the Securities Act, whichever is the relevant statute
for the particular purpose.
-1-
<PAGE> 4
"Common Securities" shall mean the common securities of the
Issuer Trust issued pursuant to the Trust Agreement.
"Company" shall have the meaning assigned thereto in the
preamble.
"Distributions", with respect to the Securities or Exchange
Securities, shall have the meaning specified in the Applicable Trust
Agreement.
"Effective Time", in the case of (i) an Exchange Registration,
shall mean the time and date as of which the Commission declares the
Exchange Registration Statement effective or as of which the Exchange
Registration Statement otherwise becomes effective and (ii) a Shelf
Registration, shall mean the time and date as of which the Commission
declares the Shelf Registration Statement effective or as of which the
Shelf Registration Statement otherwise becomes effective.
"Electing Holder" shall mean any holder of Registrable
Securities that has returned a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(d)(ii) or
3(d)(iii).
"Exchange Act" shall mean the Securities Exchange Act of 1934,
or any successor thereto, and the rules, regulations and forms
promulgated thereunder, all as the same shall be amended from time to
time.
"Exchange Guarantee Agreement" shall have the meaning assigned
thereto in Section 2(a).
"Exchange Indenture" shall have the meaning assigned thereto
in Section 2(a).
"Exchange Issuer Trust" shall have the meaning assigned
thereto in Section 2(a).
"Exchange Junior Subordinated Debentures" shall have the
meaning assigned thereto in Section 2(a).
"Exchange Offer" shall have the meaning assigned thereto in
Section 2(a).
"Exchange Registration" shall have the meaning assigned
thereto in Section 3(c).
-2-
<PAGE> 5
"Exchange Registration Statement" shall have the meaning
assigned thereto in Section 2(a).
"Exchange Securities" shall have the meaning assigned thereto
in Section 2(a).
"Exchange Trust Agreement" shall have the meaning assigned
thereto in Section 2(a).
"Guarantee Agreement" shall mean the Guarantee Agreement,
dated as of January 29, 1997, between the Company, as Guarantor, and
Wilmington Trust Company, as Guarantee Trustee, relating to the
Securities.
The term "holder" shall mean each of the Initial Purchasers
and other persons who acquire Registrable Securities from time to time
(including any successors or assigns), in each case for so long as
such person owns any Registrable Securities.
"Indenture" shall mean the Junior Subordinated Indenture,
dated as of January 29, 1997, between the Company and Wilmington Trust
Company, as Trustee, as the same shall be amended from time to time.
"Initial Purchasers" shall have the meaning assigned thereto
in the preamble.
"Issuer Trust" shall have the meaning assigned thereto in the
preamble.
"Junior Subordinated Debentures" shall mean the 8.92% Junior
Subordinated Deferrable Interest Debentures of the Company to be
issued to the Issuer Trust under the Indenture.
"Notice and Questionnaire" means a Notice of Registration
Statement and Selling Securityholder Questionnaire substantially in
the form of Exhibit A hereto.
The term "person" shall mean a corporation, association,
partnership, organization, business, individual, government or
political subdivision thereof or governmental agency.
"Property Trustee", with respect to the Issuer Trust or the
Exchange Issuer Trust, shall mean the Property Trustee named under the
Applicable Trust Agreement.
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<PAGE> 6
"Purchase Agreement" shall mean the Purchase Agreement, dated
January 24, 1997, among the Company, the Issuer Trust and the Initial
Purchasers.
"Registrable Securities" shall mean (i) in the circumstances
contemplated by Section 2(a) the Exchange Securities until the
Exchange Offer is completed as contemplated in Section 2(a), except
that any such Exchange Securities that, pursuant to the last two
sentences of Section 2(a), are included in a prospectus for use in
connection with resales by broker-dealers shall continue to be
Registrable Securities with respect to Sections 5, 6 and 9 until
resale of such Exchange Securities has been effected within the Resale
Period; (ii) in the circumstances contemplated by Section 2(b), the
Securities until such time as a registration statement registering
such Securities under the Securities Act has been declared or becomes
effective and such Securities have been sold or otherwise transferred
by the holder thereof pursuant to such effective registration
statement; provided a Registrable Security, whether under (i) or (ii)
above, shall cease to be a Registrable Security when (a) such
Registrable Security is sold pursuant to Rule 144 (or any successor
provision) promulgated under the Securities Act under circumstances in
which any legend borne by such Registrable Security relating to
restrictions on transferability thereof, under the Securities Act or
otherwise, is removed by the Company or pursuant to the Applicable
Indenture or such Registrable Securities are eligible to be sold
pursuant to paragraph (k) of Rule 144 or (b) such Registrable Security
shall cease to be outstanding.
"Registration Default" shall have the meaning assigned thereto
in Section 2(c).
"Registration Expenses" shall have the meaning assigned
thereto in Section 4.
"Resale Period" shall have the meaning assigned thereto in
Section 2(a).
"Restricted Holder" shall mean (i) a holder who is an
affiliate of the Company within the meaning of Rule 405, (ii) a holder
that acquires Exchange Securities outside the ordinary course of such
holder's business, (iii) a holder who has arrangements or
understandings with any person to participate in the Exchange Offer
for the purpose of distributing Exchange Securities and (iv) a holder
that is a broker-dealer, but only with respect to Exchange Securities
received by such broker-dealer pursuant to the Exchange
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<PAGE> 7
Offer in exchange for Securities acquired by the broker-dealer
directly from the Issuer Trust.
"Rule 144," "Rule 405" and "Rule 415" shall mean, in each
case, such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.
"Securities" shall mean the 8.92% Capital Securities, Series A
(Liquidation Amount $1,000 per Security), to be issued under the Trust
Agreement and sold to the Initial Purchasers.
"Securities Act" shall mean the Securities Act of 1933, or any
successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.
"Shelf Registration" shall have the meaning assigned thereto
in Section 2(b).
"Shelf Registration Statement" shall have the meaning assigned
thereto in Section 2(b).
"Special Distributions" shall have the meaning assigned
thereto in Section 2(c).
"Special Interest" shall have the meaning assigned thereto in
Section 2(c).
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement, dated as of January 29, 1997, among the Company, as
Depositor, Wilmington Trust Company, as Property Trustee, Wilmington
Trust Company, as Delaware Trustee, the Administrative Trustees named
therein, and the holders of the Trust Securities from time to time.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, or any successor thereto, and the rules, regulations and forms
promulgated thereunder, all as the same shall be amended from time to
time.
"Trust Securities" shall mean, collectively, the Securities
and the Common Securities.
Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of
this Agreement, and the
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<PAGE> 8
words "herein," "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Section or other
subdivision.
2. Registration Under the Securities Act.
(a) Except as set forth in Section 2(b) below, the Company agrees to
file under the Securities Act, as soon as practicable, but no later than 60
days after the Closing Date, a registration statement (the "Exchange
Registration Statement") relating to an offer to exchange (the "Exchange
Offer") any and all of the Securities for a like aggregate liquidation amount
of capital securities (the "Exchange Securities") issued by an issuer trust
substantially identical to the Issuer Trust (the "Exchange Issuer Trust"),
which Exchange Securities shall be (i) substantially identical to the
Securities, except that such Exchange Securities shall have been registered
pursuant to an effective registration statement under the Securities Act and
shall not contain terms with respect to Special Distributions or transfer
restrictions, (ii) shall be issued pursuant to a trust agreement (the "Exchange
Trust Agreement") that (except with respect to the foregoing matters) is
substantially identical to the Trust Agreement and shall be qualified under the
Trust Indenture Act, and (iii) shall be entitled to a guarantee (the "Exchange
Guarantee Agreement") of the Company substantially identical to the Guarantee
Agreement, which Exchange Guarantee Agreement shall be qualified under the
Trust Indenture Act. The Company shall issue to the Exchange Issuer Trust, and
the Exchange Issuer Trust shall hold, junior subordinated debentures of the
Company (the "Exchange Junior Subordinated Debentures") that are substantially
identical to the Junior Subordinated Debentures, and are entitled to the
benefits of an indenture (the "Exchange Indenture") that is either the
Indenture or is substantially identical to the Indenture and that has been
qualified under the Trust Indenture Act. The Company agrees to use its best
efforts to cause the Exchange Registration Statement to become effective under
the Securities Act as soon as practicable, but no later than 180 days after the
Closing Date. The Exchange Offer shall be registered under the Securities Act
on the appropriate form and shall comply with all applicable tender offer rules
and regulations under the Exchange Act. The Company further agrees to use its
best efforts to commence and complete the Exchange Offer promptly, but no later
than 35 days after such registration statement has become effective, hold the
Exchange Offer open for at least 30 days and cause to be issued Exchange
Securities for all Securities that have been validly tendered and not withdrawn
on or prior to the expiration of the Exchange Offer. The Exchange Offer will be
deemed to have been "completed" only if the Exchange Securities received by
holders other than Restricted Holders in the Exchange Offer for Securities are,
upon receipt, transferable by each such holder without need for further
compliance with Section 5 of the Securities Act and the Exchange Act (except
for the requirement to deliver a prospectus included in the Exchange
Registration Statement applicable to resales by broker-dealers of Exchange
Securities received by such broker-dealer pursuant to
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<PAGE> 9
the Exchange Offer in exchange for Securities other than those acquired by the
broker-dealer directly from the Issuer Trust), and without material
restrictions under the Blue Sky or securities laws of a substantial majority of
the States of the United States of America. The Exchange Offer shall be deemed
to have been completed upon the earlier to occur of (i) the Company's having
exchanged (or caused the exchange of) the Exchange Securities for all
outstanding Securities pursuant to the Exchange Offer and (ii) the Company's
having exchanged (or caused the exchange of), pursuant to the Exchange Offer,
Exchange Securities for all Securities that have been validly tendered and not
withdrawn before the expiration of the Exchange Offer, which shall be on a date
that is at least 30 days following the commencement of the Exchange Offer. The
Company agrees (x) to include in the Exchange Registration Statement a
prospectus for use in connection with any resales by a broker-dealer of
Exchange Securities received by such broker-dealer in the Exchange Offer in
exchange for Securities not acquired by such broker-dealer directly from the
Issuer Trust, and (y) to keep the Exchange Registration Statement effective for
a period (the "Resale Period") beginning when Exchange Securities are first
issued in the Exchange Offer and ending upon the earlier of the expiration of
the 90th day after the Exchange Offer has been completed or such time as such
broker-dealers no longer own any such Exchange Securities. With respect to such
Exchange Registration Statement, each broker-dealer that holds Exchange
Securities received by such broker-dealer in the Exchange Offer in exchange for
Securities not acquired by it directly from the Issuer Trust shall have the
benefit of the rights of indemnification and contribution set forth in Sections
6(a), (c), (d) and (e) hereof.
(b) If prior to the time the Exchange Offer is completed either (A)
existing Commission interpretations are changed such that the Exchange
Securities received by holders other than Restricted Holders in the Exchange
Offer for Securities are not or would not be, upon receipt, transferable by
each such holder without need for further compliance with Section 5 of the
Securities Act (except for the requirement to deliver a prospectus included in
the Exchange Registration Statement applicable to resales by broker-dealers of
Exchange Securities received by such broker-dealer in the Exchange Offer in
exchange for Securities not acquired by such broker-dealer directly from the
Issuer Trust), or (B) the Company or the Issuer Trust has received an opinion
of counsel experienced in such matters to the effect that, as a result of the
consummation of the Exchange Offer, there is more than an insubstantial risk
that (a) the Exchange Issuer Trust would be subject to United States federal
income tax with respect to income received or accrued on the Exchange Junior
Subordinated Debentures, (b) interest payable by the Company on the Exchange
Junior Subordinated Debentures would not be deductible by the Company, in whole
or in part, for United States federal income tax purposes, or (c) the Exchange
Issuer Trust would be subject to more than a de minimis amount of other taxes,
duties or other governmental charges, then in lieu of the Company's conducting
the Exchange Offer contemplated by Section 2(a), the Company and the Issuer
Trust shall use their best
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<PAGE> 10
efforts to cause to be filed under the Securities Act as soon as practicable,
but no later than the later of 30 days after the time such obligation to file
arises and 60 days after the Closing Date, a "shelf" registration statement
providing for the registration of, and the sale on a continuous or delayed
basis by the holders of, all of the Registrable Securities, pursuant to Rule
415 or any similar rule that may be adopted by the Commission (such filing, the
"Shelf Registration" and such registration statement, the "Shelf Registration
Statement"). The Company and the Issuer Trust agree to use their best efforts
to cause the Shelf Registration Statement to become or be declared effective no
later than 120 days after the date such Shelf Registration Statement is filed
and to keep such Shelf Registration continuously effective in order to permit
the prospectus forming a part thereof to be usable by holders for resales of
Registrable Securities for a period ending on the earlier of the third
anniversary of the date such Shelf Registration Statement is filed or such time
as there are no longer any Registrable Securities outstanding, provided,
however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the prospectus
forming a part thereof for resales of Registrable Securities unless such holder
is an Electing Holder, and (ii) after the Effective Time of the Shelf
Registration Statement, promptly upon the request of any holder of Registrable
Securities that is not then an Electing Holder, to take any action reasonably
necessary to enable such holder to use the prospectus forming a part thereof
for resales of Registrable Securities, including, without limitation, any
action necessary to identify such holder as a selling securityholder in the
Shelf Registration Statement, provided, however, that nothing in this Clause
(ii) shall relieve any such holder of the obligation to return a completed and
signed Notice and Questionnaire to the Company in accordance with Section
3(d)(iii) hereof. The Company and the Issuer Trust further agree to supplement
or make amendments to the Shelf Registration Statement, as and when required by
the rules, regulations or instructions applicable to the registration form used
by the Company and the Issuer Trust for such Shelf Registration Statement or by
the Securities Act or rules and regulations thereunder relating to shelf
registration, and the Company and the Issuer Trust agree to furnish to each
Electing Holder copies of any such supplement or amendment prior to its being
used or promptly following its filing with the Commission.
(c) If (i) the Exchange Registration Statement or Shelf Registration
Statement has not been filed on or before the date on which such registration
statement is required to be filed pursuant to Section 2(a) or 2(b),
respectively, or (ii) such Exchange Registration Statement or Shelf
Registration Statement has not become effective or been declared effective by
the Commission on or before the date on which such registration statement is
required to become or be declared effective pursuant to Section 2(a) or 2(b),
respectively, or (iii) the Exchange Offer has not been completed within 35 days
after the initial effective date of the Exchange Registration Statement (if the
Exchange Offer is then required to be made), or (iv) any Exchange Registration
Statement or Shelf Registration Statement required
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<PAGE> 11
by Section 2(a) or 2(b) is filed and declared effective but shall thereafter
either be withdrawn by the Company or shall become subject to an effective stop
order issued pursuant to Section 8(d) of the Securities Act suspending the
effectiveness of such registration statement (except as specifically permitted
herein) without being succeeded immediately by an additional registration
statement filed and declared effective (each such event referred to in clauses
(i) through (iv), a "Registration Default"), then, as liquidated damages for
such Registration Default, subject to the provisions of Section 9(b),
additional interest (the "Special Interest") shall accrue in respect of the
Junior Subordinated Debentures, as provided therein, and additional
distributions (the "Special Distributions") shall accumulate in respect of the
Trust Securities, as provided in the Trust Agreement, in each case at a per
annum rate of 0.25% applicable to the principal amount of the Junior
Subordinated Debentures or the liquidation amount of the Trust Securities, as
the case may be, for the period from and including the date on which such
Registration Default occurs to but excluding the date on which such
Registration Default ceases to exist. Such Special Interest and Special
Distributions shall be calculated on the basis of a 365-day or 366-day year, as
the case may be, and the number of days elapsed during the relavent period and
shall be payable semi-annually in arrears on each Interest Payment Date (as
defined in the Indenture) or Distribution Date (as defined in the Trust
Agreement), as the case may be, together with (and in the same manner as) the
interest and Distributions otherwise payable in respect of the Junior
Subordinated Debentures or the Trust Securities, as the case may be. If the
Company elects to commence an Extension Period at any time when such Special
Interest and Special Distributions are payable, such Special Interest and
Special Distributions shall be deferred as and to the extent that the interest
and Distributions otherwise payable in respect of the Junior Subordinated
Debentures and Trust Securities are deferred.
(d) The Company shall take, and shall cause the Issuer Trust or
Exchange Issuer Trust, as the case may be, to take, all reasonable actions
necessary or advisable to be taken by it to ensure that the transactions
contemplated herein are effected as so contemplated, including all reasonable
actions necessary or desirable to register the Guarantee Agreement, the
Exchange Guarantee Agreement, the Junior Subordinated Debentures and the
Exchange Junior Subordinated Debentures, as may be required under the
Securities Act, under the registration statement contemplated in Section 2(a)
or 2(b) hereof, as applicable.
(e) Any reference herein to a registration statement as of any time
shall be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time and any reference herein to
any post- effective amendment to a registration statement as of any time shall
be deemed to include any document incorporated, or deemed to be incorporated,
therein by reference as of such time.
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<PAGE> 12
3. Registration Procedures.
If the Company files or causes to be filed a registration statement
pursuant to Section 2(a) or Section 2(b), the following provisions shall apply:
(a) At or before the Effective Time of the Exchange Offer or the
Shelf Registration, as the case may be, the Company and the Issuer Trust shall
qualify the Applicable Indenture, the Applicable Trust Agreement and the
Applicable Guarantee Agreement under the Trust Indenture Act of 1939.
(b) In the event that such qualification would require the
appointment of a new trustee under the Applicable Indenture, the Company and
the Issuer Trust shall appoint a new trustee thereunder pursuant to the
applicable provisions of the Applicable Indenture.
(c) In connection with the Company's obligations with respect to the
registration of Exchange Securities as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, the Company shall, as soon as
practicable (or as otherwise specified):
(i) prepare and file, or cause to be prepared and filed, with
the Commission, as soon as practicable but no later than 60 days after
the Closing Date, an Exchange Registration Statement on any form which
may be utilized by the Company and the Exchange Issuer Trust and which
shall permit the Exchange Offer and resales of Exchange Securities by
broker-dealers during the Resale Period to be effected as contemplated
by Section 2(a), and use its best efforts to cause such Exchange
Registration Statement to become effective as soon as practicable
thereafter, but no later than 180 days after the Closing Date;
(ii) as soon as practicable prepare and file with the
Commission such amendments and supplements to such Exchange
Registration Statement and the prospectus included therein as may be
necessary to effect and maintain the effectiveness of such Exchange
Registration Statement for the periods and purposes contemplated in
Section 2(a) hereof and as may be required by the applicable rules and
regulations of the Commission and the instructions applicable to the
form of such Exchange Registration Statement, and promptly provide
each broker- dealer holding Exchange Securities with such number of
copies of the prospectus included therein (as then amended or
supplemented), in conformity in all material respects with the
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder, as such
broker-dealer reasonably
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<PAGE> 13
may request prior to the expiration of the Resale Period, for use in
connection with resales of Exchange Securities;
(iii) promptly notify each broker-dealer that has requested or
received copies of the prospectus included in such registration
statement, and confirm such advice in writing, (A) when such Exchange
Registration Statement or the prospectus included therein or any
prospectus amendment or supplement or post-effective amendment has
been filed, and, with respect to such Exchange Registration Statement
or any post-effective amendment, when the same has become effective,
(B) of any comments by the Commission and by the blue sky or
securities commissioner or regulator of any state with respect thereto
or any request by the Commission for amendments or supplements to such
Exchange Registration Statement or prospectus or for additional
information, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of such Exchange Registration Statement
or the initiation or threatening of any proceedings for that purpose,
(D) if at any time the representations and warranties of the Company
contemplated by Section 5 cease to be true and correct in all material
respects, (E) of the receipt by the Company or the Exchange Issuer
Trust of any notification with respect to the suspension of the
qualification of the Exchange Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose,
or (F) at any time during the Resale Period when a prospectus is
required to be delivered under the Securities Act, that such Exchange
Registration Statement, prospectus, prospectus amendment or supplement
or post-effective amendment does not conform in all material respects
to the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder or contains an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances then existing;
(iv) in the event that the Company or the Exchange Issuer
Trust would be required, pursuant to Section 3(e)(iii)(F) above, to
notify any broker-dealers holding Exchange Securities, without
unreasonable delay prepare and furnish to each such holder a
reasonable number of copies of a prospectus supplemented or amended so
that, as thereafter delivered to purchasers of such Exchange
Securities during the Resale Period, such prospectus shall conform in
all material respects to the applicable requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
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<PAGE> 14
(v) use its reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of such Exchange
Registration Statement or any post-effective amendment thereto at the
earliest practicable date;
(vi) use its reasonable best efforts to (A) register or
qualify the Exchange Securities under the securities laws or blue sky
laws of such jurisdictions as are contemplated by Section 2(a) no
later than the commencement of the Exchange Offer, (B) keep such
registrations or qualifications in effect and comply with such laws so
as to permit the continuance of offers, sales and dealings therein in
such jurisdictions until the expiration of the Resale Period and (C)
take any and all other actions as may be reasonably necessary or
advisable to enable each broker-dealer holding Exchange Securities to
consummate the disposition thereof in such jurisdictions; provided,
however, that neither the Company nor the Exchange Issuer Trust shall
be required for any such purpose to (1) qualify as a foreign
corporation or trust, as the case may be, in any jurisdiction wherein
it would not otherwise be required to qualify but for the requirements
of this Section 3(c)(vi), (2) consent to general service of process in
any such jurisdiction or (3) make any changes to its certificate of
incorporation or by-laws or any agreement between it and its
stockholders or the Exchange Trust Agreement;
(vii) use its reasonable best efforts to obtain the consent or
approval of each governmental agency or authority, whether federal,
state or local, which may be required to effect the Exchange
Registration, the Exchange Offer and the offering and sale of Exchange
Securities by broker-dealers during the Resale Period;
(viii) provide a CUSIP number for all Exchange Securities, not
later than the applicable Effective Time;
(ix) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as
soon as practicable but no later than eighteen months after the
effective date of such Exchange Registration Statement, an earning
statement of the Company and its subsidiaries complying with Section
11(a) of the Securities Act (including, at the option of the Company,
Rule 158 thereunder).
(d) In connection with the Company's and the Issuer Trust's
obligations with respect to the Shelf Registration, if applicable, the Company
and the Issuer Trust shall, as soon as practicable (or as otherwise specified):
(i) prepare and file, or cause to be prepared and filed, with
the Commission, as soon as practicable but in any case within the time
periods
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<PAGE> 15
specified in Section 2(b), a Shelf Registration Statement on any form
which may be utilized by the Company and the Issuer Trust and which
shall register all of the Registrable Securities for resale by the
holders thereof in accordance with such method or methods of
disposition as may be specified by such of the holders as, from time
to time, may be Electing Holders and use its reasonable best efforts
to cause such Shelf Registration Statement to become effective as soon
as practicable but in any case within the time periods specified in
Section 2(b);
(ii) not less than 30 calendar days prior to the Effective
Time of the Shelf Registration Statement, mail the Notice and
Questionnaire to the holders of Registrable Securities; no holder
shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement as of the Effective Time, and no holder shall
be entitled to use the prospectus forming a part thereof for resales
of Registrable Securities at any time, unless such holder has returned
a completed and signed Notice and Questionnaire to the Company by the
deadline for response set forth therein; provided, however, holders of
Registrable Securities shall have at least 28 calendar days from the
date on which the Notice and Questionnaire is first mailed to such
holders to return a completed and signed Notice and Questionnaire to
the Company;
(iii) after the Effective Time of the Shelf Registration
Statement, upon the request of any holder of Registrable Securities
that is not then an Electing Holder, promptly send a Notice and
Questionnaire to such holder; provided that the Company and the Issuer
Trust shall not be required to take any action to name such holder as
a selling securityholder in the Shelf Registration Statement or to
enable such holder to use the prospectus forming a part thereof for
resales of Registrable Securities until such holder has returned a
completed and signed Notice and Questionnaire to the Company;
(iv) as soon as practicable prepare and file with the
Commission such amendments and supplements to such Shelf Registration
Statement and the prospectus included therein as may be necessary to
effect and maintain the effectiveness of such Shelf Registration
Statement for the period specified in Section 2(b) hereof and as may
be required by the applicable rules and regulations of the Commission
and the instructions applicable to the form of such Shelf Registration
Statement, and furnish to the Electing Holders copies of any such
supplement or amendment simultaneously with or prior to its being used
or filed with the Commission;
(v) comply with the provisions of the Securities Act with
respect to the disposition of all of the Registrable Securities
covered by such Shelf
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<PAGE> 16
Registration Statement in accordance with the intended methods of
disposition by the Electing Holders provided for in such Shelf
Registration Statement;
(vi) provide (A) the Electing Holders, (B) the underwriters
(which term, for purposes of this Agreement, shall include a person
deemed to be an underwriter within the meaning of Section 2(11) of the
Securities Act), if any, thereof, (C) any sales or placement agent
therefor, (D) counsel for any such underwriter or agent and (E) not
more than one counsel for all the Electing Holders the opportunity to
participate in the preparation of such Shelf Registration Statement,
each prospectus included therein or filed with the Commission and each
amendment or supplement thereto;
(vii) for a reasonable period prior to the filing of such
Shelf Registration Statement, and throughout the period specified in
Section 2(b), make available at reasonable times at the Company's
principal place of business or such other reasonable place for
inspection by the persons referred to in Section 3(d)(vi) who shall
certify to the Company that they have a current intention to sell the
Registrable Securities pursuant to the Shelf Registration such
financial and other information and books and records of the Company,
and cause the officers, employees, counsel and independent certified
public accountants of the Company to respond to such inquiries, as
shall be reasonably necessary, in the judgment of the respective
counsel referred to in such Section, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
provided, however, that each such party shall be required to maintain
in confidence and not to disclose to any other person any information
or records reasonably designated by the Company as being confidential,
until such time as (A) such information becomes a matter of public
record (whether by virtue of its inclusion in such registration
statement or otherwise), or (B) such person shall be required so to
disclose such information pursuant to a subpoena or order of any court
or other governmental agency or body having jurisdiction over the
matter (subject to the requirements of such order, and only after such
person shall have given the Company prompt prior written notice of
such requirement), or (C) such information is required to be set forth
in such Shelf Registration Statement or the prospectus included
therein or in an amendment to such Shelf Registration Statement or an
amendment or supplement to such prospectus in order that such Shelf
Registration Statement, prospectus, amendment or supplement, as the
case may be, complies with applicable requirements of the federal
securities laws and the rules and regulations of the Commission and
does not contain an untrue statement of a material fact or omit to
state therein a material fact required to be stated therein or
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<PAGE> 17
necessary to make the statements therein not misleading in light of
the circumstances then existing;
(viii) promptly notify each of the Electing Holders, any sales
or placement agent therefor and any underwriter thereof (which
notification may be made through any managing underwriter that is a
representative of such underwriter for such purpose) and confirm such
advice in writing, (A) when such Shelf Registration Statement or the
prospectus included therein or any prospectus amendment or supplement
or post-effective amendment has been filed, and, with respect to such
Shelf Registration Statement or any post-effective amendment, when the
same has become effective, (B) of any comments by the Commission and
by the blue sky or securities commissioner or regulator of any state
with respect thereto or any request by the Commission for amendments
or supplements to such Shelf Registration Statement or prospectus or
for additional information, (C) of the issuance by the Commission of
any stop order suspending the effectiveness of such Shelf Registration
Statement or the initiation or threatening of any proceedings for that
purpose, (D) if at any time the representations and warranties of the
Company contemplated by Section 3(d)(xvii) or Section 5 cease to be
true and correct in all material respects, (E) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, or (F) if at any time when a prospectus is required to
be delivered under the Securities Act, such Shelf Registration
Statement, prospectus, prospectus amendment or supplement or
post-effective amendment does not conform in all material respects to
the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder or contains an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the
circumstances then existing;
(ix) use its reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of such registration
statement or any post-effective amendment thereto at the earliest
practicable date;
(x) if requested by any managing underwriter or underwriters,
any placement or sales agent or any Electing Holder, promptly
incorporate in a prospectus supplement or post-effective amendment
such information as is required by the applicable rules and
regulations of the Commission and as such managing underwriter or
underwriters, such agent or such Electing Holder specifies should be
included therein relating to the terms of the sale of such Registrable
Securities, including information with respect to the
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<PAGE> 18
liquidation amount of Registrable Securities being sold by such
Electing Holder or agent or to any underwriters, the name and
description of such Electing Holder, agent or underwriter, the
offering price of such Registrable Securities and any discount,
commission or other compensation payable in respect thereof, the
purchase price being paid therefor by such underwriters and with
respect to any other terms of the offering of the Registrable
Securities to be sold by such Electing Holder or agent or to such
underwriters; and make all required filings of such prospectus
supplement or post-effective amendment promptly after notification of
the matters to be incorporated in such prospectus supplement or
post-effective amendment;
(xi) furnish to each Electing Holder, each placement or sales
agent, if any, therefor, each underwriter, if any, thereof and the
respective counsel referred to in Section 3(d)(vi) an executed copy
(or, in the case of an Electing Holder, a conformed copy) of such
Shelf Registration Statement, each such amendment and supplement
thereto (in each case including all exhibits thereto (in the case of
an Electing Holder of Registrable Securities, upon request) and
documents incorporated by reference therein) and such number of copies
of such Shelf Registration Statement (excluding exhibits thereto and
documents incorporated by reference therein unless specifically so
requested by such Electing Holder, agent or underwriter, as the case
may be) and of the prospectus included in such Shelf Registration
Statement (including each preliminary prospectus and any summary
prospectus), in conformity in all material respects with the
applicable requirements of the Securities Act and the Trust Indenture
Act and the rules and regulations of the Commission thereunder, and
such other documents, as such Electing Holder, agent, if any, and
underwriter, if any, may reasonably request in order to facilitate the
offering and disposition of the Registrable Securities owned by such
Electing Holder, offered or sold by such agent or underwritten by such
underwriter and to permit such Electing Holder, agent and underwriter
to satisfy the prospectus delivery requirements of the Securities Act;
and the Company hereby consents to the use of such prospectus
(including such preliminary and summary prospectus) and any amendment
or supplement thereto by each such Electing Holder and by any such
agent and underwriter, in each case in the form most recently provided
to such person by the Company, in connection with the offering and
sale of the Registrable Securities covered by the prospectus
(including such preliminary and summary prospectus) or any supplement
or amendment thereto;
(xii) use its reasonable best efforts to (A) register or
qualify the Registrable Securities to be included in such Shelf
Registration Statement under such securities laws or blue sky laws of
such jurisdictions as any Electing Holder and each placement or sales
agent, if any, therefor and
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<PAGE> 19
underwriter, if any, thereof shall reasonably request, (B) keep such
registrations or qualifications in effect and comply with such laws so
as to permit the continuance of offers, sales and dealings therein in
such jurisdictions during the period the Shelf Registration is
required to remain effective under Section 2(b) above and for so long
as may be necessary to enable any such Electing Holder, agent or
underwriter to complete its distribution of Registrable Securities
pursuant to such Shelf Registration Statement and (C) take any and all
other actions as may be reasonably necessary or advisable to enable
each such Electing Holder, agent, if any, and underwriter, if any, to
consummate the disposition in such jurisdictions of such Registrable
Securities; provided, however, that neither the Company nor the Issuer
Trust shall be required for any such purpose to (1) qualify as a
foreign corporation or trust, as the case may be, in any jurisdiction
wherein it would not otherwise be required to qualify but for the
requirements of this Section 3(d)(xii), (2) consent to general service
of process in any such jurisdiction or (3) make any changes to its
certificate of incorporation or by-laws or any agreement between it
and its stockholders or the Trust Agreement;
(xiii) use its reasonable best efforts to obtain the consent
or approval of each governmental agency or authority, whether federal,
state or local, which may be required to effect the Shelf Registration
or the offering or sale in connection therewith or to enable the
selling holder or holders to offer, or to consummate the disposition
of, their Registrable Securities;
(xiv) cooperate with the Electing Holders and the managing
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be
sold, which certificates shall be printed, lithographed or engraved,
or produced by any combination of such methods, and which shall not
bear any restrictive legends; and, in the case of an underwritten
offering, enable such Registrable Securities to be in such
denominations and registered in such names as the managing
underwriters may request (consistent with the Trust Agreement) at
least two business days prior to any sale of the Registrable
Securities;
(xv) provide a CUSIP number for all Registrable Securities,
not later than the applicable Effective Time;
(xvi) enter into one or more underwriting agreements,
engagement letters, agency agreements, "best efforts" underwriting
agreements or similar agreements, as appropriate, including customary
provisions relating to indemnification and contribution, and take such
other actions in connection therewith as any Electing Holders
aggregating at least 20% in aggregate
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<PAGE> 20
liquidation amount of the Registrable Securities at the time
outstanding shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(xvii) whether or not an agreement of the type referred to in
Section 3(d)(xvi) hereof is entered into and whether or not any
portion of the offering contemplated by the Shelf Registration is an
underwritten offering or is made through a placement or sales agent or
any other entity, (A) make such representations and warranties to the
Electing Holders and the placement or sales agent, if any, therefor
and the underwriters, if any, thereof substantially the same as those
set forth in Section 1 of the Purchase Agreement; (B) obtain an
opinion of counsel to the Company or the Issuer Trust, as applicable,
in customary form and covering matters customarily covered by such an
opinion, as the managing underwriters, if any, or as any Electing
Holders of at least 20% in aggregate liquidation amount of the
Registrable Securities at the time outstanding may reasonably request,
addressed to such Electing Holder or Electing Holders and the
placement or sales agent, if any, therefor and the underwriters, if
any, thereof and dated the effective date of such Shelf Registration
Statement (and if such Shelf Registration Statement contemplates an
underwritten offering of a part or all of the Registrable Securities,
dated the date of the closing under the underwriting agreement
relating thereto) (it being agreed that the matters to be covered by
such an opinion shall be substantially the same as the opinions
provided for in Sections 4(b), (c), (d) and (f) of the Purchase
Agreement); (C) obtain a "cold comfort" letter or letters from the
independent certified public accountants of the Company addressed to
the selling Electing Holders, the placement or sales agent, if any,
therefor or the underwriters, if any, thereof, dated (i) the effective
date of such Shelf Registration Statement and (ii) the effective date
of any prospectus supplement to the prospectus included in such Shelf
Registration Statement or post-effective amendment to such Shelf
Registration Statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of the
latest such statements included in such prospectus (and, if such Shelf
Registration Statement contemplates an underwritten offering pursuant
to any prospectus supplement to the prospectus included in such Shelf
Registration Statement or post-effective amendment to such Shelf
Registration Statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of the
latest such statements included in such prospectus, dated the date of
the closing under the underwriting agreement relating thereto), such
letter or letters to be in customary form and covering such matters of
the type customarily covered by letters of such type; (D) deliver such
documents and certificates, including officers' certificates, as may
be reasonably requested by any Electing Holders of at least 20% in
aggregate
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<PAGE> 21
liquidation amount of the Registrable Securities at the time
outstanding or the placement or sales agent, if any, therefor and the
managing underwriters, if any, thereof to evidence the accuracy of the
representations and warranties made pursuant to clause (A) above or
those contained in Section 5(a) hereof and the compliance with or
satisfaction of any agreements or conditions contained in the
underwriting agreement or other agreement entered into by the Company
or the Issuer Trust; and (E) undertake such obligations relating to
expense reimbursement, indemnification and contribution as are
provided in Section 6 hereof;
(xviii) notify in writing each holder of Registrable
Securities of any proposal by the Company or the Issuer Trust to amend
or waive any provision of this Agreement pursuant to Section 9(h)
hereof and of any amendment or waiver effected pursuant thereto, each
of which notices shall contain the text of the amendment or waiver
proposed or effected, as the case may be;
(xix) in the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or
participate as a member of an underwriting syndicate or selling group
or "assist in the distribution" (within the meaning of the Rules of
Fair Practice and the By-Laws of the National Association of
Securities Dealers, Inc. ("NASD") or any successor thereto, as amended
from time to time) thereof, whether as a holder of such Registrable
Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, assist such
broker-dealer in complying with the requirements of such Rules and
By-Laws, including by (A) if such Rules or By-Laws shall so require,
engaging a "qualified independent underwriter" (as defined in such
Schedule (or any successor thereto)) to participate in the preparation
of the Shelf Registration Statement relating to such Registrable
Securities, to exercise usual standards of due diligence in respect
thereto and, if any portion of the offering contemplated by such Shelf
Registration Statement is an underwritten offering or is made through
a placement or sales agent, to recommend the yield of such Registrable
Securities, (B) indemnifying any such qualified independent
underwriter to the extent of the indemnification of underwriters
provided in Section 6 hereof (or to such other customary extent as may
be requested by such underwriter), and (C) providing such information
to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Rules of Fair
Practice of the NASD; and
(xx) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as
soon as practicable but in any event not later than eighteen months
after the effective date of such Shelf Registration Statement, an
earning statement of the
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<PAGE> 22
Company and its subsidiaries complying with Section 11(a) of the
Securities Act (including, at the option of the Company, Rule 158
thereunder).
(e) In the event that the Company and the Issuer Trust would be
required, pursuant to Section 3(d)(viii)(F) above, to notify the Electing
Holders, the placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof, the Company and the Issuer Trust shall without
delay prepare and furnish to each of the Electing Holders, to each placement or
sales agent, if any, and to each such underwriter, if any, a reasonable number
of copies of a prospectus supplemented or amended so that, as thereafter
delivered to purchasers of Registrable Securities, such prospectus shall
conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing. Each Electing Holder agrees that upon receipt of
any notice from the Company or the Issuer Trust pursuant to Section
3(d)(viii)(F) hereof, such Electing Holder shall forthwith discontinue the
disposition of Registrable Securities pursuant to the Shelf Registration
Statement applicable to such Registrable Securities until such Electing Holder
shall have received copies of such amended or supplemented prospectus, and if
so directed by the Company or the Issuer Trust, such Electing Holder shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Electing Holder's possession of the
prospectus covering such Registrable Securities at the time of receipt of such
notice.
(f) In the event of a Shelf Registration, in addition to the
information required to be provided by each Electing Holder in its Notice
Questionnaire, the Company and the Issuer Trust may require such Electing
Holder to furnish to the Company such additional information regarding such
Electing Holder and such Electing Holder's intended method of distribution of
Registrable Securities as may be required in order to comply with the
Securities Act. Each such Electing Holder agrees to notify the Company and the
Issuer Trust as promptly as practicable of any inaccuracy or change in
information previously furnished by such Electing Holder to the Company and the
Issuer Trust or of the occurrence of any event in either case as a result of
which any prospectus relating to such Shelf Registration contains or would
contain an untrue statement of a material fact regarding such Electing Holder
or such Electing Holder's intended method of disposition of such Registrable
Securities or omits to state any material fact regarding such Electing Holder
or such Electing Holder's intended method of disposition of such Registrable
Securities required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and
promptly to furnish to the Company and the Issuer Trust any additional
information required to correct and update any previously furnished information
or required so that such prospectus shall
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<PAGE> 23
not contain, with respect to such Electing Holder or the disposition of such
Registrable Securities, an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
(g) Until the expiration of three years after the Closing Date, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144) to, resell any of the Securities or Junior Subordinated Debentures
that have been reacquired by any of them except pursuant to an effective
registration statement under the Securities Act.
4. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Agreement, including (a) all Commission and any NASD registration, filing and
review fees and expenses including fees and disbursements of counsel for the
placement or sales agent or underwriters in connection with such registration,
filing and review, (b) all fees and expenses in connection with the
qualification of the Registrable Securities for offering and sale under the
State securities and blue sky laws referred to in Section 3(d)(xii) hereof and
determination of their eligibility for investment under the laws of such
jurisdictions as any managing underwriters or the Electing Holders may
designate, including any fees and disbursements of counsel for the Electing
Holders (subject to the limitations of Clause (i) below) or underwriters in
connection with such qualification and determination, (c) all expenses relating
to the preparation, printing, production, distribution and reproduction of each
registration statement required to be filed hereunder, each prospectus included
therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the expenses of preparing the Registrable
Securities for delivery and the expenses of printing or producing any
underwriting agreements, agreements among underwriters, selling agreements and
blue sky or legal investment memoranda and all other documents in connection
with the offering, sale or delivery of Securities to be disposed of (including
certificates representing the Registrable Securities), (d) messenger, telephone
and delivery expenses relating to the offering, sale or delivery of Registrable
Securities and the preparation of documents referred in clause (c) above, (e)
fees and expenses of the Trustee (as defined in the Applicable Indenture) under
the Applicable Indenture, the Property Trustee and Delaware Trustee and
Administrative Trustees (as defined in the Applicable Trust Agreement) under
the Applicable Trust Agreement and the Guarantee Trustee (as defined in the
Applicable Guarantee) under the Applicable Guarantee and of any collateral
agent or custodian, (f) internal expenses (including all salaries and expenses
of the Company's officers and employees performing legal or accounting duties),
(g) fees, disbursements and expenses of counsel and independent certified
public accountants
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<PAGE> 24
of the Company (including the expenses of any opinions or "cold comfort"
letters required by or incident to such performance and compliance), (h) fees,
disbursements and expenses of any "qualified independent underwriter" engaged
pursuant to Section 3(d)(xix) hereof, (i) fees, disbursements and expenses of
one counsel for the Electing Holders retained in connection with a Shelf
Registration, as selected by the Electing Holders of at least a majority in
aggregate liquidation amount of the Registrable Securities held by Electing
Holders (which counsel shall be reasonably satisfactory to the Company), (j)
any fees charged by securities rating services for rating the Registrable
Securities, and (k) fees, expenses and disbursements of any other persons,
including special experts, retained by the Company in connection with such
registration (collectively, the "Registration Expenses"). To the extent that
any Registration Expenses are incurred, assumed or paid by any holder of
Registrable Securities or any placement or sales agent therefor or underwriter
thereof, the Company shall reimburse such person for the full amount of the
Registration Expenses so incurred, assumed or paid promptly after receipt of a
request therefor. Notwithstanding the foregoing, the holders of the Registrable
Securities being registered shall pay all agency fees and commissions and
underwriting discounts and commissions attributable to the sale of such
Registrable Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such holders (severally or jointly), other than
the counsel and experts specifically referred to above.
5. Representations and Warranties.
Each of the Company and the Issuer Trust represents and warrants to,
and agrees with, the Initial Purchasers and each of the holders from time to
time of Registrable Securities that:
(a) Each registration statement covering Registrable
Securities and each prospectus (including any preliminary or summary
prospectus) contained therein or furnished pursuant to Section 3(d) or
Section 3(c) hereof and any further amendments or supplements to any
such registration statement or prospectus, when it becomes effective
or is filed with the Commission, as the case may be, and, in the case
of an underwritten offering of Registrable Securities, at the time of
the closing under the underwriting agreement relating thereto, will
conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and at all times subsequent to the Effective
Time when a prospectus would be required to be delivered under the
Securities Act, other than from (i) such time as a notice has been
given to holders of Registrable Securities pursuant
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<PAGE> 25
to Section 3(d)(viii)(F) or Section 3(c)(iii)(F) hereof until (ii)
such time as the Company furnishes an amended or supplemented
prospectus pursuant to Section 3(e) or Section 3(c)(iv) hereof, each
such registration statement, and each prospectus (including any
summary prospectus) contained therein or furnished pursuant to Section
3(d) or Section 3(c) hereof, as then amended or supplemented, will
conform in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by a holder of Registrable Securities expressly for use therein.
(b) Any documents incorporated by reference in any prospectus
referred to in Section 5(a) hereof, when they become or became
effective or are or were filed with the Commission, as the case may
be, will conform or conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable,
and none of such documents will contain or contained an untrue
statement of a material fact or will omit or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a holder of Registrable
Securities expressly for use therein.
(c) The compliance by the Company with all of the provisions
of this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any subsidiary of the Company is
a party or by which the Company or any subsidiary of the Company is
bound or to which any of the property or assets of the Company or any
subsidiary of the Company is subject, nor will such action result in
any violation of the provisions of the certificate of incorporation,
as amended, or the by-laws of the Company or the Trust Agreement of
the Issuer Trust or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any subsidiary of the Company or any of their properties;
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the
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<PAGE> 26
consummation by the Company and the Issuer Trust of the transactions
contemplated by this Agreement, except the registration under the
Securities Act of the Registrable Securities, qualification of the
Applicable Indenture, the Applicable Trust Agreement and Applicable
Guarantee Agreement under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under State securities or Blue Sky laws in connection with
the offering and distribution of the Registrable Securities.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
6. Indemnification.
(a) Indemnification by the Company and the Issuer Trust. Each of the
Company and the Issuer Trust shall, and they hereby agree, jointly and
severally, to, indemnify and hold harmless each of the holders of Registrable
Securities included in an Exchange Registration Statement, each of the Electing
Holders of Registrable Securities included in a Shelf Registration Statement
and each person who participates as a placement or sales agent or as an
underwriter in any offering or sale of such Registrable Securities against any
losses, claims, damages or liabilities, joint or several, to which such holder,
agent or underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Exchange Registration Statement
or Shelf Registration Statement, as the case may be, under which such
Registrable Securities were registered under the Securities Act, or any
preliminary, final or summary prospectus contained therein or furnished by the
Company, the Issuer Trust or the Exchange Issuer Trust to any such holder,
Electing Holder, agent or underwriter, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and each of the Company and the Issuer Trust
shall, and it hereby agrees to, reimburse such holder, such Electing Holder,
such agent and such underwriter for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that neither the
Company nor the Issuer Trust shall not be liable to any such person in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, or preliminary, final or
summary prospectus, or amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company or the Issuer
Trust by such person expressly for use therein;
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<PAGE> 27
(b) Indemnification by the Holders and any Agents and Underwriters.
The Company and the Issuer Trust may require, as a condition to including any
Registrable Securities in any registration statement filed pursuant to Section
2(b) hereof and to entering into any underwriting agreement with respect
thereto, that the Company and the Issuer Trust shall have received an
undertaking reasonably satisfactory to it from the Electing Holder of such
Registrable Securities and from each underwriter named in any such underwriting
agreement, severally and not jointly, to (i) indemnify and hold harmless the
Company and the Issuer Trust, and all other holders of Registrable Securities,
against any losses, claims, damages or liabilities to which the Company or such
other holders of Registrable Securities may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, or any preliminary, final or summary prospectus
contained therein or furnished by the Company to any such Electing Holder,
agent or underwriter, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by such Electing Holder or underwriter expressly for use
therein, and (ii) reimburse the Company and the Issuer Trust for any legal or
other expenses reasonably incurred by the Company or the Issuer Trust in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that no such Electing Holder shall be
required to undertake liability to any person under this Section 6(b) for any
amounts in excess of the dollar amount of the proceeds to be received by such
Electing Holder from the sale of such Electing Holder's Registrable Securities
pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is
to be made against an indemnifying party pursuant to the indemnification
provisions of or contemplated by this Section 6, notify such indemnifying party
in writing of the commencement of such action; but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may
have to any indemnified party other than under the indemnification provisions
of or contemplated by Section 6(a) or 6(b) hereof. In case any such action
shall be brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, such indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
(who
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<PAGE> 28
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof
other than reasonable costs of investigation. No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) Contribution. If for any reason the indemnification provisions
contemplated by Section 6(a) or Section 6(b) are unavailable to or insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and the indemnified party in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or by such indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this Section 6(d) were determined by pro rata allocation (even if the
holders or any agents or underwriters or all of them were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 6(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, or liabilities (or actions in respect thereof) referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 6(d), no holder shall be required to contribute any amount in excess of
the amount by which the dollar amount of the proceeds received by such holder
from the sale of any Registrable
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<PAGE> 29
Securities (after deducting any fees, discounts and commissions applicable
thereto) exceeds the amount of any damages which such holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, and no underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The holders' and any underwriters'
obligations in this Section 6(d) to contribute shall be several in proportion
to the liquidation amount of Registrable Securities registered or underwritten,
as the case may be, by them and not joint.
(e) The obligations of the Company and the Issuer Trust under this
Section 6 shall be in addition to any liability which the Company and the
Issuer Trust may otherwise have and shall extend, upon the same terms and
conditions, to each officer, director and partner of each holder, agent and
underwriter and each person, if any, who controls any holder, agent or
underwriter within the meaning of the Securities Act; and the obligations of
the holders and any agents or underwriters contemplated by this Section 6 shall
be in addition to any liability which the respective holder, agent or
underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his consent, is named in any registration statement as about to
become a director of the Company), to each Issuer Trustee under the Applicable
Trust Agreement and to each person, if any, who controls the Company and the
Issuer Trust within the meaning of the Securities Act.
7. Underwritten Offerings.
(a) Selection of Underwriters. If any of the Registrable Securities
covered by the Shelf Registration are to be sold pursuant to an underwritten
offering, the managing underwriter or underwriters thereof shall be designated
by Electing Holders holding at least a majority in aggregate liquidation amount
of the Registrable Securities to be included in such offering, provided that
such designated managing underwriter or underwriters is or are reasonably
acceptable to the Company.
(b) Participation by Holders. Each holder of Registrable Securities
hereby agrees with each other such holder that no such holder may participate
in any underwritten offering hereunder unless such holder (i) agrees to sell
such holder's Registrable Securities on the basis provided in any underwriting
arrangements
-27-
<PAGE> 30
approved by the persons entitled hereunder to approve such arrangements and
(ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements.
8. Rule 144.
The Company covenants to the holders of Registrable Securities that to
the extent it shall be required to do so under the Exchange Act, the Company
shall timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities in
connection with that holder's sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements.
9. Miscellaneous.
(a) No Inconsistent Agreements. Each of the Company and the Issuer
Trust represents, warrants, covenants and agrees that it has not granted, and
shall not grant, registration rights with respect to Registrable Securities or
any other securities which would be inconsistent with the terms contained in
this Agreement.
(b) Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if the Company or the Issuer Trust fails to
perform any of their respective obligations hereunder and that the Initial
Purchasers and the holders from time to time of the Registrable Securities may
be irreparably harmed by any such failure, and accordingly agree that the
Initial Purchasers and such holders, in addition to any other remedy to which
they may be entitled at law or in equity, shall be entitled to compel specific
performance of the respective obligations of the Company and the Issuer Trust
under this Agreement in accordance with the terms and conditions of this
Agreement, in any court of the United States or any State thereof having
jurisdiction.
(c) Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly
-28-
<PAGE> 31
given when delivered by hand, if delivered personally or by courier, or three
days after being deposited in the mail (registered or certified mail, postage
prepaid, return receipt requested) as follows: If to the Company, to it at One
Commerce Street, Montgomery, Alabama 36192, Attention: W. Flake Oakley, if to
the Issuer Trust, to it at Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration, and if to a holder, to the address of such holder set forth in
the security register or other records of the Company or the Issuer Trust, or
to such other address as the Company or any such holder may have furnished to
the others in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
(d) Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the parties hereto and the holders from time to time of the
Registrable Securities and the respective successors and assigns of the parties
hereto and such holders. In the event that any transferee of any holder of
Registrable Securities shall acquire Registrable Securities, in any manner,
whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be deemed
a beneficiary hereof for all purposes and such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such transferee shall be entitled to receive the
benefits of, and be conclusively deemed to have agreed to be bound by all of
the applicable terms and provisions of this Agreement. If the Company shall so
request, any such successor, assign or transferee shall agree in writing to
acquire and hold the Registrable Securities subject to all of the applicable
terms hereof.
(e) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Agreement or made
pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
any holder of Registrable Securities, any director, officer or partner of such
holder, any agent or underwriter or any director, officer or partner thereof,
or any controlling person of any of the foregoing, and shall survive delivery
of and payment for the Registrable Securities pursuant to the Purchase
Agreement and the transfer and registration of Registrable Securities by such
holder and the consummation of an Exchange Offer.
(f) LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(g) Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this
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<PAGE> 32
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement.
(h) Entire Agreement; Amendments. This Agreement and the other
writings referred to herein (including the Applicable Indenture, Applicable
Trust Agreement and Applicable Guarantee and the form of Securities) or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter. This Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a
written instrument duly executed by the Company and the holders of at least a
majority in aggregate liquidation amount of the Registrable Securities at the
time outstanding. Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment or waiver effected
pursuant to this Section 9(h), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Registrable Securities or
is delivered to such holder.
(i) Inspection. For so long as this Agreement shall be in effect, this
Agreement and a complete list of the names and addresses of all the holders of
Registrable Securities shall be made available for inspection and copying on
any business day by any holder of Registrable Securities for proper purposes
only (which shall include any purpose related to the rights of the holders of
Registrable Securities under the Registrable Securities, the Applicable
Indenture, the Applicable Trust Agreement, the Applicable Guarantee Agreement
and this Agreement) at the offices of the Company at the address thereof set
forth in Section 9(c) above and at the office of the Trustee under the
Applicable Indenture.
(j) Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
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<PAGE> 33
Agreed to and accepted as of the date referred to above.
THE COLONIAL BANCGROUP
By:_____________________________
Name:
Title:
COLONIAL CAPITAL I
By:_____________________________
Name:
Title: Administrative Trustee
BEAR, STEARNS & CO. INC.
By:_____________________________
Name:
Title:
KEEFE, BRUYETTE & WOODS, INC.
By:_____________________________
Name:
Title:
<PAGE> 34
Exhibit A
Colonial Capital I
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE]*
The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in the Colonial Captial I (the
"Trust") 8.92% Capital Securities, Series A (the "Securities") are held.
The Trust is in the process of registering the Securities under the
Securities Act of 1933 for resale by the beneficial owners thereof. In order
to have their Securities included in the registration statement, beneficial
owners must complete and return the enclosed Notice of Registration Statement
and Selling Securityholder Questionnaire.
It is important that beneficial owners of the Securities receive a
copy of the enclosed materials as soon as possible as their rights to have the
Securities included in the registration statement depend upon their returning
the Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy
of the enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials
or have any questions pertaining to this matter, please contact Colonial
Capital I, c/o The Colonial BancGroup, Inc., One Commerce Street, Montgomery,
Alabama 36104, Attention: W. Flake Oakley.
____________________
* Not less than 28 calendar days from date of mailing.
<PAGE> 35
Colonial Capital I
Notice of Registration Statement
and
Selling Securityholder Questionnaire
(Date)
Reference is hereby made to the Exchange and Registration Rights
Agreement (the "Exchange and Registration Rights Agreement") among The Colonial
BancGroup, Inc., Colonial Captial I (the "Trust") and the Initial Purchasers
named therein. Pursuant to the Exchange and Registration Rights Agreement, the
Company has filed with the United States Securities and Exchange Commission
(the "Commission") a registration statement on Form [___] (the "Shelf
Registration Statement") for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the "Securities Act"), of the Trust's
8.92% Capital Securities, Series A (the "Securities"). A copy of the Exchange
and Registration Rights Agreement is attached hereto. All capitalized terms
not otherwise defined herein shall have the meanings ascribed thereto in the
Exchange and Registration Rights Agreement.
Each beneficial owner of Registrable Securities (as defined below) is
entitled to have the Registrable Securities beneficially owned by it included
in the Shelf Registration Statement. In order to have Registrable Securities
included in the Shelf Registration Statement, this Notice of Registration
Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire")
must be completed, executed and delivered to the Company's counsel at the
address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE].
Beneficial owners of Registrable Securities who do not complete, execute and
return this Notice and Questionnaire by such date (i) will not be named as
selling securityholders in the Shelf Registration Statement and (ii) may not
use the Prospectus forming a part thereof for resales of Registrable
Securities.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and related Prospectus.
The term "Registrable Securities" is defined in the Exchange and
Registration Rights Agreement.
A-2
<PAGE> 36
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3).
The undersigned, by signing and returning this Notice and Questionnaire, agrees
to be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Exchange and Registration
Rights Agreement, including, without limitation, Section 6 of the Registration
Rights Agreement, as if the undersigned Selling Securityholder were an original
party thereto.
Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the Selling Securityholder will be required to deliver
to the Company and Trust the Notice of Transfer set forth in Appendix A to the
Prospectus and as Exhibit B to the Exchange and Registration Rights Agreement.
The Selling Securityholder hereby provides the following information
to the Company and represents and warrants that such information is accurate
and complete:
A-3
<PAGE> 37
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
_______________________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as in (a) above)
of Registrable Securities Listed in Item (3) below:
_______________________________________________________________________
(c) Full Legal Name of DTC Participant (if applicable and if not the same
as (b) above) Through Which Registrable Securities Listed in Item (3)
below are Held:
_______________________________________________________________________
(2) Address for Notices to Selling Securityholder:
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Telephone: _____________________
Fax: _____________________
Contact Person: _____________________
(3) Beneficial Ownership of Securities:
Except as set forth below in this Item (3), the undersigned does not
beneficially own any Securities.
(a) Liquidation amount of Registrable Securities beneficially
owned:_____________________________________________________________________
CUSIP No(s). of such Registrable Securities:__________________________
(b) Liquidation amount of Securities other than Registrable Securities
beneficially owned:________________________________________________________
A-4
<PAGE> 38
CUSIP No(s). of such other Securities: _______________________________
(c) Liquidation amount of Registrable Securities which the undersigned
wishes to be included in the Shelf Registration
Statement:_____________________________________________________________
CUSIP No(s). of such Registrable Securities to be included in the Shelf
Registration Statement:___________________________________________________
(4) Beneficial Ownership of Other Securities of the Company:
Except as set forth below in this Item (4), the undersigned Selling
Securityholder is not the beneficial or registered owner of any other
securities of the Company, other than the Securities listed above in Item (3).
State any exceptions here:
(5) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any of
its affiliates, officers, directors or principal equity holders (5% or more)
has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item (3) only
as follows (if at all): Such Registrable Securities may be sold from time to
time directly by the undersigned Selling Securityholder or, alternatively,
through underwriters, broker-dealers or agents. Such Registrable Securities
may be sold in one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time of sale,
or at negotiated prices. Such sales may be effected in transactions (which may
involve crosses or block transactions) (i) on any national securities exchange
or quotation service on which the Registered Securities may be listed or
A-5
<PAGE> 39
quoted at the time of sale, (ii) in the over-the-counter market, (iii) in
transactions otherwise than on such exchanges or services or in the
over-the-counter market, or (iv) through the writing of options. In connection
with sales of the Registrable Securities or otherwise, the Selling
Securityholder may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the Registrable Securities in the course
of hedging the positions they assume. The Selling Securityholder may also sell
Registrable Securities short and deliver Registrable Securities to close out
such short positions, or loan or pledge Registrable Securities to
broker-dealers that in turn may sell such securities.
State any exceptions here:
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the rules and regulations thereunder,
particularly Rule 10b-6.
In the event that the Selling Securityholder transfers all or any portion
of the Registrable Securities listed in Item (3) above after the date on which
such information is provided to the Company, the Selling Securityholder agrees
to notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Exchange and
Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the disclosure of
the information contained herein in its answers to Items (1) through (6) above
and the inclusion of such information in the Shelf Registration Statement and
related Prospectus. The Selling Securityholder understands that such
information will be relied upon by the Company in connection with the
preparation of the Shelf Registration Statement and related Prospectus.
In accordance with the Selling Securityholder's obligation under Section
3(d) of the Exchange and Registration Rights Agreement to provide such
information as may be required by law for inclusion in the Shelf Registration
Statement, the Selling Securityholder agrees to promptly notify the Company of
any inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration
Statement remains in effect. All notices hereunder and
A-6
<PAGE> 40
pursuant to the Exchange and Registration Rights Agreement shall be made in
writing, by hand-delivery, first-class mail, or air courier guaranteeing
overnight delivery as follows:
(i) To the Company:
The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Attention: W. Flake Oakley.
(ii) With a copy to:
Miller, Hamilton, Snider & Odom, L.L.C.
One Commerce Street, Suite 802
Montgomery, Alabama 36104
(334) 834-5550
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company's counsel, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above. This Agreement shall be governed in all respects by the laws of the
State of New York.
A-7
<PAGE> 41
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.
Dated: _________________________
---------------------------------------------------------
Selling Securityholder
(Print/type full legal name of beneficial
owner of Registrable Securities)
By:
------------------------------------------------------
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT
ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:
Miller, Hamilton, Snider & Odom, L.L.C.
One Commerce Street, Suite 802
Montgomery, Alabama 36104
(334) 834-5550
A-8
<PAGE> 42
Exhibit B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Colonial Capital Trust I
c/o The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Attention: Administrative Trustee
Re: Colonial Capital I (the "Trust")
8.92% Capital Securites, Series A
-------------------------------------
Dear Sirs:
Please be advised that _____________________ has transferred
$___________ aggregate liquidation amount of the above-referenced Securities
pursuant to an effective Registration Statement on Form [___] (File No.
333-____) filed by The Colonial BancGroup, Inc.
We hereby certify that the prospectus delivery requirements, if any,
of the Securities Act of 1933, as amended, have been satisfied and that the
above-named beneficial owner of the Securities is named as a "Selling Holder"
in the Prospectus dated ___________, 199_ or in supplements thereto, and that
the aggregate liquidation amount of the Securities transferred are the
Securities listed in such Prospectus opposite such owner's name.
Dated:
Very truly yours,
________________________
(Name)
By: ________________________
(Authorized Signature)
B-1
<PAGE> 1
EXHIBIT 4(J)
================================================================================
AMENDED AND RESTATED TRUST AGREEMENT
AMONG
THE COLONIAL BANCGROUP, INC.,
as Depositor
WILMINGTON TRUST COMPANY,
as Property Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
and the several Holders of the Trust Securities
Dated as of January 29, 1997
COLONIAL CAPITAL I
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINED TERMS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.2 Office of the Delaware Trustee; Principal Place of Business . . . . . . . . . . . . 12
SECTION 2.3 Initial Contribution of Trust Property; Organizational Expenses . . . . . . . . . . 12
SECTION 2.4 Issuance of the Capital Securities . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.5 Issuance of the Common Securities; Subscription and Purchase of Debentures . . . . . 13
SECTION 2.6 Continuation of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.7 Authorization to Enter into Certain Transactions . . . . . . . . . . . . . . . . . . 13
SECTION 2.8 Assets of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.9 Title to Trust Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 Payment Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.2 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.3 Subordination of Common Securities . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.4 Payment Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.5 Tax Returns and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.6 Payment of Taxes, Duties, Etc. of the Issuer Trust . . . . . . . . . . . . . . . . . 22
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 4.7 Payments under Indenture or Pursuant to Direct Actions . . . . . . . . . . . . . . . 23
SECTION 4.8 Liability of the Holder of Common Securities . . . . . . . . . . . . . . . . . . . . 23
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1 Initial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.2 The Trust Securities Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.3 Execution and Delivery of Trust Securities Certificates . . . . . . . . . . . . . . 24
SECTION 5.4 Book-Entry Capital Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.5 Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges; Securities Act Legends . . . . . . . . . . . . . . . . . . 26
SECTION 5.6 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates . . . . . . . . . 30
SECTION 5.7 Persons Deemed Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.8 Access to List of Holders' Names and Addresses . . . . . . . . . . . . . . . . . . . 31
SECTION 5.9 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.1 0Appointment of Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.1 1Ownership of Common Securities by Depositor . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.1 2Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.1 3Rights of Holders; Waivers of Past Defaults . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1 Limitations on Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.2 Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.3 Meetings of Holders of the Capital Securities . . . . . . . . . . . . . . . . . . . 36
SECTION 6.4 Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.5 Proxies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.6 Holder Action by Written Consent . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.7 Record Date for Voting and Other Purposes . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.8 Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.9 Inspection of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 Representations and Warranties of the Property Trustee and the Delaware
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.2 Representations and Warranties of Depositor . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VIII
THE ISSUER TRUSTEES; PAYING AGENTS
SECTION 8.1 Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.2 Certain Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.3 Certain Rights of Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.4 Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . 45
SECTION 8.5 May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.6 Compensation; Indemnity; Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.7 Corporate Property Trustee Required; Eligibility of Issuer Trustees . . . . . . . . 47
SECTION 8.8 Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.9 Co-Trustees and Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.10 Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . 49
SECTION 8.11 Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 8.12 Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . 51
SECTION 8.13 Preferential Collection of Claims Against Depositor or Issuer
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8.14 Property Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8.15 Reports by Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.16 Reports to the Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.17 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . 53
SECTION 8.18 Number of Issuer Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.19 Delegation of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.20 Appointment of Administrative Trustees . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1 Termination Upon Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.2 Early Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.3 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 9.4 Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 9.5 Mergers, Consolidations, Amalgamations or Replacements of Issuer Trust . . . . . . 57
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Limitation of Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.2 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.3 Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.5 Payments Due on Non-Business Day . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.6 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.8 Reports, Notices and Demands . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.9 Agreement Not to Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.10 Trust Indenture Act; Conflict with Trust Indenture Act . . . . . . . . . . . . . . 61
SECTION 10.11 Acceptance of Terms of Trust Agreement, Guarantee Agreement, Indenture and
Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 62
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Capital Securities Certificate
Exhibit F Form of Restricted Securities Certificate
</TABLE>
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<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT, dated as of January 29, 1997,
among (i) The Colonial BancGroup, Inc., a Delaware corporation (including any
successors or assigns, the "Depositor"), (ii) Wilmington Trust Company, a
banking corporation duly organized and existing under the laws of the State of
Delaware, as property trustee (in such capacity, the "Property Trustee" and, in
its separate corporate capacity and not in its capacity as Property Trustee,
the "Bank"), (iii) Wilmington Trust Company, a banking corporation duly
organized and existing under the laws of the State of Delaware, as Delaware
trustee (in such capacity, the "Delaware Trustee"), (iv) W. Flake Oakely, an
individual, and Young J. Boozer, III, an individual, each of whose address is
c/o The Colonial BancGroup, Inc., One Commerce Street, Montgomery, Alabama
36104 (each an "Administrative Trustee"), (the Property Trustee, the Delaware
Trustee and the Administrative Trustees being referred to collectively as the
"Issuer 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 entering into the Trust Agreement, dated as of January 24, 1997
(the "Original Trust Agreement"), and by the execution and filing by the
Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on January 24, 1997, attached as Exhibit A; and
WHEREAS, the Depositor and the Issuer Trustees desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common Securities by
the Issuer Trust to the Depositor, (ii) the issuance and sale of the Capital
Securities by the Issuer Trust pursuant to the Purchase Agreement, (iii) the
acquisition by the Issuer Trust from the Depositor of all of the right, title
and interest in the Debentures, and (iv) the appointment of the Property
Trustee and the Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates
the Original Trust Agreement in its entirety and agrees as follows:
<PAGE> 7
ARTICLE I
DEFINED TERMS
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;
(e) Unless the context otherwise requires, any reference to an
"Article", a "Section" or an "Exhibit" refers to an Article, a Section or an
Exhibit, as the case may be, of or to this Trust Agreement; and
(f) The words "hereby", "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 6.8.
"Additional Distributions" means, with respect to Trust Securities of
a given Liquidation Amount and/or a given period, the amount of Additional
Interest (as defined in the Indenture) paid by the Depositor on a Like Amount
of Debentures for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustee" means each Person appointed in accordance
with Section 8.20 solely in such Person's capacity as Administrative Trustee of
the Issuer Trust heretofore created and continued hereunder and not in such
Person's individual capacity, or any successor Administrative Trustee appointed
as herein provided.
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"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.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Book-Entry Capital Security, the rules and procedures
of the Clearing Agency for such Book-Entry Capital Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) 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 any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar 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
any such decree or order unstayed and in effect for a period of 60 consecutive
days; or
(b) 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 any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any 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 and its
willingness to be adjudicated a bankrupt, or the taking of corporate action by
such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board of Directors" means the board of directors of the Depositor or
the Executive Committee of the board of directors of the Depositor (or any
other committee of the board of directors of the Depositor performing similar
functions) or a committee designated by
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<PAGE> 9
the board of directors of the Depositor (or any such committee), comprised of
two or more members of the board of directors of the Depositor or officers of
the Depositor, or both.
"Book-Entry Capital Securities Certificate" means a Capital Securities
Certificate evidencing ownership of Book-Entry Capital Securities.
"Book-Entry Capital Security" means a Capital Security, the ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 5.4.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (c) a day on which the
Property Trustee's Corporate Trust Office or the Corporate Trust Office of the
Debenture Trustee is closed for business.
"Capital Security" means an undivided beneficial interest in the
assets of the Issuer Trust, having a Liquidation Amount of $1,000 and having
the rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution to the extent provided
herein, and designated as 8.92% Capital Securities, Series A.
"Capital Securities Certificate" means a certificate evidencing
ownership of Capital Securities, substantially in the form attached as Exhibit
E.
"Certificate Depository Agreement" means the agreement among the
Issuer Trust, the Depositor and DTC, as the initial Clearing Agency, dated as
of the Closing Date, substantially in the form attached as Exhibit B, 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. DTC 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.
"Closing Date" means the Time of Delivery, which date is also the date
of execution and delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit
C.
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<PAGE> 10
"Common Security" means an undivided beneficial interest in the assets
of the Issuer Trust, having a Liquidation Amount of $1,000 and having the
rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution to the extent provided
herein.
"Corporate Trust Office" means (i) when used with respect to the
Property Trustee, the principal office of the Property Trustee located in
Wilmington, Delaware, and (ii) when used with respect to the Debenture Trustee,
the principal office of the Debenture Trustee located in Wilmington, Delaware.
"Debenture Event of Default" means any "Event of Default" specified in
Section 5.1 of the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to
be redeemed under the Indenture, the date fixed for redemption of such
Debentures under the Indenture.
"Debenture Trustee" means the Person identified as the "Trustee" in
the Indenture, solely in its capacity as Trustee pursuant to the Indenture and
not in its individual capacity, or its successor in interest in such capacity,
or any successor Trustee appointed as provided in the Indenture.
"Debentures" means the Depositor's 8.92% Junior Subordinated
Deferrable Interest Debentures, Series A, issued pursuant to the Indenture.
"Definitive Capital Securities Certificates" means either or both (as
the context requires) of (i) Capital Securities Certificates issued as
Book-Entry Capital Securities Certificates as provided in Section 5.2 or 5.4,
and (ii) Capital Securities Certificates issued in certificated, fully
registered form as provided in Section 5.2, 5.4 or 5.5.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., or any successor statute
thereto, in each case as amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware
Trustee" in the preamble to this Trust Agreement, solely in its capacity as
Delaware Trustee of the trust heretofore created 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" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
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"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"DTC" means The Depository Trust Company.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such event 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):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Issuer 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
(c) default by the Issuer Trust in the payment of any
Redemption Price of any Trust Security when it becomes due and
payable; or
(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in this
Trust Agreement (other than those specified in clause (b) or (c)
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 Issuer Trustees and to the Depositor by the Holders of at least
25% in aggregate Liquidation Amount of the Outstanding Capital
Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the
Property Trustee if a successor Property Trustee has not been
appointed within 90 days thereof.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities, dated as of the Closing Date, between The Colonial BancGroup, Inc.
and the Issuer Trust, substantially in the form attached as Exhibit D, as
amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Guarantee Agreement" means the Guarantee Agreement executed and
delivered by the Depositor and Wilmington Trust Company, as guarantee trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Capital Securities, as amended from time to
time.
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<PAGE> 12
"Holder" means a Person in whose name a Trust Security or Trust
Securities are registered in the Securities Register; any such Person shall be
deemed to be a beneficial owner within the meaning of the Delaware Business
Trust Act.
"IAI Capital Securities" means the Capital Securities sold by the
Purchasers in the initial offering contemplated by the Purchase Agreement to
Institutional Accredited Investors in reliance on an exemption from the
registration requirements of the Securities Act other than Rule 144A, as
specified by the Purchasers to the Depositor and the Property Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as of
January 29, 1997, between the Depositor and the Debenture Trustee, as trustee,
as amended or supplemented from time to time.
"Institutional Accredited Investor" means an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act.
"Issuer Trust" means the Delaware business trust known as "Colonial
Capital I", which was created on January 24, 1997, under the Delaware Business
Trust Act pursuant to the Original Trust Agreement and is continued pursuant to
this Trust Agreement.
"Issuer Trustees" means, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"Investment Company Act" means the Investment Company Act of 1940, or
any successor statute thereto, in each case as amended from time to time.
"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 (a) with respect to a redemption of any Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture, the proceeds of which will be used to pay the Redemption Price of
such Trust Securities, (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a dissolution or liquidation of
the Issuer Trust, Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the Holder to whom such Debentures are
distributed, and (c) with respect to any distribution of Additional
Distributions to Holders of Trust Securities, Debentures having a principal
amount equal to the Liquidation Amount of the Trust Securities in respect of
which such distribution is made.
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<PAGE> 13
"Liquidation Amount" means the stated amount of $1,000 per Trust
Security.
"Liquidation Date" means the date of the dissolution, winding-up or
termination of the Issuer Trust pursuant to Section 9.4.
"Liquidation Distribution" has the meaning specified in Section
9.4(d).
"Majority in Liquidation Amount of the Capital Securities" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount of all then Outstanding
Capital Securities.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or one of the Executive
Vice Presidents, and by the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary, of the Depositor, and delivered to the Issuer Trustees.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Trust Agreement shall include:
(a) a statement by each officer signing the Officers'
Certificate that such officer 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 such officer in rendering
the Officers' Certificate;
(c) a statement that 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 such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Depositor or any Affiliate of the Depositor.
"Original Trust Agreement" has the meaning specified in the recitals
to this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as
of the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore cancelled by the Property
Trustee or delivered to the Property Trustee for cancellation;
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<PAGE> 14
(b) Trust Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent; provided that, if such Trust Securities
are to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
(c) Trust Securities that have been paid or in exchange for or
in lieu of which other Capital Securities have been executed and
delivered pursuant to Sections 5.4, 5.5, 5.6 and 5.11;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Capital Securities owned by the Depositor, any Issuer Trustee or any Affiliate
of the Depositor or any Issuer Trustee shall be disregarded and deemed not to
be Outstanding, except that (a) in determining whether any Issuer Trustee shall
be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Capital Securities that such Issuer
Trustee knows to be so owned shall be so disregarded, and (b) the foregoing
clause (a) shall not apply at any time when all of the Outstanding Capital
Securities are owned by the Depositor, one or more of the Issuer Trustees
and/or any such Affiliate. Capital Securities so owned that have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrative Trustees the pledgee's right so to act with
respect to such Capital Securities and that the pledgee is not the Depositor or
any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of Book-Entry
Capital Securities 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 5.10 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Holders in which all amounts paid in respect
of the Debentures will be held and from which the Property Trustee, through the
Paying Agent, shall make payments to the Holders in accordance with Sections
4.1 and 4.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, company,
limited liability company, trust, unincorporated association, or government or
any agency or political subdivision thereof, or any other entity of whatever
nature.
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<PAGE> 15
"PORTAL" means the Private Offering, Resales and Trading through
Automatic Linkages (PORTAL) Market, and any successor market thereto.
"Plan" means an employee benefit or other plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended, or Section
4975 of the Internal Revenue Code of 1986.
"Plan Asset Entity" means any Person whose underlying assets include
"plan assets" by reason of any Plan's investment in such Person.
"Property Trustee" means the Person identified as the "Property
Trustee" in the preamble to this Trust Agreement, solely in its capacity as
Property Trustee of the trust heretofore created and continued hereunder and
not in its individual capacity, or its successor in interest in such capacity,
or any successor property trustee appointed as herein provided.
"PTCE" means a U.S. Department of Labor Prohibited Transaction Class
Exemption.
"Purchase Agreement" means the Purchase Agreement, dated as of January
24,1997, among the Issuer Trust, the Depositor and the Purchasers named in
Schedule I thereto, as the same may be amended from time to time.
"Purchasers" has the meaning specified in the Purchase Agreement.
"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 Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium,
if any, paid by the Depositor upon the concurrent redemption of a Like Amount
of Debentures.
"Registration Default" has the meaning specified in the Registration
Rights Agreement.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement among the Depositor, the Issuer Trust and the Purchasers,
dated as of January 29, 1997.
"Regulation D" means Regulation D under the Securities Act (or any
successor provision), as it may be amended from time to time.
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"Relevant Trustee" has the meaning specified in Section 8.10.
"Restricted Capital Securities" means all Capital Securities the
Capital Securities Certificate, including Book-Entry Capital Securities
Certificate, for which is required pursuant to Section 5.5(c) to bear a
Restricted Capital Securities Legend.
"Restricted Capital Securities Legend" means a legend substantially in
the form of the legend required in the form of Capital Securities Certificate
set forth in Exhibit E to be placed upon a Restricted Securities Certificate.
"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Exhibit F.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A Capital Securities" means the Capital Securities purchased
by the Purchasers from the Issuer Trust pursuant to the Purchase Agreement,
other than the IAI Capital Securities.
"Securities Act" means the Securities Act of 1933, and any successor
statute thereto, in each case as amended from time to time.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.5.
"Special Distributions" has the meaning specified in the Registration
Rights Agreement.
"Successor Capital Securities" of any particular Capital Securities
Certificate means every Capital Securities Certificate issued after, and
evidencing all or a portion of the same beneficial interest in the Issuer Trust
as that evidenced by, such particular Capital Securities Certificate; and, for
the purposes of this definition, any Capital Securities Certificate executed
and delivered under Section 5.6 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Capital Securities Certificate shall be deemed to
evidence the same beneficial interest in the Issuer Trust as the mutilated,
destroyed, lost or stolen Capital Securities Certificate.
"Time of Delivery" has the meaning specified in the Purchase
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 (i) all Exhibits, and (ii) for all
purposes of this Trust Agreement and any
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<PAGE> 17
such modification, amendment or supplement, the provisions of the Trust
Indenture Act that are deemed to be a part of and govern this Trust Agreement
and any such modification, amendment or supplement, respectively.
"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 if 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 (a) the Debentures, (b) any cash on deposit in,
or owing to, the Payment Account, and (c) 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 the trusts of this Trust
Agreement.
"Trust Security" means any one of the Common Securities or the Capital
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name.
The trust continued hereby shall be known as "Colonial Capital I", as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Issuer Trustees, in which name the Issuer Trustees may conduct the business of
the Issuer Trust, make and execute contracts and other instruments on behalf of
the Issuer Trust and sue and be sued.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of
Business.
The address of the Delaware Trustee in the State of Delaware is Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration, or such other address in the State of Delaware
as the Delaware Trustee may designate by written notice to the Holders, the
Depositor, the Property Trustee and the Administrative Trustees. The principal
executive office of the Issuer Trust is c/o The Colonial BancGroup, Inc., One
Commerce Street, Montgomery, Alabama 36104, Attention: W. Flake Oakley.
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SECTION 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property 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 Issuer Trust as they arise or shall, upon request of any Issuer
Trustee, promptly reimburse such Issuer Trustee for any such expenses paid by
such Issuer Trustee. The Depositor shall make no claim upon the Trust Property
for the payment of such expenses.
SECTION 2.4. Issuance of the Capital Securities.
As of January 24, 1997, the Depositor, both on its own behalf and on
behalf of the Issuer Trust pursuant to the Original Trust Agreement, executed
and delivered the Purchase Agreement. Contemporaneously with the execution and
delivery of this Trust Agreement, an Administrative Trustee, on behalf of the
Issuer Trust, shall manually execute in accordance with Section 5.2 and 5.3 and
the Property Trustee shall deliver to the Purchasers, Capital Securities
Certificates, registered in the names requested by the Purchasers, evidencing
an aggregate of 70,000 Capital Securities having an aggregate Liquidation
Amount of $70,000,000, against receipt of the aggregate purchase price of such
Capital Securities of $70,000,000, by the Property Trustee.
SECTION 2.5. Issuance of the Common Securities; Subscription and
Purchase of Debentures.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Issuer Trust, shall
execute in accordance with Section 5.2 and 5.3 and the Property Trustee shall
deliver to the Depositor Common Securities Certificates, registered in the name
of the Depositor, evidencing an aggregate of 2,165 Common Securities having an
aggregate Liquidation Amount of $2,165,000, against receipt of the aggregate
purchase price of such Common Securities of $2,165,000, to the Property
Trustee. Contemporaneously therewith, the Depositor shall issue and sell to
the Issuer Trust, and the Issuer Trust shall purchase from the Depositor,
Debentures having an aggregate principal amount equal to $72,165,000 registered
in the name of the Property Trustee on behalf of the Issuer Trust and, in
satisfaction of the purchase price for such Debentures, the Property Trustee,
on behalf of the Issuer Trust, shall deliver to the Depositor the sum of
$72,165,000 (being the sum of the amounts delivered to the Property Trustee
pursuant to (i) the second sentence of Section 2.4, and (ii) the first sentence
of this Section 2.5).
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SECTION 2.6. Continuation of Trust.
The exclusive purposes and functions of the Issuer Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Debentures, and (b) to engage in only those activities necessary or
incidental thereto. The Depositor hereby appoints the Issuer Trustees as
trustees of the Issuer Trust, to have all the rights, powers and duties to the
extent set forth herein, and the respective Issuer Trustees hereby accept such
appointment. 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 Issuer Trust and the Holders. The Administrative Trustees shall
have all rights, powers and duties set forth herein and in accordance with
applicable law. 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 of the Issuer
Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act and for taking such actions as
are required to be taken by a Delaware trustee under the Delaware Business
Trust Act.
SECTION 2.7. Authorization to Enter into Certain Transactions.
(a) The Issuer Trustees shall conduct the affairs of the Issuer Trust
in accordance with the terms of this Trust Agreement. Subject to the
limitations set forth in paragraph (b) of this Section 2.7, and in accordance
with the following provisions (i) and (ii), the Issuer Trustees shall have the
authority to enter into all transactions and agreements determined by the
Issuer Trustees to be appropriate in exercising the authority, express or
implied, otherwise granted to the Issuer Trustees, as the case may be, under
this Trust Agreement, and to perform all acts in furtherance thereof, including
the following:
(i) Each Administrative Trustee shall have the power and
authority to act on behalf of the Issuer Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) causing the Issuer Trust to enter into, and to
execute, deliver and perform on behalf of the Issuer Trust,
the Expense Agreement, the Registration Rights Agreement and
the Certificate Depository Agreement and such other agreements
as may be necessary or desirable in connection with the
purposes and function of the Issuer Trust;
(C) assisting in compliance with the duties and
obligations of the Issuer Trust under the Registration Rights
Agreement and the Securities Act and under applicable state
securities or blue sky laws (including by means of
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registration of the Capital Securities thereunder from time to
time),and the Trust Indenture Act;
(D) assisting in obtaining the designation of the
Capital Securities for trading in PORTAL;
(E) assisting in the sending of notices (other than
notices of default) and other information regarding the Trust
Securities and the Debentures to the Holders in accordance
with this Trust Agreement;
(F) consenting to the appointment of a Paying Agent,
authenticating agent and Securities Registrar in accordance
with this Trust Agreement (which consent shall not be
unreasonably withheld);
(G) executing the Trust Securities on behalf of the
Issuer Trust in accordance with this Trust Agreement;
(H) executing and delivering closing certificates, if
any, pursuant to the Purchase Agreement and application for a
taxpayer identification number for the Issuer Trust;
(I) unless otherwise determined by the Property
Trustee or Holders of at least a Majority in Liquidation
Amount of the Capital Securities or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act, to
executing on behalf of the Issuer Trust (either acting alone
or together with any other Administrative Trustee) any
documents that the Administrative Trustees have the power to
execute pursuant to this Trust Agreement; and
(J) taking any action incidental to the foregoing as
the Issuer Trustees may from time to time determine is
necessary or advisable to give effect to the terms of this
Trust Agreement.
(ii) The Property Trustee shall have the power, duty and
authority to act on behalf of the Issuer Trust with respect to the
following matters:
(A) establishing the Payment Account;
(B) receiving the Debentures;
(C) collecting interest, principal and any other
payments made in respect of the Debentures and the holding of
such amounts in the Payment Account;
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(D) distributing through any Paying Agent of amounts
distributable to the Holders in respect of the Trust
Securities;
(E) exercising all of the rights, powers and
privileges of a holder of the Debentures;
(F) sending notices of default and other information
regarding the Trust Securities and the Debentures to the
Holders in accordance with this Trust Agreement;
(G) distributing the Trust Property in accordance with
the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement,
winding up the affairs of and liquidating the Issuer Trust and
preparing, executing and filing the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(I) after an Event of Default (other than under
paragraph (b), (c), (d) or (e) of the definition of such term
if such Event of Default is by or with respect to the Property
Trustee) taking of any action incidental to the foregoing as
the Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this
Trust Agreement and to protect and conserve the Trust Property
for the benefit of the Holders (without consideration of the
effect of any such action on any particular Holder);
(J) performing any of the duties, liabilities, powers
or the authority of the Administrative Trustees set forth in
Section 2.7(a)(i)(D), (E) and (I).
(b) So long as this Trust Agreement remains in effect, the Issuer
Trust (or the Issuer Trustees acting on behalf of the Issuer Trust) shall not
undertake any business, activities or transaction except as expressly provided
herein or contemplated hereby. In particular, the Issuer Trustees shall not (i)
acquire any investments or engage in any activities not authorized by this
Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge,
set-off or otherwise dispose of any of the Trust Property or interests therein,
including to Holders, except as expressly provided herein, (iii) take any
action that would reasonably be expected to cause the Issuer Trust to become
taxable as a corporation or classified as other than a grantor trust for United
States Federal income tax purposes, (iv) incur any indebtedness for borrowed
money or issue any other debt, or (v) take or consent to any action that would
result in the placement of a Lien on any of the Trust Property. The
Administrative Trustees shall defend all claims and demands of all Persons at
any time
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claiming any Lien on any of the Trust Property adverse to the interest of the
Issuer Trust or the Holders in their capacity as Holders.
(c) In connection with the issue and sale of the Capital Securities,
the Depositor shall have the right and responsibility to assist the Issuer
Trust with respect to, or effect on behalf of the Issuer 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) the preparation by the Issuer Trust of an Offering
Circular in relation to the Capital Securities, including any
amendments thereto and the taking of any action necessary or desirable
to sell the Capital Securities in a transaction or a series of
transactions exempt from the registration requirements of the
Securities Act;
(ii) the determination of the States, or other jurisdictions,
if any, in which to take appropriate action to qualify or register for
sale all or part of the Capital Securities and the determination of
any and all such acts, other than actions that must be taken by or on
behalf of the Issuer Trust, and the advice to the Issuer Trustees of
actions they must take on behalf of the Issuer Trust, and the
preparation for execution and filing of any documents to be executed
and filed by the Issuer Trust or on behalf of the Issuer Trust, as the
Depositor deems necessary or advisable in order to comply with the
applicable laws of any such States in connection with the sale of the
Capital Securities;
(iii) the negotiation of the terms of, and the execution and
delivery of, the Purchase Agreement and the Registration Rights
Agreement;
(iv) if required pursuant to the Registration Rights
Agreement, the preparation and filing by the Issuer Trust with the
Commission and the execution on behalf of the Issuer Trust of a
registration statement on the appropriate form in relation to the
Capital Securities, including any amendments thereto and the taking of
any action necessary or desirable to sell the Capital Securities in a
transaction or a series of transactions pursuant thereto;
(v) if so determined by the Depositor, the preparation for
filing by the Issuer Trust and execution on behalf of the Issuer Trust
of 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 Capital Securities;
(vi) if so determined by the Depositor, the preparation for
filing by the Issuer Trust with the Commission and the execution on
behalf of the Issuer Trust of a registration statement on Form 8-A
relating to the registration of the Capital
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Securities under Section 12(b) or 12(g) of the Exchange Act, including
any amendments thereto; and
(vii) the taking of any other actions necessary or desirable
to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Issuer Trust and to operate the Issuer Trust so that the Issuer Trust will
not be deemed to be an "investment company" required to be registered under the
Investment Company Act, and will not be taxable as a corporation or classified
as other than a grantor trust for United States Federal income tax purposes and
so that the Debentures will be treated as indebtedness of the Depositor for
United States Federal income tax purposes. In this connection, each
Administrative Trustee and the Holder of the Common Securities are authorized
to take any action, not inconsistent with applicable law, the Certificate of
Trust or this Trust Agreement, that such Administrative Trustee or Holder of
the Common Securities determines in its discretion to be necessary or desirable
for such purposes, as long as such action does not adversely affect in any
material respect the interests of the Holders of the Outstanding Capital
Securities. In no event shall the Issuer Trustees be liable to the Issuer Trust
or the Holders for any failure to comply with this section that results from a
change in law or regulation or in the interpretation thereof.
SECTION 2.8. Assets of Trust.
The assets of the Issuer Trust shall consist of the Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered
by the Property Trustee in trust for the benefit of the Issuer Trust and the
Holders in accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and its agents 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
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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 Holders 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 of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including any Additional Distributions)
will be made on the Trust Securities at the rate and on the dates that payments
of interest (including any Additional Interest, as defined in the Indenture)
are made on the Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative,
and shall accumulate whether or not there are funds of the Issuer
Trust available for the payment of Distributions. Distributions shall
accumulate from January 29, 1997, and, except in the event (and to the
extent) that the Depositor exercises its right to defer the payment of
interest on the Debentures pursuant to the Indenture, shall be payable
semi-annually in arrears on January 15 and July 15 of each year,
commencing on July 15, 1997. If any date on which a Distribution is
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 that is a Business Day (and without any interest or other payment
in respect of any such delay), with the same force and effect as if
made on the date on which such payment was originally payable (each
date on which distributions are payable in accordance with this
Section 4.1(a), a "Distribution Date").
(ii) The Trust Securities shall be entitled to Distributions
payable at a rate, not including Additional Distributions or Special
Distributions, of 8.92% per annum of the Liquidation Amount of the
Trust Securities. The amount of Distributions payable for any period
less than a full Distribution period shall be computed on the basis of
a 360-day year of twelve 30-day months and the actual number of days
elapsed in a partial month in a period. Distributions payable for each
full Distribution period will be computed by dividing the rate per
annum by two. The
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amount of Distributions payable for any period shall include any
Additional Distributions and Special Distributions in respect of such
period.
(iii) Distributions on the Trust Securities shall be made by
the Property Trustee from the Payment Account and shall be payable on
each Distribution Date only to the extent that the Issuer Trust has
funds then on hand and available in the Payment Account for the
payment of such Distributions.
(iv) The Depositor shall promptly notify the Issuer Trustees
of the occurrence and the termination of any Registration Default.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be at the close of business on the fifteenth
day (whether or not a Business Day) next preceding the relevant Distribution
Date.
SECTION 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of
the Debentures, the Issuer 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 Security Register. All
notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the
estimate of the Redemption Price provided pursuant to (and as defined
in) the Indenture together with a statement that it is an estimate and
that the actual Redemption Price will be calculated on the third
Business Day prior to the Redemption Date (and, if an estimate is
provided, that a further notice shall be sent of the actual Redemption
Price on the date on which such Redemption Price is calculated);
(iii) the CUSIP number or CUSIP numbers of the Capital
Securities affected;
(iv) if less than all the Outstanding Trust Securities are to
be redeemed, the identification and the aggregate Liquidation Amount
of the particular Trust Securities to be redeemed;
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(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 accumulate on and after
such date, except as provided in Section 4.2(d) below; and
(vi) the place or places where the Trust Securities are to be
surrendered for the payment of the Redemption Price.
The Issuer Trust in issuing the Trust Securities may use "CUSIP" or
"private placement" numbers (if then generally in use), and, if so, the
Property Trustee shall indicate the "CUSIP" or "private placement" numbers of
the Trust Securities in notices of redemption and related materials as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Trust Securities or as contained in any notice of redemption and related
materials.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the
extent that the Issuer Trust has funds then on hand and available in the
Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, with
respect to Book-Entry Capital Securities, irrevocably deposit with the Clearing
Agency for such Book-Entry Capital Securities, to the extent available
therefor, funds sufficient to pay the applicable Redemption Price and will give
such Clearing Agency irrevocable instructions and authority to pay the
Redemption Price to the Holders of the Capital Securities. With respect to
Capital Securities that are not Book-Entry Capital Securities, the Property
Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying
Agent or Paying Agents, to the extent available therefor, funds sufficient to
pay the applicable Redemption Price and will give the Paying Agent or Paying
Agents irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Capital Securities upon surrender of their Capital
Securities Certificates. Notwithstanding the foregoing, Distributions payable
on or prior to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Securities Register 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
Holders holding Trust Securities so called for redemption will cease, except
the right of such Holders to receive the Redemption Price and any Distribution
payable in respect of the Trust Securities on or prior to the Redemption Date,
but without interest, and such Securities will cease to
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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 will be made on the next succeeding day that is a Business Day
(without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will
be made on the immediately preceding Business Day, in 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 any Trust Securities called for redemption is
improperly withheld or refused and not paid either by the Issuer Trust or by
the Depositor pursuant to the Guarantee Agreement, Distributions on such Trust
Securities will continue to accumulate, as set forth in Section 4.1, from the
Redemption Date originally established by the Issuer Trust for such Trust
Securities to the date such Redemption Price is actually paid, in which case
the actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
(e) Subject to Section 4.3(a), 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 pro
rata to the Common Securities and the Capital Securities based upon the
relative Liquidation Amounts of such classes. The particular Capital Securities
to be redeemed shall be selected on a pro rata basis based upon their
respective Liquidation Amounts not more than 60 days prior to the Redemption
Date by the Property Trustee from the Outstanding Capital Securities not
previously called for redemption, provided that so long as the Capital
Securities are in book- entry-only form, such selection shall be made in
accordance with the customary procedures for the Clearing Agency for the
Capital Securities, and provided further that, after giving effect to such
redemption, no Holder shall hold Capital Securities with an aggregate
Liquidation Amount of less than $100,000. The Property Trustee shall promptly
notify the Securities Registrar in writing of the Capital Securities selected
for redemption and, in the case of any Capital Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate, in the case of
any Capital Securities redeemed or to be redeemed only in part, to the portion
of the aggregate Liquidation Amount of Capital Securities that has been or is
to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including any Additional Distributions)
on, the Redemption Price of, and the Liquidation Distribution in respect of the
Trust Securities, as applicable, shall be made, subject to Section 4.2(e), pro
rata among the Common Securities and the Capital Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date, Redemption Date or Liquidation Date any Event of Default
resulting from a Debenture Event of Default specified in Section 5.1(1) or
5.1(2) of the Indenture shall have occurred and be continuing, no payment of
any Distribution (including any Additional Distributions and Special
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Distributions) on, Redemption Price of, or Liquidation Distribution in respect
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
any Additional Distributions and Special Distributions) on all Outstanding
Capital Securities for all Distribution periods terminating on or prior
thereto, or in the case of payment of the Redemption Price the full amount of
such Redemption Price on all Outstanding Capital Securities then called for
redemption, or in the case of payment of the Liquidation Distribution the full
amount of such Liquidation Distribution on all Outstanding Capital Securities,
shall have been made or provided for, and all funds immediately available to
the Property Trustee shall first be applied to the payment in full in cash of
all Distributions (including any Additional Distributions and Special
Distributions) on, the Redemption Price of or the Liquidation Distribution in
respect of the Capital Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of the Common Securities shall
have no right to act with respect to any such Event of Default under this Trust
Agreement until the effect of all such Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated. Until all
such Events of Default under this Trust Agreement with respect to the Capital
Securities have been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders of the Capital Securities and
not on behalf of the Holder of the Common Securities, and only the Holders of
the Capital Securities will have the right to direct the Property Trustee to
act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including any Additional and Special
Distributions) or of the Redemption Price, Liquidation Amount or any other
amounts in respect of the Capital Securities shall be made by check mailed to
the address of the Person entitled thereto as such address shall appear on the
Securities Register or, if the Capital Securities are held by a Clearing
Agency, such Distributions shall be made to the Clearing Agency in immediately
available funds. 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 all the Common Securities.
SECTION 4.5. Tax Returns and Reports.
The Administrative Trustees 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 Issuer Trust. In this regard, the Administrative Trustees shall (a)
prepare and file (or cause to be prepared and filed) all Internal Revenue
Service forms required to be filed in respect of the Issuer Trust in each
taxable year of the Issuer Trust, and (b) prepare and furnish (or cause to be
prepared and
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furnished) to each Holder all Internal Revenue Service forms required to be
provided by the Issuer Trust. The Administrative Trustees shall provide the
Depositor and the Property Trustee with a copy of all such returns and reports
promptly after such filing or furnishing. The Issuer Trustees shall comply with
United States Federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to Holders
under the Trust Securities.
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust.
Upon receipt under the Debentures of Additional Sums, the Property
Trustee shall promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Issuer Trust by
the United States or any other taxing authority.
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Capital Securities (or
any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (or Owner) has directly received pursuant to
Section 5.8 of the Indenture or Section 5.13 of this Trust Agreement.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership.
Upon the formation of the Issuer Trust and the contribution by the
Depositor pursuant to Section 2.3 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 Issuer Trust.
SECTION 5.2. The Trust Securities Certificates.
(a) The Capital Securities Certificates shall be issued in fully
registered form in minimum denominations of $100,000 Liquidation Amount (and in
blocks of at least 100 Capital Securities) and integral multiples of $1,000 in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $1,000 Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of the Issuer Trust
by manual signature of at least one Administrative Trustee. Trust Securities
Certificates bearing the manual signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Issuer Trust, shall be validly issued and entitled to the benefits of this
Trust Agreement, notwithstanding that such
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individuals or any of them shall have ceased to be so authorized prior to the
delivery of such Trust Securities Certificates or did not hold such offices at
the date of delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Holder, and shall be entitled to
the rights and subject to the obligations of a Holder hereunder, upon due
registration of such Trust Securities Certificate in such transferee's name
pursuant to Section 5.5.
(b) Upon their original issuance, Capital Securities Certificates
representing Rule 144A Capital Securities shall be issued in the form of one or
more Book-Entry Capital Securities Certificates registered in the name of DTC,
as Clearing Agency, or its nominee and deposited with DTC or a custodian for
DTC for credit by DTC to the respective accounts of the Owners thereof (or such
other accounts as they may direct).
(c) Upon their original issuance, Capital Securities Certificates
representing IAI Capital Securities shall not be issued in the form of a
Book-Entry Capital Securities Certificate or in any other form intended to
facilitate book-entry trading in beneficial interests in such Capital
Securities.
(d) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.3. Execution and Delivery of Trust Securities Certificates.
At the Time of Delivery, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Issuer Trust and
delivered to or upon the written order of the Depositor, executed by an
authorized officer thereof, without further corporate action by the Depositor,
in authorized denominations.
SECTION 5.4. Book-Entry Capital Securities.
(a) Each Book-Entry Capital Securities Certificate issued under this
Trust Agreement shall be registered in the name of the Clearing Agency or a
nominee thereof and delivered to such Clearing Agency or a nominee thereof or
custodian therefor, and each such Book-Entry Capital Securities Certificate
shall constitute a single Capital Securities Certificate for all purposes of
this Agreement.
(b) Notwithstanding any other provision in this Trust Agreement, no
Book-Entry Capital Securities Certificate may be exchanged in whole or in part
for Capital Securities Certificates registered, and no transfer of a Book-Entry
Capital Securities Certificate in whole or in part may be registered, in the
name of any Person other than the Clearing Agency or a nominee thereof unless
(i) the Clearing Agency advises the Property Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
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responsibilities with respect to the Book-Entry Capital Securities
Certificates, and the Property Trustee is unable to locate a qualified
successor, (ii) the Issuer Trust at its option advises the Clearing Agency in
writing that it elects to terminate the book-entry system through the Clearing
Agency, or (iii) a Debenture Event of Default has occurred and is continuing.
Upon the occurrence of any event specified in clause (i), (ii) or (iii) above,
the Property Trustee shall notify the Clearing Agency and instruct the Clearing
Agency to notify all Owners of Book-Entry Capital Securities, the Delaware
Trustee and the Administrative Trustees of the occurrence of such event and of
the availability of the Definitive Capital Securities Certificates to Owners of
the Capital Securities requesting the same; provided, however, that no
Definitive Capital Securities Certificate shall be issued in an amount
representing less than 100 Capital Securities.
(c) If any Book-Entry Capital Securities Certificate is to be
exchanged for other Capital Securities Certificates or canceled in whole, it
shall be surrendered by or on behalf of the Clearing Agency or its nominee for
exchange or cancellation as provided in this Article V. If any Book-Entry
Capital Securities Certificate is to be exchanged for other Capital Securities
Certificates or canceled in part, or if any other Capital Securities
Certificate is to be exchanged in whole or in part for Book-Entry Capital
Securities represented by a Book-Entry Capital Securities Certificate, then
either (i) such Book-Entry Capital Securities Certificate shall be so
surrendered for exchange or cancellation as provided in this Article V or (ii)
the aggregate Liquidation Amount represented by such Book-Entry Capital
Securities Certificate shall be reduced, subject to Section 5.2, or increased
by an amount equal to that portion of the Liquidation Amount represented by the
Book-Entry Capital Securities Certificate to be so exchanged or cancelled, or
equal to that portion of the Liquidation Amount represented by such other
Capital Securities Certificates to be so exchanged for Book-Entry Capital
Securities represented thereby, as the case may be, by means of an appropriate
adjustment made on the records of the Securities Registrar with notice to the
Property Trustee, whereupon the Property Trustee, in accordance with the
Applicable Procedures, shall instruct the Clearing Agency or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Book-Entry Capital Securities Certificate by the
Clearing Agency, accompanied by registration instructions, the Administrative
Trustees, or any one of them, shall, subject to Section 5.5(b) and as otherwise
provided in this Article V, execute the Definitive Capital Securities
Certificates issuable in exchange for such Book-Entry Capital Securities
Certificate (or any portion thereof) in accordance with the instructions of the
Clearing Agency; provided, however, that no Definitive Capital Securities
Certificate shall be issued in an amount representing less than 100 Capital
Securities. None of the Securities Registrar or the Issuer 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. The Definitive
Capital Securities Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
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(d) Every Capital Securities Certificate executed and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Book-Entry
Capital Securities Certificate or any portion thereof, whether pursuant to this
Article V or Section 4.2 or otherwise, shall be executed and delivered in the
form of, and shall be, a Book-Entry Capital Securities Certificate, unless such
Capital Securities Certificate is registered in the name of a Person other than
the Clearing Agency or a nominee thereof.
(e) The Clearing Agency or its nominee, as registered owner of a
Book-Entry Capital Securities Certificate, shall be the Holder of such
Book-Entry Capital Securities Certificate for all purposes under this Agreement
and the Capital Securities, and Owners with respect to a Book-Entry Capital
Securities Certificate shall hold such interests pursuant to the Applicable
Procedures. The Securities Registrar and the Issuer Trustees shall be entitled
to deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Capital Securities Certificates (including the
payment of the Liquidation Amount of and Distributions on the Book-Entry
Capital Securities represented thereby and the giving of instructions or
directions by or to Owners of Book-Entry Capital Securities represented
thereby) as the sole Holder of the Book-Entry Capital Securities represented
thereby and shall have no obligations to the Owners thereof. None of the
Depositor, the Issuer Trustees nor the Securities Registrar shall have any
liability in respect of any transfers effected by the Clearing Agency.
(f) The rights of the Owners of the Book-Entry Capital Securities
shall be exercised only through the Clearing Agency and shall be limited to
those established by law, the Applicable Procedures and agreements between such
Owners and the Clearing Agency and/or the Clearing Agency Participants.
SECTION 5.5. Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges; Securities Act Legends.
(a) The Property Trustee shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 5.9, a register or registers (the
"Securities Register") in which the registrar and transfer agent with respect
to the Trust Securities (the "Securities Registrar"), subject to such
reasonable regulations as it may prescribe, shall provide for the registration
of Capital Securities Certificates and (subject to Section 5.11) Common
Securities Certificates and of transfers and exchanges of Capital Securities
Certificates as herein provided. The Property Trustee is hereby appointed
Securities Registrar for the purpose of registering Capital Securities
Certificates and (subject to Section 5.11) Common Securities and transfers and
exchanges thereof as provided herein.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.9, the
Administrative Trustees or any one of them shall execute and deliver to the
Property Trustee, and the Property Trustee shall deliver, in the name of the
designated transferee or transferees, one or more new
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Capital Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount and bearing such restrictive legends as may be required by
this Agreement, dated the date of execution by such Administrative Trustee or
Trustees; provided that no Holder may transfer any Capital Security if giving
effect to such transfer would cause any Holder to hold less than $100,000
aggregate Liquidation Amount of Capital Securities. Any purported transfer
prohibited by the preceding proviso shall be null and void and of no force or
effect and the purported transferee of the affected Capital Securities shall be
deemed to have no interest whatsoever in such Capital Securities.
At the option of the Holder, Capital Securities Certificates may be
exchanged for other Capital Securities Certificates of the same series of any
authorized denominations, of like tenor and aggregate Liquidation Amount,
bearing such restrictive legends as may be required by this Agreement and
bearing a number not contemporaneously Outstanding, upon surrender of the
Capital Securities Certificates to be exchanged at such office or agency.
Whenever any Capital Securities Certificates are so surrendered for exchange,
the Administrative Trustees or any one of them shall execute and deliver to the
Property Trustee, and the Property Trustee shall deliver, the Capital
Securities Certificates that the Holder making the exchange is entitled to
receive.
All Capital Securities issued upon any transfer or exchange of Capital
Securities shall evidence the same interest in the assets of the Issuer Trust,
and entitled to the same benefits under this Agreement, as the Capital
Securities surrendered upon such transfer or exchange.
The Securities Registrar shall not be required, (i) to issue, register
the transfer of or exchange any Capital Security during a period beginning at
the opening of business 15 days before the day of selection for redemption of
such Capital Securities pursuant to Article IV and ending at the close of
business on the day of mailing of the notice of redemption, or (ii) to register
the transfer of or exchange any Capital Security so selected for redemption in
whole or in part, except, in the case of any such Capital Security to be
redeemed in part, any portion thereof not to be redeemed.
Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to an Administrative
Trustee and the Securities Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Capital Securities
Certificate surrendered for registration of transfer or exchange shall be
cancelled and subsequently disposed of by the Property Trustee in accordance
with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities Certificates, but the Issuer Trust may require
payment of a sum sufficient
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to cover any tax or governmental charge that may be imposed in connection with
any transfer or exchange of Capital Securities Certificates.
(b) Notwithstanding any other provision of this Trust Agreement,
transfers and exchanges of Capital Securities Certificates and Book-Entry
Capital Securities shall be made only in accordance with this Section 5.5(b).
(i) Non-Book-Entry Capital Securities Certificate to
Book-Entry Capital Securities Certificate. If the Holder of a Capital
Securities Certificate (other than a Book-Entry Capital Securities
Certificate) wishes at any time to transfer all or any portion of such
Capital Securities Certificate to a Person who wishes to take delivery
thereof in the form of a beneficial interest in a Book-Entry Capital
Securities Certificate, such transfer may be effected only in
accordance with the provisions of this Clause (b)(i) and subject to
the Applicable Procedures. Upon receipt by the Securities Registrar of
(A) such Capital Securities Certificate as provided in Section 5.5(a)
and instructions satisfactory to the Securities Registrar directing
that a specified number of Book-Entry Capital Securities to be
represented by such Book-Entry Capital Securities Certificate not
greater than the number of Capital Securities represented by such
Capital Securities Certificate be credited to a specified Clearing
Agency Participant's account and (B) if the Capital Securities
Certificate to be transferred evidences Restricted Capital Securities,
a Restricted Securities Certificate duly executed by such Holder or
such Holder's attorney duly authorized in writing, then the Securities
Registrar shall cancel such Capital Securities Certificate (and issue
a new Capital Securities Certificate in respect of any untransferred
portion thereof) as provided in Section 5.5(a) and increase the
aggregate Liquidation Amount of the Book-Entry Capital Securities
Certificate by the Liquidation Amount of such Capital Securities so
transferred as provided in Section 5.4(c).
(ii) Non-Book-Entry Capital Securities Certificate to
Non-Book-Entry Capital Securities Certificate. A Capital Securities
Certificate that is not a Book-Entry Capital Securities Certificate
may be transferred, in whole or in part, to a Person who takes
delivery in the form of another Capital Securities Certificate that is
not a Book-Entry Capital Securities Certificate as provided in Section
5.5(a), provided that if the Capital Securities Certificate to be
transferred evidences Restricted Capital Securities, then the
Securities Registrar shall have received a Restricted Securities
Certificate duly executed by the transferor Holder or such Holder's
attorney duly authorized in writing.
(iii) Book-Entry Capital Securities Certificate to
Non-Book-Entry Capital Securities Certificate. A beneficial interest
in a Book-Entry Capital Securities Certificate may be exchanged for a
Capital Securities Certificate that is not a Book-Entry Capital
Securities Certificate as provided in Section 5.4.
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(iv) Certain Initial Transfers of Non-Book-Entry Capital
Securities Certificates. In the case of Capital Securities
Certificates initially issued other than in global form, an initial
transfer or exchange of such Capital Securities Certificates that does
not involve any change in beneficial ownership may be made to an
Institutional Accredited Investor or Investors as if such transfer or
exchange were not an initial transfer or exchange, provided that
written certification shall be provided by the transferor and
transferee of such Capital Securities to the Securities Registrar that
such transfer or exchange does not involve a change in beneficial
ownership.
(v) Limitations Relating to Size of Blocks. Notwithstanding
any other provision of this Trust Agreement, Capital Securities may be
transferred or exchanged only in blocks having a Liquidation Amount of
not less than $100,000, and only if, following such transfer or
exchange, each Holder would hold Capital Securities with an aggregate
Liquidation Amount of not less than $100,000. Any transfer, exchange
or other disposition of Capital Securities in contravention of this
Section 5.5(b)(v) shall be deemed to be void and of no legal effect
whatsoever, any such transferee shall be deemed not to be the Holder
or Owner of such Capital Security for any purpose, including but not
limited to the receipt of Distributions on such Capital Securities,
and such transferee shall be deemed to have no interest whatsoever in
such Capital Securities.
(c) Except as set forth below, all Capital Securities Certificates
shall bear a Restricted Capital Securities Legend:
(i) subject to the following Clauses of this Section 5.5(c), a
Capital Securities Certificate or any portion thereof that is
exchanged, upon transfer or otherwise, for a Book-Entry Capital
Securities Certificate or any portion thereof shall bear the
Restricted Capital Securities Legend;
(ii) subject to the following Clauses of this Section 5.5(c),
a new Capital Securities Certificate that is not a Book-Entry Capital
Securities Certificate and is issued in exchange for another Capital
Securities Certificate (including a Book-Entry Capital Securities
Certificate) or any portion thereof, upon transfer or otherwise, shall
bear a Restricted Capital Securities Legend;
(iii) a new Capital Securities Certificate that does not bear
a Restricted Capital Securities Legend may be issued in exchange for
or in lieu of a Capital Securities Certificate or any portion thereof
that bears such a legend if, in the Depositor's sole judgment,
placing such a legend upon such new Capital Securities Certificate is
not and will not be necessary to ensure compliance with the
registration requirements of the Securities Act, and the
Administrative Trustees, at the direction of the Depositor, shall
execute and deliver such a new Capital Securities Certificate as
provided in this Article V; and
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(iv) notwithstanding the foregoing provisions of this Section
5.5(c), a Successor Capital Securities Certificate of a Capital
Securities Certificate that does not bear a Restricted Capital
Securities Legend shall not bear such form of legend unless in the
Depositor's sole judgement such Successor Capital Securities
Certificate is a "restricted security" within the meaning of Rule 144
under the Securities Act, in which case the Administrative Trustees,
at the direction of the Depositor, shall execute and deliver a new
Capital Securities Certificate bearing a Restricted Capital Securities
Legend in exchange for such Successor Capital Securities Certificate
as provided in this Article V.
(d) The Depositor or an Administrative Trustee shall inform the
Property Trustee in writing of the effective date of any registration statement
registering the Capital Securities under the Securities Act and shall notify
the Property Trustee at any time when prospectuses may not be delivered with
respect to Capital Securities to be sold pursuant to such registration
statement. The Property Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the aforementioned
registration statement.
(e) Any purchaser or Holder of any Capital Securities or any interest
therein will be deemed to have represented by its purchase and holding thereof
that it either (i) is not a Plan or a Plan Asset Entity and is not purchasing
such Capital Securities on behalf of or with "plan assets" of any Plan, or (ii)
is eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38,
90-1 or 84-14 or another applicable exemption with respect to such purchase or
holding. The Securities Registrar may, and if the Depositor shall so request,
the Securities Registrar shall, before registering for transfer or exchange any
Capital Securities Certificates as provided in Sections 5.2, 5.4 or 5.5 of this
Trust Agreement, (A) require the purchaser or Holder of such Capital Securities
Certificates to confirm that it either (x) is not a Plan, a Plan Asset Entity
or a Person investing "plan assets" of any Plan or (y) is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, and
(B) if such purchaser or Holder does not provide such confirmation, require an
Opinion of Counsel or other evidence satisfactory to the Depositor of the
availability to such purchaser or Holder of another applicable exemption with
respect to such purchase or holding.
SECTION 5.6. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate, and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Issuer Trust shall execute and
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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 5.6, 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 5.6 shall constitute conclusive evidence of an
undivided beneficial interest in the assets of the Issuer Trust corresponding
to that evidenced by the lost, stolen or destroyed Trust Securities
Certificate, as if originally issued, whether or not the lost, stolen or
destroyed Trust Securities Certificate shall be found at any time.
SECTION 5.7. Persons Deemed Holders.
The Issuer Trustees and the Securities Registrar shall each 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 and for all other purposes whatsoever,
and none of the Issuer Trustees and the Securities Registrar shall be bound by
any notice to the contrary.
SECTION 5.8. Access to List of Holders' Names and Addresses.
Each Holder and each Owner shall be deemed to have agreed not to hold
the Depositor or the Issuer Trustees accountable by reason of the disclosure of
its name and address, regardless of the source from which such information was
derived.
SECTION 5.9. Maintenance of Office or Agency.
The Administrative Trustees shall maintain an office or offices or
agency or agencies where Capital Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Issuer Trustees in respect of the Trust Securities Certificates may be
served. The Administrative Trustees initially designate The Colonial BancGroup,
Inc., One Commerce Street, Montgomery, Alabama 36104 as its office and agency
for such purposes. The Administrative Trustees shall give prompt written notice
to the Depositor, the Property Trustee and to the Holders of any change in the
location of the Securities Register or any such office or agency.
SECTION 5.10. Appointment of Paying Agents.
The Paying Agent or Agents shall make Distributions to Holders from
the Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Administrative
Trustees may revoke such power and remove the Paying
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Agent in its sole discretion. The Paying Agent shall initially be the Bank and
any co-paying agent chosen by the Property Trustee and 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 Property Trustee. If the Bank shall no
longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company) that is reasonably
acceptable to the Depositor to act as Paying Agent. Such successor Paying Agent
or any additional Paying Agent shall execute and deliver to the Issuer Trustees
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Issuer 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 Holders in trust for the benefit of the Holders entitled
thereto until such sums shall be paid to such Holders. 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 8.1, 8.3 and 8.6 herein shall
apply to the Bank also in its role as Paying Agent, for so long as the Bank
shall act as Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Agreement to the Paying Agent
shall include any co-paying agent unless the context requires otherwise.
SECTION 5.11. Ownership of Common Securities by Depositor.
At the Time of Delivery, the Depositor shall acquire, and thereafter
shall retain, beneficial and record ownership of the Common Securities. Neither
the Depositor nor any successor Holder of the Common Securities may transfer
less than all the Common Securities, and the Depositor or any such successor
Holder may transfer the Common Securities only (i) in connection with a
consolidation or merger of the Depositor into another corporation, or any
conveyance, transfer or lease by the Depositor of its properties and assets
substantially as an entirety to any Person, pursuant to Section 8.1 of the
Indenture, or (ii) to the Depositor or an Affiliate of the Depositor in
compliance with applicable law (including the Securities Act of 1933, as
amended, and applicable state securities and blue sky laws). To the fullest
extent permitted by law, any attempted transfer of the Common Securities other
than as set forth in the next proceeding sentence shall be void. The
Administrative Trustees shall cause each Common Securities Certificate issued
to the Depositor to contain a legend stating substantially "THIS CERTIFICATE IS
NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN
COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT."
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Holders is
required under this Trust Agreement, for so long as Capital Securities are
represented by a Book-Entry
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Capital Securities Certificate, the Issuer Trustees shall give all such notices
and communications specified herein to be given to the Clearing Agency, and
shall have no obligations to the Owners.
SECTION 5.13. Rights of Holders; Waivers of Past Defaults.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Holders shall not have any right or title therein other than the undivided
beneficial interest in the assets of the Issuer 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 Issuer 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 similar rights and when issued and
delivered to Holders against payment of the purchase price therefor will be
fully paid and nonassessable by the Issuer Trust. The Holders of the Trust
Securities, in their capacities as such, 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.
(b) For so long as any Capital Securities remain Outstanding, if, upon
a Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Capital Securities then
Outstanding shall have the right to make such declaration by a notice in
writing to the Property Trustee, the Depositor and the Debenture Trustee.
At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided in the
Indenture, if the Property Trustee fails to annul any such declaration and
waive such default, the Holders of at least a Majority in Liquidation Amount of
the Capital Securities, by written notice to the Property Trustee, the
Depositor and the Debenture Trustee, may rescind and annul such declaration and
its consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay
(A) all overdue installments of interest on all of
the Debentures,
(B) any accrued Additional Interest on all of the
Debentures,
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(C) the principal of (and premium, if any, on) any
Debentures that have become due otherwise than by such
declaration of acceleration and interest and Additional
Interest thereon at the rate borne by the Debentures, and
(D) all sums paid or advanced by the Debenture
Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture Trustee
and the Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Debentures,
other than the non-payment of the principal of the Debentures that has
become due solely by such acceleration, have been cured or waived as
provided in Section 5.13 of the Indenture.
The Holders of at least a Majority in Liquidation Amount of the
Capital Securities may, on behalf of the Holders of all the Trust Securities,
waive any past default or Event of Default under the Indenture, except a
default or Event of Default in the payment of principal or interest (unless
such default or Event of Default has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default or
Event of Default in respect of a covenant or provision that under the Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Debenture. No such rescission shall affect any subsequent default
or impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of any part of
the Capital Securities, a record date shall be established for determining
Holders of Outstanding Capital Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice that has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.13(b).
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(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Indenture, upon a Debenture Event of Default specified in
Section 5.1(1) or 5.1(2) of the Indenture, any Holder of Capital Securities
shall have the right to institute a proceeding directly against the Depositor,
pursuant to Section 5.8 of the Indenture, for enforcement of payment to such
Holder of any amounts payable in respect of Debentures having an aggregate
principal amount equal to the aggregate Liquidation Amount of the Capital
Securities of such Holder (a "Direct Action"). Except as set forth in Section
5.13(b) and this Section 5.13(c), the Holders of Capital Securities shall have
no right to exercise directly any right or remedy available to the holders of,
or in respect of, the Debentures.
(d) Except as otherwise provided in paragraphs (a), (b) and (c) of
this Section 5.13, the Holders of at least a Majority in Liquidation Amount of
the Capital Securities may, on behalf of the Holders of all the Trust
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist,
and any default or Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Capital Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Issuer 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 Holders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee on
behalf of the Issuer Trust, the Property Trustee shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or execute any trust or power conferred on the Property
Trustee with respect to the Debentures, (ii) waive any past default that may be
waived under Section 5.13 of the Indenture, (iii) exercise any right to rescind
or annul a declaration that the principal of all the Debentures shall be due
and payable, or (iv) consent to any amendment, modification or termination of
the Indenture or the Debentures, where such consent shall be required, without,
in each case, obtaining the prior approval of the Holders of at least a
Majority in Liquidation Amount of the Capital Securities, provided, however,
that where a consent under
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the Indenture would require the consent of each Holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior written consent of each Holder of Capital Securities. The Property
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Capital Securities, except by a subsequent vote of the
Holders of the Capital Securities. The Property Trustee shall notify all
Holders of the Capital Securities of any notice of default received with
respect to the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Capital Securities, prior to taking any of the foregoing
actions, the Issuer Trustees shall, at the expense of the Depositor, obtain an
Opinion of Counsel experienced in such matters to the effect that such action
shall not cause the Issuer Trust to be taxable as a corporation or classified
as other than a grantor trust for United States Federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Issuer Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Capital Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Issuer Trust, other than pursuant to the terms of this Trust Agreement,
then the Holders of Outstanding Capital Securities as a class will be entitled
to vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Issuer Trust to be
taxable as a corporation or classified as other than a grantor trust for United
States Federal income tax purposes.
SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Holders of the Capital Securities,
stating the time, place and purpose of the meeting, shall be given by the
Property Trustee pursuant to Section 10.8 to each Holder of Capital Securities,
at such Holder's registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the
meeting. Any adjourned meeting may be held as adjourned without further notice.
SECTION 6.3. Meetings of Holders of the Capital Securities.
No annual meeting of Holders is required to be held. The
Administrative Trustees, however, shall call a meeting of the Holders of the
Capital Securities to vote on any matter upon the written request of the
Holders of at least 25% in aggregate Liquidation Amount of the Outstanding
Capital Securities and the Administrative Trustees or the Property Trustee may,
at any time in their discretion, call a meeting of the Holders of the Capital
Securities to vote on any matters as to which such Holders are entitled to
vote.
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The Holders of at least a Majority in Liquidation Amount of the
Capital Securities, present in person or by proxy, shall constitute a quorum at
any meeting of the Holders of the Capital Securities.
If a quorum is present at a meeting, an affirmative vote by the
Holders present, in person or by proxy, holding Capital Securities representing
at least a majority of the aggregate Liquidation Amount of the Capital
Securities held by the Holders present, either in person or by proxy, at such
meeting shall constitute the action of the Holders of the Capital Securities,
unless this Trust Agreement requires a greater number of affirmative votes.
SECTION 6.4. Voting Rights.
Holders shall be entitled to one vote for each $1,000 of Liquidation
Amount represented by their Outstanding Trust Securities in respect of any
matter as to which such Holders are entitled to vote.
SECTION 6.5. Proxies, etc.
At any meeting of Holders, any Holder entitled to vote thereat 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 Issuer 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 Holders 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 Holder shall be deemed
valid unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. No proxy shall be valid more than
three years after its date of execution.
SECTION 6.6. Holder Action by Written Consent.
Any action that may be taken by Holders of Capital Securities at a
meeting may be taken without a meeting if Holders holding at least a Majority
in Liquidation Amount of the Capital Securities entitled to vote in respect of
such action (or such larger proportion thereof as shall be required by any
other provision of this Trust Agreement) shall consent to the action in
writing. Any action that may be taken by the Holder of all the Common
Securities may be taken if such Holder shall consent to the action in writing.
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SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Holders 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 Holders or the payment of a
distribution or other action, as the case may be, as a record date for the
determination of the identity of the Holders of record for such purposes.
SECTION 6.8. Acts of Holders.
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 Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as otherwise expressly provided herein,
such action shall become effective when such instrument or instruments are
delivered to an Administrative Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Trust Agreement and (subject to
Section 8.1) conclusive in favor of the Issuer Trustees, if made in the manner
provided in this Section 6.8.
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 such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's 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 that any Issuer Trustee receiving
the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Trust Security shall bind every future Holder
of the same Trust Security and the Holder 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 Issuer
Trustees, the Depositor or the Issuer Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
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Without limiting the foregoing, a Holder 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 among the Holders or the Issuer Trustees
with respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such Holder
or Issuer Trustee under this Article VI, then the determination of such matter
by the Property Trustee shall be conclusive with respect to such matter.
SECTION 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Issuer Trust shall be open to inspection by Holders
during normal business hours for any purpose reasonably related to such
Holder's interest as a Holder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Holders that:
(a) the Property Trustee is a banking corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) the Delaware Trustee is a banking corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all
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necessary action to authorize the execution, delivery and performance by it of
this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and the Delaware Trustee and constitutes the
valid and legally binding agreement of each of the Property Trustee and the
Delaware Trustee enforceable against each of them in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement
has been duly authorized by all necessary corporate or other action on the part
of the Property Trustee and the Delaware Trustee and does not require any
approval of stockholders of the Property Trustee and the Delaware Trustee and
such execution, delivery and performance will not (i) violate the Charter or
By-laws of the Property Trustee or the Delaware Trustee, (ii) violate any
provision of, or constitute, with or without notice or lapse of time, a default
under, or result in the creation or imposition of, any Lien on any properties
included in the Trust Property pursuant to the provisions of, any indenture,
mortgage, credit agreement, license or other agreement or instrument to which
the Property Trustee or the Delaware Trustee is a party or by which it is
bound, or (iii) violate any law, governmental rule or regulation of the United
States or the State of Delaware, as the case may be, governing the banking,
trust or general powers of the Property Trustee or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Property Trustee or the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein requires the consent or approval
of, the giving of notice to, the registration with or the taking of any other
action with respect to any governmental authority or agency under any existing
law of the United States or the State of Delaware governing the banking, trust
or general powers of the Property Trustee or the Delaware Trustee, as the case
may be; and
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal that,
individually or in the aggregate, would materially and adversely affect the
Issuer Trust or would question the right, power and authority of the Property
Trustee or the Delaware Trustee, as the case may be, to enter into or perform
its obligations as one of the Issuer Trustees under this Trust Agreement.
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SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Holders that:
(a) the Trust Securities Certificates issued at the Time of Delivery
on behalf of the Issuer Trust have been duly authorized and will have been duly
and validly executed, issued and delivered by the Issuer Trustees pursuant to
the terms and provisions of, and in accordance with the requirements of, this
Trust Agreement and the Holders will be, as of such date, entitled to the
benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Issuer Trust (or the Issuer Trustees on behalf of the Issuer Trust) under
the laws of the State of Delaware or any political subdivision thereof in
connection with the execution, delivery and performance by either Issuer
Trustee of this Trust Agreement.
ARTICLE VIII
THE ISSUER TRUSTEES; PAYING AGENTS
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Issuer Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, but subject to Section
8.1(c), no provision of this Trust Agreement shall require any of the Issuer
Trustees to expend or risk its or their own funds or otherwise incur any
financial liability in the performance of any of its or their duties hereunder,
or in the exercise of any of its or their rights or powers, if it or 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 it or
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 Issuer Trustees shall be subject to the provisions
of this Section 8.1. Nothing in this Trust Agreement shall be construed to
release an Administrative Trustee from liability for his or her own gross
negligent action, his or her own gross negligent failure to act, or his or her
own wilful misconduct. To the extent that, at law or in equity, an Issuer
Trustee has duties and liabilities relating to the Issuer Trust or to the
Holders, such Issuer Trustee shall not be liable to the Issuer Trust or to any
Holder for such Issuer Trustee's good faith reliance on the provisions of this
Trust Agreement. The provisions of this Trust Agreement, to the extent that
they restrict the duties and liabilities of the Issuer Trustees otherwise
existing at law or in equity, are agreed by the Depositor and the Holders to
replace such other duties and liabilities of the Issuer Trustees.
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(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms hereof.
Each Holder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the Issuer
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 8.1(b) does not limit the liability of the Issuer
Trustees expressly set forth elsewhere in this Trust Agreement or, in the case
of the Property Trustee, in the Trust Indenture Act.
(c) If an Event of Default has occurred and is continuing, the
Property Trustee shall enforce this Trust Agreement for the benefit of the
Holders.
(d) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement (including pursuant to Section 10.10), and no implied
covenants shall be read into this Trust Agreement against the Property Trustee.
If an Event of Default has occurred (that has not been cured or waived pursuant
to Section 5.13), the Property Trustee shall exercise such of the rights and
powers vested in it by this Trust 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.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee or the Delaware Trustee from liability for its own
negligent action, its own negligent failure to act, or its own wilful
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 Property
Trustee shall be determined solely by the express provisions
of this Trust Agreement (including pursuant to Section 10.10),
and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Trust Agreement (including pursuant to
Section 10.10); and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property 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 Property Trustee and conforming to the
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requirements of this Trust Agreement; but in the case of
any such certificates or opinions that by any provision hereof
or of the Trust Indenture Act are specifically required to be
furnished to the Property Trustee, the Property Trustee shall
be under a duty to examine the same to determine whether or not
they conform to the requirements of this Trust Agreement.
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property 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 at least a Majority in
Liquidation Amount of the Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Payment Account shall be to deal with such Property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement and the
Trust Indenture Act;
(v) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section
3.1 and except to the extent otherwise required by law; and
(vi) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust Agreement, nor
shall the Property Trustee be liable for the default or misconduct of
any other Issuer Trustee or the Depositor.
(f) The Administrative Trustees shall not be responsible for
monitoring the compliance by the Issuer Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall either Administrative
Trustee be liable for the default or misconduct of any other Issuer Trustee or
the Depositor.
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SECTION 8.2. Certain Notices.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such Event of
Default to the Holders and the Administrative Trustee, unless such Event of
Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such exercise
to the Holders and the Administrative Trustees, unless such exercise shall have
been revoked.
The Property Trustee shall not be deemed to have knowledge of any
Event of Default unless the Property Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this Trust
Agreement shall have obtained actual knowledge, of such Event of Default.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may 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, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action,
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein, or (iii) 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 Holders of the Capital Securities are entitled to vote under the
terms of this Trust Agreement, the Property Trustee shall deliver a notice to
the Depositor requesting the Depositor's opinion as to the course of action to
be taken and 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
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action not inconsistent with this Trust Agreement as it shall deem advisable
and in the best interests of the Holders, in which event the Property Trustee
shall have no liability except for its own bad faith, negligence or wilful
misconduct;
(c) any direction or act of the Depositor contemplated by this Trust
Agreement shall be sufficiently evidenced by an Officers' Certificate;
(d) any direction or act of an Administrative Trustee contemplated by
this Trust Agreement shall be sufficiently evidenced by a certificate executed
by such Administrative Trustee and setting forth such direction or act;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or re-registration thereof;
(f) the Property Trustee may consult with counsel (which counsel may
be counsel to the Depositor or any of its Affiliates, and may include any of
its employees) and the advice of such 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 and in accordance
with such advice; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
(g) 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 Holders pursuant to this Trust Agreement, unless such
Holders shall have offered to the Property Trustee reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction; provided that, nothing
contained in this Section 8.3(g) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Trust Agreement;
(h) 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,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Holders, but the Property
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit;
(i) 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, bad faith or
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wilful misconduct with respect to selection of any agent or attorney appointed
by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect
to enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders (which
instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action), (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; and
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on any Issuer 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 it 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 any Issuer Trustee shall be construed to be a
duty.
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Issuer Trust, and the Issuer Trustees
do not assume any responsibility for their correctness. The Issuer Trustees
shall not be accountable for the use or application by the Depositor of the
proceeds of the Debentures.
The Property Trustee may conclusively assume that any funds held by it
hereunder are legally available unless an officer of the Property Trustee
assigned to its Corporate Trust Administration department shall have received
written notice from the Depositor, any Holder or any other Issuer Trustee that
such funds are not legally available.
SECTION 8.5. May Hold Securities.
Any Issuer Trustee or any agent of any Issuer Trustee or the Issuer
Trust, in its individual or any other capacity, may become the owner or pledgee
of Trust Securities and, subject to Sections 8.8 and 8.13 and, except as
provided in the definition of the term
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"Outstanding" in Article I, may otherwise deal with the Issuer Trust with the
same rights it would have if it were not an Issuer Trustee or such agent.
SECTION 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to each Issuer Trustee and Paying Agent from time to time
such reasonable compensation for all services rendered by them hereunder as may
be agreed by the Depositor and such Issuer Trustee or Paying Agent, as the case
may be, from time to time (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 each
Issuer Trustee and Paying Agent upon request for all reasonable expenses,
disbursements and advances incurred or made by each Issuer Trustee and Paying
Agent 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 negligence, bad faith or wilful misconduct; and
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Issuer Trustee, (ii) each Paying Agent, (iii) any
Affiliate of any Issuer Trustee, (iv) any officer, director, shareholder,
employee, representative or agent of any Issuer Trustee, and (v) any employee
or agent of the Issuer Trust (referred to herein as an "Indemnified Person")
from and against any loss, damage, liability, tax, penalty, expense or claim of
any kind or nature whatsoever incurred by such Indemnified Person by reason of
the creation, operation or termination of the Issuer Trust or any act or
omission performed or omitted by such Indemnified Person in good faith on
behalf of the Issuer Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of authority conferred on such Indemnified
Person by this Trust Agreement, except that no Indemnified Person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such Indemnified Person by reason of negligence, bad faith or wilful misconduct
with respect to such acts or omissions.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement.
No Issuer Trustee or Paying Agent may claim any Lien on any Trust
Property as a result of any amount due pursuant to this Section 8.6.
The Depositor, any Issuer Trustee and any Paying Agent may engage in
or possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Issuer Trust, and the Issuer Trust and the
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Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Issuer Trust, shall not be deemed wrongful or improper. Neither
the Depositor, any Paying Agent nor any Issuer Trustee shall be obligated to
present any particular investment or other opportunity to the Issuer Trust even
if such opportunity is of a character that, if presented to the Issuer Trust,
could be taken by the Issuer Trust, and the Depositor, any Issuer Trustee or
any Paying Agent shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Issuer Trustee or Paying Agent may engage
or be interested in any financial or other transaction with the Depositor or
any Affiliate of the Depositor, or may act as depository for, trustee or agent
for, or act on any committee or body of holders of, securities or other
obligations of the Depositor or its Affiliates.
SECTION 8.7. Corporate Property Trustee Required; Eligibility of Issuer
Trustees.
(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 is
a national or state chartered bank and eligible pursuant to the Trust Indenture
Act to act as such, and that has at the time of such appointment securities
rated in one of the three highest rating categories by a nationally recognized
statistical rating organization and a combined capital and surplus of at least
$70,000,000. 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 8.7 and to the
extent permitted by the Trust Indenture Act, 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 8.7, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. At the time of appointment, the Property Trustee must have securities
rated in one of the three highest rating categories by a nationally recognized
statistical rating organization.
(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 that
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 with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law and that shall
act through one or more persons authorized to bind such entity.
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SECTION 8.8. Conflicting Interests.
(a) 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.
(b) The Guarantee Agreement and the Indenture shall be deemed to be
specifically described in this Trust Agreement for the purposes of clause (i)
of the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, 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, Depositor and the Administrative Trustees,
by agreed action of the majority of them shall have power to appoint, and upon
the written request of the Administrative Trustee and the Depositor shall for
such purpose join with the Administrative Trustees 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 the extent required by law to act as separate trustee of
any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section 8.9. Any co-trustee
or separate trustee appointed pursuant to this Section 8.9 shall either be (i)
a natural person who is at least 21 years of age and a resident of the United
States, or (ii) a legal entity with its principal place of business in the
United States that shall act through one or more persons authorized to bind
such entity. If an Event of Default under the Indenture shall have occurred
and be continuing, the Property Trustee alone shall have the power to make such
appointment.
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:
(a) The Trust Securities shall be executed by one or more
Administrative Trustees, and the Trust Securities shall be delivered by the
Property Trustee, and all rights, powers,
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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 Property Trustee specified hereunder shall be exercised solely by the
Property Trustee and not by such co-trustee or separate trustee.
(b) 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.
(c) 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 8.9, and, in case a Debenture 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
resigning or removed may be appointed in the manner provided in this Section
8.9.
(d) 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
trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Issuer Trustee (the "Relevant
Trustee") and no appointment of a successor Issuer Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Issuer Trustee in accordance with the applicable requirements of
Section 8.11.
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Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Holders. If the
instrument of acceptance by the successor Issuer Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within 60 days after
the giving of such notice of resignation, the Relevant Trustee may petition, at
the expense of the Depositor, any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by Act of the Holder
of the Common Securities. If a Debenture Event of Default shall have occurred
and be continuing, the Property Trustee or the Delaware Trustee, or both of
them, may be removed at such time by Act of the Holders of a Majority in
Liquidation Amount of the Capital Securities, delivered to the Relevant Trustee
(in its individual capacity and, in the case of the Property Trustee, on behalf
of the Issuer Trust). An Administrative Trustee may be removed by the Holder of
the Common Securities at any time.
If any Issuer Trustee shall resign, be removed or become incapable of
acting as Issuer Trustee, or if a vacancy shall occur in the office of any
Issuer Trustee for any cause, at a time when no Debenture Event of Default
shall have occurred and be continuing, the Holder of the Common Securities, by
Act delivered to the retiring Issuer Trustee, shall promptly appoint a
successor Issuer Trustee or Issuer Trustees, and such successor Issuer Trustee
shall comply with the applicable requirements of Section 8.11. If the Property
Trustee or the Delaware Trustee shall resign, be removed or become incapable of
continuing to act as the Property Trustee or the Delaware Trustee, as the case
may be, at a time when a Debenture Event of Default shall have occurred and be
continuing, the Holders of Capital Securities, by Act of the Holders of a
Majority in Liquidation Amount of the Capital Securities delivered to the
retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee
or Trustees, and such successor Issuer Trustee shall comply with the applicable
requirements of Section 8.11. If an Administrative Trustee shall resign, be
removed or become incapable of acting as Administrative Trustee, at a time when
a Debenture Event of Default shall have occurred and be continuing, the Holder
of the Common Securities by Act delivered to the Administrative Trustee shall
promptly appoint a successor Administrative Trustee or Administrative Trustees
and such successor Administrative Trustee or Trustees shall comply with the
applicable requirements of Section 8.11. If no successor Relevant Trustee shall
have been so appointed by the Holder of the Common Securities or the Holders of
a Majority in Liquidation Amount of the Capital Securities, as the case may be,
and accepted appointment in the manner required by Section 8.11, any Holder who
has been a Holder of Trust Securities for at least six months may, on behalf of
such Holder and all others similarly situated, or any other Issuer Trustee, may
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
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The Property Trustee shall give notice of each resignation and each
removal of an Issuer Trustee and each appointment of a successor Issuer Trustee
to all Holders in the manner provided in Section 10.8 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, if any Delaware Trustee who is a natural person dies or becomes, in
the opinion of the Depositor, incompetent or incapacitated, the vacancy created
by such death, incompetence or incapacity may be filled by (a) the unanimous
act of the remaining Administrative Trustees if there are at least two of them
or (b) otherwise by the Depositor (with the successor in either case being a
Person who satisfies the eligibility requirement for the Delaware Trustee set
forth in Section 8.7).
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Issuer Trust, and (b) shall add to or change any of
the provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Issuer Trust by more than one Relevant
Trustee, it being understood that nothing herein or in such amendment shall
constitute such Relevant Trustees co-trustees and upon the execution and
delivery of such amendment the resignation or removal of the retiring Relevant
Trustee shall become effective to the extent provided therein and each 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 request of the Issuer Trust or any successor Relevant
Trustee such retiring Relevant Trustee shall duly assign, transfer and deliver
to such successor Relevant Trustee all Trust Property, all proceeds thereof and
money held by such retiring Relevant Trustee hereunder with respect to the
Trust Securities and the Issuer Trust.
Upon request of any Issuer Trustee or any such successor Relevant
Trustee, the retiring Relevant Trustee or the Issuer Trust, as the case may be,
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 first or second preceding paragraph, as the case may
be.
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No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware Trustee 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 that such Person shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto.
SECTION 8.13. Preferential Collection of Claims Against Depositor or
Issuer Trust.
If and when the Property Trustee shall be or become a creditor of the
Depositor or the Issuer Trust (or any other obligor upon the Capital
Securities), the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
the Issuer Trust (or any such other obligor).
SECTION 8.14. Property Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Issuer Trust or any other obligor upon the Trust
Securities or the property of the Issuer Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any
Distributions on the Trust Securities shall then be due and payable and
irrespective of whether the Property Trustee shall have made any demand on the
Issuer Trust for the payment of any past due Distributions) shall be entitled
and empowered, to the fullest extent permitted by law, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting
the Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 8.15. Reports by Property Trustee.
(a) Not later than January 31 of each year commencing with January 31,
1998, the Property Trustee shall transmit to all Holders in accordance with
Section 10.8, and to the Depositor, a brief report dated as of the immediately
preceding December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if
to the best of its knowledge it has continued to be eligible under
said Section, a written statement to such effect;
(ii) a statement that the Property Trustee has complied with
all of its obligations under this Trust Agreement during the
twelve-month period (or, in the case of the initial report, the period
since the Closing Date) ending with such December 31 or, if the
Property Trustee has not complied in any material respect with such
obligations, a description of such noncompliance; and
(iii) any change in the property and funds in its possession
as Property Trustee since the date of its last report and any action
taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its
opinion materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to Holders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National
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Market or such other interdealer quotation system or self-regulatory
organization upon which the Trust Securities are listed or traded, with the
Commission and with the Depositor.
SECTION 8.16. Reports to the Property Trustee.
Each of the Depositor and the Administrative Trustees on behalf of the
Issuer 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
the compliance certificate required by Section 314(a) of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act. The Depositor and the Administrative Trustees on behalf of
the Issuer Trust shall annually file with the Property Trustee a certificate
specifying whether such Person is in compliance with all of the terms and
covenants applicable to such Person hereunder.
SECTION 8.17. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Issuer 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 by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in the
form of an Officers' Certificate.
SECTION 8.18. Number of Issuer Trustees.
(a) The number of Issuer Trustees shall be four, provided that the
Property Trustee and the Delaware Trustee may be the same Person.
(b) If an Issuer Trustee ceases to hold office for any reason, a
vacancy shall occur. The vacancy shall be filled with an Issuer Trustee
appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer Trustee shall not
operate to annul, dissolve or terminate the Issuer Trust.
SECTION 8.19. Delegation of Power.
(a) Any Administrative Trustee, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 such
Administrative Trustee's power for the purpose of executing any documents
contemplated in Section 2.7(a), including any registration statement or
amendment thereto filed with the Commission, or making any other governmental
filing; and
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(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things
and the execution of such instruments either in the name of the Issuer 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 this Trust Agreement.
SECTION 8.20. Appointment of Administrative Trustees.
(a) The Administrative Trustee shall initially be W. Flake Oakley and
Young J. Boozer, III, and their successors shall be appointed by the Holder of
all the Common Securities. The Administrative Trustees may resign or be removed
by the Holder of all the Common Securities at any time. Upon any resignation or
removal of an Administrative Trustee, the Depositor shall appoint a successor
Administrative Trustee. If at any time there is no Administrative Trustee, the
Property Trustee or any Holder who has been a Holder of Trust Securities for at
least six months may petition any court of competent jurisdiction for the
appointment of one or more Administrative Trustees.
(b) 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 this Section 8.20, the Administrative Trustees in
office, regardless of their number (and notwithstanding any other provision of
this Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.
(c) Notwithstanding the foregoing or any other provision of this Trust
Agreement, if any Administrative Trustee who is a natural person dies or
becomes, in the opinion of the Holder of all the Common Securities, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by the unanimous act of the remaining Administrative Trustees, if
there were at least two of them prior to such vacancy, and by the Depositor, if
there were not two such Administrative Trustees immediately prior to such
vacancy (with the successor being a Person who satisfies the eligibility
requirement for Administrative Trustees set forth in Section 8.7).
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ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier terminated, the Issuer Trust shall automatically
terminate on January 15, 2027 (the "Expiration Date"), following the
distribution of the Trust Property in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Holder of all the Common Securities;
(b) the written direction to the Property Trustee from the Holder of
all the Common Securities at any time to terminate the Issuer Trust and to
distribute the Debentures to Holders in exchange for the Capital Securities
(which direction is optional and wholly within the discretion of the Holder of
all the Common Securities);
(c) the redemption of all of the Capital Securities in connection with
the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Issuer Trust by a
court of competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Issuer Trustees
and the Issuer Trust created and continued hereby shall terminate upon the
latest to occur of the following: (a) the distribution by the Property Trustee
to Holders of all amounts required to be distributed hereunder upon the
liquidation of the Issuer Trust pursuant to Section 9.4, or upon the redemption
of all of the Trust Securities pursuant to Section 4.2; (b) the payment of any
expenses owed by the Issuer 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 Issuer Trust or the Holders.
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall be
liquidated by the Issuer
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Trustees as expeditiously as the Issuer Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Issuer
Trust as provided by applicable law, to each Holder a Like Amount of
Debentures, subject to Section 9.4(d). Notice of liquidation 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 Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Securities Register. All
such 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 Debentures; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Property Trustee and the Administrative Trustees
shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the liquidation of the Issuer Trust and distribution of the Debentures to
Holders, the Property Trustee, either itself acting as exchange agent or
through the appointment of a separate exchange agent, shall establish a record
date for such distribution (which shall be not more than 45 days prior to the
Liquidation Date) and establish such procedures as it shall deem appropriate to
effect the distribution of Debentures in exchange for the Outstanding Trust
Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
Trust Securities Certificates to the exchange agent for exchange, (iii) any
Trust Securities Certificates not so surrendered for exchange will be deemed to
represent a Like Amount of Debentures bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on such Trust
Securities 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
Debentures), and (iv) all rights of Holders holding Trust Securities will
cease, except the right of such Holders to receive Debentures upon surrender of
Trust Securities Certificates.
(d) If, notwithstanding the other provisions of this Section 9.4,
whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise,
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distribution of the Debentures in the manner provided herein is determined by
the Property Trustee not to be practical, or if an Early Termination Event
specified in clause (c) of Section 9.2 occurs, the Trust Property shall be
liquidated, and the Issuer Trust shall be dissolved, wound-up or terminated, by
the Property Trustee in such manner as the Property Trustee determines. In such
event, on the date of the dissolution, winding-up or other termination of the
Issuer Trust, Holders will be entitled to receive out of the assets of the
Issuer Trust available for distribution to Holders, after satisfaction of
liabilities to creditors of the Issuer Trust as provided by applicable law, an
amount equal to the Liquidation Amount per Trust Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If, upon any such dissolution, winding up or
termination, the Liquidation Distribution can be paid only in part because the
Issuer 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 Issuer Trust on the Trust Securities shall be paid on a
pro rata basis (based upon Liquidation Amounts). The Holder of all the Common
Securities will be entitled to receive Liquidation Distributions upon any such
dissolution, winding-up or termination pro rata (determined as aforesaid) with
Holders of Capital Securities, except that, if a Debenture Event of Default
specified in Section 5.1(1) or 5.1(2) of the Indenture has occurred and is
continuing, the Capital Securities shall have a priority over the Common
Securities as provided in Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of
Issuer Trust.
The Issuer Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to this Section 9.5. At the request of the Holder of all the Common Securities,
with the consent of the Administrative Trustees, but without the consent of the
Holders of the Outstanding Capital Securities, the Issuer Trust may merge with
or into, consolidate, amalgamate, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any State; provided, that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Issuer Trust with respect to the Capital Securities, or (b) substitutes for the
Capital Securities other securities having substantially the same terms as the
Capital Securities (the "Successor Securities") so long as the Successor
Securities have the same priority as the Capital Securities with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii) a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee is appointed to hold the Debentures, (iii) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not cause the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization that
then assigns a rating to the Capital Securities, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of
the Capital Securities (including any Successor Securities) in any material
respect,
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(v) such successor entity has a purpose substantially identical to that of the
Issuer Trust, (vi) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Depositor has received an
Opinion of Counsel to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders of the Capital
Securities (including any Successor Securities) in any material respect, and
(b) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Issuer Trust nor such successor
entity will be required to register as an "investment company" under the
Investment Company Act, and (vii) the Depositor or its permitted transferee
owns all of the Common Securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee Agreement. Notwithstanding the foregoing,
the Issuer Trust shall not, except with the consent of holders of all of the
Capital Securities, 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 other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause
the Issuer Trust or the successor entity to be taxable as a corporation or
classified as other than a grantor trust for United States Federal income tax
purposes.
The transactions contemplated by the Registration Rights
Agreement shall not be prohibited by this Section 9.5.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders.
Except as set forth in Section 9.2, the death or incapacity of any
person having an interest, beneficial or otherwise, in Trust Securities shall
not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such person or any Holder for such person, to claim
an accounting, take any action or bring any proceeding in any court 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 10.2. Amendment.
(a) This Trust Agreement may be amended from time to time by the
Issuer Trustees and the Holder of the Common Securities, without the consent of
any Holder of the Capital Securities, (i) to cure any ambiguity, correct or
supplement any provision herein that may be inconsistent with any other
provision herein, or to make any other provisions with respect
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<PAGE> 67
to matters or questions arising under this Trust Agreement, which shall not be
inconsistent with the other provisions of this Trust Agreement, 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 Issuer Trust will not be
taxable as a corporation or will be classified as a grantor trust for United
States Federal income tax purposes at all times that any Trust Securities are
Outstanding or to ensure that the Issuer Trust will not be required to register
as an "investment company" under the Investment Company Act; provided, however,
that in either case (i) or (ii) such action shall not adversely affect in any
material respect the interests of any Holder.
(b) Except as provided in Section 10.2(c) hereof, any provision of
this Trust Agreement may be amended by the Issuer Trustees and the Holder of
the Common Securities and with (i) the consent of Holders of at least a
Majority in Liquidation Amount of the Capital Securities, and (ii) receipt by
the Issuer Trustees of an Opinion of Counsel to the effect that such amendment
or the exercise of any power granted to the Issuer Trustees in accordance with
such amendment will not cause the Issuer Trust to be taxable as a corporation
for United States Federal income tax purposes or affect the Issuer Trust's
exemption from status as an "investment company" under the Investment Company
Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Holder (such consent
being obtained in accordance with Section 6.3 or 6.6 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, or (ii) restrict the right of a Holder to institute suit
for the enforcement of any such payment on or after such date; and
notwithstanding any other provision herein, without the unanimous consent of
the Holders (such consent being obtained in accordance with Section 6.3 or 6.6
hereof), this paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Issuer Trustee shall enter into or consent to any amendment to this Trust
Agreement that would cause the Issuer Trust to fail or cease to qualify for the
exemption from status as an "investment company" under the Investment Company
Act or to be taxable as a corporation or to be classified as other than a
grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Administrative Trustees, this
Trust Agreement may not be amended in a manner that imposes any additional
obligation on the Depositor or the Administrative Trustees.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees or the Property Trustee shall promptly provide to
the Depositor a copy of such amendment.
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<PAGE> 68
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement that affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
SECTION 10.3. Separability.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 10.4. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
HOLDERS, THE ISSUER TRUST, THE DEPOSITOR AND THE ISSUER TRUSTEES WITH RESPECT
TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS. THE PROVISIONS OF SECTION 3540 OF
TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THIS TRUST.
SECTION 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no Distributions
shall accumulate on such unpaid amount for the period after such date.
SECTION 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Issuer Trust and any Issuer
Trustee, including any successor by operation of law. Except in connection with
a consolidation, merger or sale involving the Depositor that is permitted under
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
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<PAGE> 69
SECTION 10.7. Headings.
The Article and Section headings are for convenience only and shall
not affect the construction of this Trust Agreement.
SECTION 10.8. Reports, Notices and Demands.
(a) Any report, notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or
served to or upon any Holder 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, (a) in the
case of a Holder of Capital Securities, to such Holder as such Holder's name
and address may appear on the Securities Register; and (b) in the case of the
Holder of the Common Securities or the Depositor, to The Colonial BancGroup,
Inc., One Commerce Street, Montgomery, Alabama 36104, Attention: W. Flake
Oakley, facsimile no.: (334) 240-6019, or to such other address as may be
specified in a written notice by the Holder of the Common Securities or the
Depositor, as the case may be, to the Property Trustee. Such notice, demand or
other communication to or upon a Holder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission. Such notice, demand or other communication to or upon the
Depositor shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Depositor.
(b) Any notice, demand or other communication that by any provision
of this Trust Agreement is required or permitted to be given or served to or
upon the Issuer Trust or any Issuer Trustee 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, (a) in the
case of the Property Trustee to Wilmington Trust Company, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890, facsimile (302) 651-8882,
Attention: Corporate Trust Administration; (b) in the case of the Delaware
Trustee, to Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890, facsimile (302) 651-8882, Attention:
Corporate Trust Administration; (c) in the case of the Administrative Trustees,
to them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of Colonial Capital I; and (d) in the case of the
Issuer Trust, to its principal executive office specified in Section 2.2, with
a copy to each of the Property Trustee, the Delaware Trustee and the
Administrative Trustees, or, in each such case, to such other address as may be
specified in a written notice by the applicable Person to the Property Trustee,
the Depositor and the Holders. Such notice, demand or other communication to or
upon the Property Trustee, the Delaware Trustee, the Administrative Trustees or
the Issuer Trust shall be deemed to have been sufficiently given or made only
upon actual receipt of the writing by the Property Trustee, the Delaware
Trustee, such Administrative Trustees or the Issuer Trust, as the case may be.
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<PAGE> 70
SECTION 10.9. Agreement Not to Petition.
Each of the Issuer Trustees and the Depositor agree for the benefit of
the Holders that, until at least one year and one day after the Issuer Trust
has been terminated in accordance with Article IX, they shall not file, or join
in the filing of, a petition against the Issuer Trust under any bankruptcy,
insolvency, reorganization or other similar law (including the United States
Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the
commencement of any proceeding against the Issuer Trust under any Bankruptcy
Law. The Property Trustee and the Depositor agree, for the benefit of Holders,
that if the Depositor or any Issuer Trustee takes action in violation of this
Section 10.9, then at the expense of the Depositor, the Property Trustee or
Depositor, as the case may be, shall file an answer with the bankruptcy court
or otherwise properly contest the filing of such petition by the Depositor
against the Issuer 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 estopped and precluded therefrom and such other defenses, if any, as
counsel for the Issuer Trustees or the Issuer Trust may assert.
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(a) Except as otherwise expressly provided herein, the Trust Indenture
Act shall apply as a matter of contract to this Trust Agreement for purposes of
interpretation, construction and defining the rights and obligations hereunder,
and this Trust Agreement, the Depositor and the Property Trustee shall be
deemed for all purposes hereof to be subject to and governed by the Trust
Indenture Act to the same extent as would be the case if this Trust Agreement
were qualified under that Act on the date hereof. Except as otherwise expressly
provided herein, if and to the extent that any provision of this Trust
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.
(b) The Property Trustee shall be the only Issuer Trustee that is a
trustee for the purposes of the Trust Indenture Act.
(c) 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 Issuer Trust.
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee
Agreement, Indenture and Registration Rights Agreement.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE
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<PAGE> 71
HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF
ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE AGREEMENT,
THE INDENTURE AND THE REGISTRATION RIGHTS AGREEMENT, AND AGREEMENT TO THE
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AGREEMENT AND THE
INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE ISSUER TRUST, SUCH HOLDER
AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND THE
REGISTRATION RIGHTS AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE ISSUER TRUST AND SUCH HOLDER AND SUCH OTHERS.
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.
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<PAGE> 72
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.
THE COLONIAL BANCGROUP, INC.
as Depositor
By:
Name:
Title:
WILMINGTON TRUST COMPANY,
as Property Trustee
By:
Name:
Title:
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
Name:
Title:
By:
Name:
as Administrative Trustee
By:
Name:
as Administrative Trustee
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<PAGE> 73
Exhibit A
[CERTIFICATE OF TRUST]
<PAGE> 74
Exhibit B
[CERTIFICATE DEPOSITORY AGREEMENT]
<PAGE> 75
Exhibit C
[Form of Common Securities Certificate]
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF
THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST
AGREEMENT.
<TABLE>
<CAPTION>
CERTIFICATE NUMBER NUMBER OF COMMON SECURITIES
________
<S> <C>
C-__
</TABLE>
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
COLONIAL CAPITAL I
____% COMMON SECURITIES
(LIQUIDATION AMOUNT $1,000 PER COMMON SECURITY)
Colonial Capital I, a statutory business trust created under the laws
of the State of Delaware (the "Issuer Trust"), hereby certifies that [NAME OF
HOLDER] (the "Holder") is the registered owner of __________ (____) common
securities of the Issuer Trust representing common undivided beneficial
interests in the assets of the Issuer Trust and designated the __% Common
Securities (liquidation amount $1,000 per Common Security) (the "Common
Securities"). Except in accordance with Section 5.11 of the Trust Agreement (as
defined below) the Common Securities are not transferable and any attempted
transfer hereof other than in accordance therewith 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 Issuer Trust, dated as of January __, 1997, as the same may be
amended from time to time (the "Trust Agreement"), among The Colonial
BancGroup, Inc., a Delaware corporation, as Depositor, Wilmington Trust
Company, as Delaware Trustee and as Property Trustee, and the Administrative
Trustees named therein, including the designation of the terms of the Common
Securities as set forth therein. The Issuer Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the Issuer
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.
Terms used but not defined herein have the meanings set forth in the
Trust Agreement.
<PAGE> 76
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer
Trust has executed this certificate this _____ day of __________, ____.
COLONIAL CAPITAL I
By:
Name:
Administrative Trustee
C-2
<PAGE> 77
Exhibit D
[Form of Expense Agreement]
AGREEMENT AS TO EXPENSES AND LIABILITIES, dated as of January __, 1997
(as modified, amended or supplemented, this "Agreement"), between The Colonial
BancGroup, Inc., a Delaware corporation (the "Corporation"), and Colonial
Capital I, a Delaware business trust (the "Issuer Trust").
WHEREAS, the Issuer Trust intends to issue its Common Securities (the
"Common Securities") to and acquire the Debentures from the Corporation, and to
issue and sell __% Capital Securities, Series A (the "Capital Securities") with
such powers, preferences and special rights and restrictions as are set forth
in the Amended and Restated Trust Agreement of the Issuer Trust, dated as of
January __, 1997, among the Corporation, as Depositor, Wilmington Trust
Company, as Delaware Trustee and as Property Trustee, and the Administrative
Trustees named therein, as the same may be amended from time to time (the
"Trust Agreement"); and
WHEREAS, the Corporation will own all of the Common Securities of the
Issuer Trust and will issue the Debentures; and
WHEREAS, capitalized terms used but not defined herein have the
meanings set forth in the Trust Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Corporation and the Issuer
Trust hereby agree as follows:
ARTICLE I
SECTION 1.1. Guarantee by Corporation. Subject to the terms and
conditions hereof, the Corporation hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Issuer 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 costs, expenses or
liabilities of the Issuer Trust, other than obligations of the Issuer Trust to
pay to holders of any Trust Securities the amounts due such holders pursuant to
the terms of the Trust Securities. 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 1.2. Subordination of Guarantee. The guarantee and other
liabilities and obligations of the Corporation under this Agreement shall
constitute unsecured obligations of the Corporation and shall rank subordinate
and junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Corporation to the extent and in the
<PAGE> 78
manner set forth in the Indenture with respect to the Debentures, and the
provisions of Article XIII of the Indenture will apply, mutatis mutandis, to
the obligations of the Corporation hereunder. The obligations of the
Corporation hereunder do not constitute Senior Indebtedness (as defined in the
Indenture) of the Corporation.
SECTION 1.3. Term of Agreement. This Agreement shall terminate and be
of no further force and effect upon the dissolution of the Issuer Trust;
provided, however, that this Agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any holder of Capital
Securities or any Beneficiary must restore payment of any sums paid under the
Capital Securities, under any Obligation, under the Guarantee Agreement dated
the date hereof by The Colonial BancGroup, Inc. as guarantor, and Wilmington
Trust Company, as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
SECTION 1.4. Waiver of Notice. The Corporation hereby waives notice of
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and the Corporation hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 1.5. No Impairment. The obligations, covenants, agreements and
duties of the Corporation 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 Issuer 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 Issuer 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 Issuer Trust or any of the assets of the Issuer Trust
(other than the dissolution of the Issuer Trust in accordance with the
terms thereof).
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation with respect to the happening of any of the
foregoing.
SECTION 1.6. Enforcement. A Beneficiary may enforce this Agreement
directly against the Corporation and the Corporation waives any right or remedy
to require that any action be brought against the Issuer Trust or any other
person or entity before proceeding against the Corporation.
SECTION 1.7. Subrogation. The Corporation shall be subrogated to all
rights (if any) of any Beneficiary against the Issuer Trust in respect of any
amounts paid to the
D-2
<PAGE> 79
Beneficiaries by the Corporation under this Agreement; provided, however, that
the Corporation shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Agreement, if, at the
time of any such payment, any amounts are due and unpaid under this Agreement.
ARTICLE II
SECTION 2.1. Assignment. This Agreement may not be assigned by either
party hereto without the consent of the other, and any purported assignment
without such consent shall be void.
SECTION 2.2. Binding Effect. All guarantees and agreements contained
in this Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the
Beneficiaries.
SECTION 2.3. Amendment. So long as there remains any Beneficiary or
any Capital Securities are Outstanding, this Agreement shall not be modified or
amended in any manner adverse to such Beneficiary or to the Holders of the
Capital Securities without the consent of such Beneficiary or the Holders of
the Capital Securities, as the case may be.
SECTION 2.4. 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-
D-3
<PAGE> 80
back, if sent by telex):
Colonial Capital I
c/o The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Facsimile No.: (334) 240-6019
Attention: [ ]
With a copy to:
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Facsimile No.: (302) 651-8882
Attention: Corporate Trust Administration
The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Facsimile No.: (334) 240-6019
Attention: [ ]
SECTION 2.4. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
D-4
<PAGE> 81
IN WITNESS WHEREOF, this Agreement as to Expenses and Liabilities is
executed as of the day and year first above written.
THE COLONIAL BANCGROUP, INC.
By:
Name:
Title:
COLONIAL CAPITAL I
By:
Name:
Administrative Trustee
D-5
<PAGE> 82
Exhibit E
[Form of Capital Securities Certificate]
[IF THE CAPITAL SECURITIES CERTIFICATE IS TO BE A BOOK-ENTRY CAPITAL
SECURITIES CERTIFICATE, INSERT--This Capital Securities Certificate is a
Book-Entry Capital Securities Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of a Clearing
Agency or a nominee of a Clearing Agency. This Capital Securities Certificate
is exchangeable for Capital Securities Certificates registered in the name of a
person other than the Clearing Agency or its nominee only in the limited
circumstances described in the Trust Agreement and may not be transferred
except as a whole by the Clearing Agency to a nominee of the Clearing Agency or
by a nominee of the Clearing Agency to the Clearing Agency or another nominee
of the Clearing Agency, except in the limited circumstances described in the
Trust Agreement.
Unless this Capital Security Certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation ("DTC"),
to Colonial Capital I or its agent for registration of transfer, exchange or
payment, and any Capital Security Certificate issued is registered in the name
of Cede & Co. or such other name as is requested by an authorized
representative of DTC (and any payment is 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 A PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest herein.]
[IF THE CAPITAL SECURITIES CERTIFICATE IS TO EVIDENCE A RESTRICTED
CAPITAL SECURITY, INSERT -- THE CAPITAL SECURITIES EVIDENCED HEREBY AND ANY
JUNIOR SUBORDINATED DEBENTURES ISSUABLE IN CONNECTION THEREWITH HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY ANY
INITIAL INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT, (1) TO A PERSON WHO THE TRANSFEROR
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER ACQUIRING FOR ITS OWN
ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING
THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B) BY ANY INITIAL INVESTOR
THAT IS A QUALIFIED INSTITUTIONAL BUYER OR BY ANY SUBSEQUENT INVESTOR, (1)
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OR (2)
<PAGE> 83
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND,
IN EACH CASE (A) AND (B), IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. SECURITIES OWNED BY
AN INITIAL INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD
IN BOOK-ENTRY FORM AND MAY NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS, AS PROVIDED IN THE TRUST
AGREEMENT REFERRED TO BELOW.]
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"),
NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL SECURITIES CERTIFICATE OR
ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 OR
ANOTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING AND, IN
THE CASE OF ANY PURCHASER OR HOLDER RELYING ON ANY EXEMPTION OTHER THAN PTCE
96-23, 95-60, 91-38, 90-1 OR 84-14, HAS COMPLIED WITH ANY REQUEST BY THE
DEPOSITOR OR THE ISSUER TRUST FOR AN OPINION OF COUNSEL OR OTHER EVIDENCE WITH
RESPECT TO THE AVAILABILITY OF SUCH EXEMPTION. ANY PURCHASER OR HOLDER OF THIS
CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF THAT IT EITHER (A) IS NOT A PLAN
OR A PLAN ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR
WITH "PLAN ASSETS" OF ANY PLAN, OR (B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE
EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING.
CERTIFICATE NUMBER NUMBER OF CAPITAL SECURITIES
P-__ _______
CUSIP NO.
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
E-2
<PAGE> 84
COLONIAL CAPITAL I
__% CAPITAL SECURITIES, SERIES A
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
Colonial Capital I, a statutory business trust created under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that
_____________________________ (the "Holder") is the registered owner of
_________________ (____) capital securities of the Issuer Trust representing a
preferred undivided beneficial interest in the assets of the Issuer Trust and
designated the __% Capital Securities, Series A (liquidation amount $1,000 per
Capital Security) (the "Capital Securities"). The Capital Securities are
transferable on the books and records of the Issuer 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 5.5 of the Trust Agreement
(as defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities are set
forth in, and this certificate and the Capital Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions of,
the Amended and Restated Trust Agreement of the Issuer Trust, dated as of
January __, 1997, as the same may be amended from time to time (the "Trust
Agreement"), among The Colonial BancGroup, Inc., a Delaware corporation, as
Depositor, Wilmington Trust Company, as Delaware Trustee and as Property
Trustee, and the Administrative Trustees named therein, including the
designation of the terms of the Capital Securities as set forth therein. The
Holder is entitled to the benefits of the Guarantee Agreement, dated as of
January __, 1997 (the "Guarantee Agreement"), entered into by The Colonial
BancGroup, Inc., a Delaware corporation, and Wilmington Trust Company, as
guarantee trustee, to the extent provided therein. The Issuer Trust will
furnish a copy of the Trust Agreement and the Guarantee Agreement to the Holder
without charge upon written request to the Issuer 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.
E-3
<PAGE> 85
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer Trust
has executed this certificate this _____ day of __________, ____.
COLONIAL CAPITAL I
By:
Name:
Administrative Trustee
E-4
<PAGE> 86
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security to:
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Capital Security Certificate on the books of the Issuer
Trust. The agent may substitute another to act for him or her.
Date: ________________
Signature: ___________________________________________________________________
(Sign exactly as your name appears on the other
side of this Capital Security Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
E-5
<PAGE> 87
Exhibit F
[Form of Restricted Securities Certificate]
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 5.5(b) of the Trust Agreement)
[_________________________],
as Security Registrar
[address]
Re: __% Capital Securities, Series A of Colonial Capital I
(the "Issuer Trust") (the "Capital Securities")
Reference is made to the Amended and Restated Trust Agreement,
dated as of January __, 1997 (the "Trust Agreement"), among The Colonial
BancGroup, Inc., as Depositor, Wilmington Trust Company, as Property Trustee
and Delaware Trustee, and the Administrative Trustees named therein. Terms used
herein and defined in the Trust Agreement or in Regulation S, Rule 144A or Rule
144 under the U.S. Securities Act of 1933, as amended (the "Securities Act"),
are used herein as so defined.
This certificate relates to $_____________ aggregate
Liquidation Amount of Capital Securities, which are evidenced by the following
certificate(s) (the "Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
CURRENTLY IN BOOK-ENTRY FORM: _____ Yes _____ No (check one)
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so.
Such beneficial owner or owners are referred to herein collectively as the
"Owner". If the Specified Securities are represented by a Book-Entry Capital
Securities Certificate, they are held through the Clearing Agency or a Clearing
Agency Participant in the name of the Undersigned, as or on behalf of the
Owner. If the Specified Securities are not represented by a Book-Entry Capital
Securities Certificate, they are registered in the name of the Undersigned, as
or on behalf of the Owner.
<PAGE> 88
The Owner has requested that the Specified Securities be
transferred to another person (the "Transferee"). In connection with such
transfer, the Owner hereby certifies that, unless such transfer is being
effected pursuant to an effective registration statement under the Securities
Act, it is being effected in accordance with Rule 144A, Rule 904, Rule 144 or
another available exemption from registration under the Securities Act and all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as:
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to
a person that the Owner and any person acting on its behalf
reasonably believe is a "qualified institutional buyer" within
the meaning of Rule 144A, acquiring for its own account or for
the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf
have taken reasonable steps to ensure that the Transferee is
aware that the Owner may be relying on Rule 144A in connection
with the transfer.
(2) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities,
an affiliate of the Depositor or the Issuer Trust or any such
distributor or a person acting on behalf of any of the
foregoing;
(B) the offer of the Specified Securities was not
made to a person in the United States;
(C) either;
(i) at the time the buy order was originated,
the Transferee was outside the United States or the
Owner and any person acting on its behalf reasonably
believed that the Transferee was outside the United
States, or
(ii) the transaction is being executed in, on
or through the facilities of the Eurobond market, as
regulated by the Association of International Bond
Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on
its behalf knows that the transaction has been
prearranged with a buyer in the United States;
F-2
<PAGE> 89
(D) no directed selling efforts have been made in the
United States by or on behalf of the Owner or any affiliate
thereof; and
(E) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act.
(3) Rule 144 Transfers. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least two years (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the date the Specified
Securities were acquired from the Depositor or the Issuer
Trust or from an affiliate (as such term is defined in Rule
144) of the Depositor or the Issuer Trust, whichever is later,
and is being effected in accordance with the applicable
amount, manner of sale and notice requirements of paragraphs
(e), (f) and (h) of Rule 144; or
(B) the transfer is occurring after a holding period
of at least three years has elapsed since the date the
Specified Securities were acquired from the Depositor or the
Issuer Trust or from an affiliate (as such term is defined in
Rule 144) of the Depositor or the Issuer Trust, whichever is
later, and the Owner is not, and during the preceding three
months has not been, an affiliate of the Depositor or the
Issuer Trust.
(4) Other Exemption from Registration. If the
transfer is being effected pursuant to an available exemption
from registration under the Securities Act other than (1), (2)
and (3) above:
(A) either (i) the Owner is a "qualified
institutional buyer" within the meaning of Rule 144A or (ii)
the Owner did not acquire the Specified Securities from the
Purchasers when such Capital Securities were initially issued;
and
(B) State basis for such other available exemption:
F-3
<PAGE> 90
This certificate and the statements contained herein are made
for your benefit and the benefit of the Depositor, the Issuer Trust and the
Purchasers.
Dated:
------------------------------------------------
(Print the name of the Undersigned, as such term
is defined in the second paragraph of this
certificate.)
By:
---------------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership
or fiduciary, the title of the person signing on
behalf of the Undersigned must be stated.)
F-4
<PAGE> 1
EXHIBIT 4(K)
================================================================================
GUARANTEE AGREEMENT
BETWEEN
THE COLONIAL BANCGROUP, INC.,
as Guarantor
and
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
RELATING TO
COLONIAL CAPITAL I
--------------------
Dated as of January 29, 1997
--------------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.2. List of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.3. Reports by the Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.4. Periodic Reports to the Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.5. Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.6. Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.7. Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.8. Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.2. Certain Rights of Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3. Compensation; Indemnity; Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee Trustee . . . . . . . . . . . . . . . . . 12
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.2. Waiver of Notice and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.3. Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.4. Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.5. Guarantee of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.6. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.7. Independent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.2. Pari Passu Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VII
TERMINATION
SECTION 7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.2. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.4. Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 8.6. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
-ii-
<PAGE> 4
GUARANTEE AGREEMENT, dated as of January 29, 1997, between The
Colonial BancGroup, Inc., a Delaware corporation (the "Guarantor"), having its
principal office at One Commerce Street, Montgomery, Alabama 36104, and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Capital Securities (as defined herein) of Colonial Capital
I, a Delaware statutory business trust (the "Issuer Trust").
RECITALS OF THE CORPORATION
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of January 29, 1997, among The Colonial BancGroup, Inc., as Depositor,
Wilmington Trust Company, as Property Trustee and Delaware Trustee, the
Administrative Trustees named therein and the holders from time to time of
undivided beneficial interests in the assets of the Issuer Trust, the Issuer
Trust is issuing $70,000,000 aggregate Liquidation Amount (as defined in the
Trust Agreement) of its 8.92% Capital Securities, Series A (liquidation amount
$1,000 per capital security) (the "Capital Securities"), representing preferred
undivided beneficial interests in the assets of the Issuer Trust and having the
terms set forth in the Trust Agreement; and
WHEREAS, the Capital Securities will be issued by the Issuer Trust and
the proceeds thereof, together with the proceeds from the issuance of the
Issuer Trust's Common Securities (as defined herein), will be used to purchase
the Debentures (as defined in the Trust Agreement) of the Guarantor, which
Debentures will be deposited with Wilmington Trust Company, as Property Trustee
under the Trust Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Capital Securities
the Guarantee Payments (as defined herein) on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the purchase of Capital Securities
by each Holder, which purchase the Guarantor hereby acknowledges will benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time.
<PAGE> 5
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
For all purposes of this Guarantee 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) The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;
(e) 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 Guarantee Agreement; and
(f) The words "hereby", "herein", "hereof" and "hereunder" and other
words of similar import refer to this Guarantee Agreement as a whole and not to
any particular Article, Section or other subdivision.
"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.
"Board of Directors" means the board of directors of the Guarantor or
the Executive Committee of the board of directors of the Guarantor (or any
other committee of the board of directors of the Guarantor performing similar
functions) or a committee designated by the board of directors of the Guarantor
(or such committee), comprised of two or more members of the board of directors
of the Guarantor or officers of the Guarantor, or both.
-2-
<PAGE> 6
"Capital Securities" has the meaning specified in the recitals to this
Guarantee Agreement.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.
"Event of Default" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.
"Guarantee Agreement" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Capital Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time; (ii) the Redemption Price (as defined in the
Trust Agreement) with respect to any Capital Securities called for redemption by
the Issuer Trust, to the extent the Issuer Trust shall have funds on hand
available therefor at such time; and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Issuer Trust, unless Debentures
are distributed to the Holders, the lesser of (a) the Liquidation Distribution
(as defined in the Trust Agreement) with respect to the Capital Securities, and
(b) the amount of assets of the Issuer Trust remaining available for
distribution to Holders on liquidation of the Issuer after satisfaction of
liabilities to creditors of the Issuer Trust as required by applicable law.
"Guarantee Trustee" means Wilmington Trust Company, solely in its
capacity as Guarantee Trustee and not in its individual capacity, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement, and thereafter
means each such Successor Guarantee Trustee.
"Guarantor" has the meaning specified in the first paragraph of this
Guarantee Agreement.
"Holder" means any Holder (as defined in the Trust Agreement) of any
Capital Securities; provided, however, that in determining whether the holders
of the requisite percentage of Capital Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor,
the Guarantee Trustee, or any Affiliate of the Guarantor or the Guarantee
Trustee.
-3-
<PAGE> 7
"Indenture" means the Junior Subordinated Indenture, dated as of
January 29, 1997, between The Colonial BancGroup, Inc. and Wilmington Trust
Company, as trustee, as the same may be modified, amended or supplemented from
time to time.
"Issuer Trust" has the meaning specified in the first paragraph of
this Guarantee Agreement.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount of the Capital Securities" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount (as defined in the Trust
Agreement) of all Capital Securities then Outstanding (as defined in the Trust
Agreement).
"Officers' Certificate" means a certificate signed by the Chairman or a
Vice Chairman of the Board of Directors of the Guarantor or the President or a
Vice President of the Guarantor, and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the Guarantor, and delivered to the
Guarantee 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 by each officer signing the Officers'
Certificate that such officer 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 such officer in rendering
the Officers' Certificate;
(c) a statement that 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 such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, company,
limited liability company, trust, business trust, unincorporated association,
or government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
any Senior Vice President, any Vice President, any Assistant Vice President,
the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer,
any Trust Officer or Assistant Trust
-4-
<PAGE> 8
Officer or any other officer of the Corporate Trust Department of the Guarantee
Trustee and also means, with respect to a particular matter, any other officer
to whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Agreement" means the Amended and Restated Trust Agreement of
the Issuer Trust referred to in the recitals to this Guarantee Agreement, as
modified, amended or supplemented from time to time.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this Guarantee Agreement was executed; provided,
however, that if 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.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
Except as otherwise expressly provided herein, the Trust Indenture Act
shall apply as a matter of contract to this Guarantee Agreement for purposes of
interpretation, construction and defining the rights and obligations hereunder,
and this Guarantee Agreement, the Guarantor and the Guarantee Trustee shall be
deemed for all purposes hereof to be subject to and governed by the Trust
Indenture Act to the same extent as would be the case if this Guarantee
Agreement were qualified under that Act on the date hereof. Except as otherwise
expressly provided herein, 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 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before June 30 and December 31 of
each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders (a "List of Holders") as of
a date not more than 15 days prior to the delivery thereof, and (b) at such
other times as the Guarantee 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, in each
case to the
-5-
<PAGE> 9
extent such information is in the possession or control of the Guarantor and
has not otherwise been received by the Guarantee Trustee in its capacity as
such. The Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with the requirements of
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than January 31 of each year, commencing January 31, 1998,
the Guarantee Trustee shall provide to the Holders such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. If this Guarantee Agreement
shall have been qualified under the Trust Indenture Act, the Guarantee Trustee
shall also comply with the requirements of Section 313(d) of the Trust Indenture
Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee and the Holders
such documents, reports and information, if any, as required by Section 314 of
the Trust Indenture Act and the compliance certificate required by Section 314
of the Trust Indenture Act, in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act, provided that such documents, reports
and information shall not be required to be provided to the Securities and
Exchange Commission unless this Guarantee Agreement shall have been qualified
under the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such 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 of the Guarantor pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of at least a Majority in Liquidation Amount of the
Capital Securities may, by vote, on behalf of the Holders of all the Capital
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist,
and any default or Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Guarantee Agreement, but no such
-6-
<PAGE> 10
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notice of any such Event of Default known to the Guarantee Trustee,
unless such Event of Default has been cured before the giving of such notice,
provided that, except in the case of a default in the payment of a Guarantee
Payment, the Guarantee 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 Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests
of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained actual knowledge, of such Event of
Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement and the Indenture 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 THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except to a Successor Guarantee Trustee
on acceptance by such Successor Guarantee Trustee of its appointment to act as
Guarantee Trustee hereunder. The right, title and interest of the Guarantee
Trustee, as such, hereunder shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, 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 Guarantee Trustee.
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(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing 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 (including pursuant to Section 2.1), and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee. If an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Guarantee 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 Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own wilful 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 Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement (including pursuant to Section
2.1), and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement (including
pursuant to Section 2.1); and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee 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 Guarantee 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 or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
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 Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which
such judgment was made.
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(iii) The Guarantee 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 not less than a
Majority in Liquidation Amount of the Capital Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee, under this Guarantee Agreement.
(iv) Subject to Section 3.1(b), no provision of this Guarantee
Agreement shall require the Guarantee 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 Guarantee 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 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may 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 reasonably 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 unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee 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 from the Guarantee Trustee, shall be promptly
delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and
the written advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion.
Such legal counsel may be legal counsel to the Guarantor or any of its
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<PAGE> 13
Affiliates and may be one of its or their employees. The Guarantee
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 Guarantee 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 Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in the position of the
Guarantee 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 Guarantee Trustee; provided that
nothing contained in this Section 3.2(a)(v) shall be taken to relieve
the Guarantee 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 Guarantee 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 Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee 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, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
such agent or attorney appointed by it with due care hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (B) may refrain from enforcing such
remedy or right or taking such other action until such instructions
are received, and (C) 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 Guarantee 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 Guarantee 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 Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
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SECTION 3.3. Compensation; Indemnity; Fees.
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such
reasonable compensation for all services rendered by it hereunder as
may be agreed by the Guarantor and the Guarantee Trustee from time to
time (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 Guarantee Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Guarantee 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 Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence, wilful misconduct or bad faith on the part of the Guarantee
Trustee, 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 Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is a national or state chartered bank and
eligible pursuant to the Trust Indenture Act to act as such, and that
has at the time of such appointment securities rated in one of the
three highest rating categories by a nationally recognized statistical
rating organization and a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements
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<PAGE> 15
of Section 310(a) of the Trust Indenture Act. If such corporation
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 4.1 and to the extent permitted by the
Trust Indenture Act, 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 Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2.
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(c), the Guarantee Trustee may be appointed
or removed at any time by the Guarantor.
(b) Subject to Section 4.2(c), the Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by giving written
notice thereof to the Holders and the Guarantor and by appointing a successor
Guarantee Trustee.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed and shall have accepted
such appointment. No removal or resignation of a Guarantee Trustee shall be
effective until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor and, in the case of any
resignation, the resigning Guarantee Trustee.
(d) If the Guarantee Trustee shall resign, be removed or become
incapable of acting as Guarantee Trustee and a replacement shall not be
appointed prior to such resignation or removal, or if a vacancy shall occur in
the office of Guarantee Trustee for any reason, and no Successor Guarantee
Trustee shall have been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery to the Holders and the Guarantor of a
notice of resignation, the resigning Guarantee Trustee may petition, at the
expense of the Guarantor, any court of competent jurisdiction for appointment of
a Successor Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.
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<PAGE> 16
ARTICLE V
GUARANTEE
SECTION 5.1. 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 Issuer Trust), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer Trust may have or
assert, except the defense of payment. 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 Issuer Trust to pay such amounts
to the Holders.
SECTION 5.2. 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
Guarantee Trustee, the Issuer 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 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
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
(other than by Act (as defined in the Trust Agreement) of the Holders),
of the performance or observance by the Issuer Trust of any express or
implied agreement, covenant, term or condition relating to the Capital
Securities to be performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust
of all or any portion of the Distributions (other than an extension of
time for payment of Distributions that results from the extension of
any interest payment period on the Debentures as provided in the
Indenture), Redemption Price, Liquidation Distribution or any other
sums payable under the terms of the Capital Securities or the extension
of time for the performance of any other obligation under, arising out
of, or in connection with, the Capital Securities;
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<PAGE> 17
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Capital Securities, or any action on the part of the
Issuer Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of
debt of, or other similar proceedings affecting, the Issuer Trust or
any of the assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor
(other than payment of the underlying obligation), it being the intent
of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
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 the Guarantee Trustee, the Issuer Trust
or any other Person.
SECTION 5.5. 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 of amounts theretofore
paid by the Issuer Trust) or upon the distribution of Debentures to Holders as
provided in the Trust Agreement.
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<PAGE> 18
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer 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 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 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Guarantor to the extent and in the manner set forth in the
Indenture with respect to the Debentures, and the provisions of Article XIII of
the Indenture will apply, mutatis mutandis, to the obligations of the Guarantor
hereunder. The obligations of the Guarantor hereunder do not constitute Senior
Indebtedness (as defined in the Indenture) of the Guarantor.
SECTION 6.2. Pari Passu Guarantees.
The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under (i) any similar
guarantee agreements issued by the Guarantor on behalf of the holders of
preferred or capital securities issued by any Issuer Trust (as defined in the
Indenture); (ii) the Indenture and the Securities (as defined therein) issued
thereunder; (iii) the Expense Agreement (as defined in the Trust
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<PAGE> 19
Agreement) and any similar expense agreements entered into by the Guarantor in
connection with the offering of Capital Securities (as defined in the Indenture)
by any Issuer Trust (as defined in the Indenture); and (iv) any other security,
guarantee or other agreement or obligation that is expressly stated to rank pari
passu with the obligations of the Guarantor under this Guarantee Agreement or
with any obligation that ranks pari passu with the obligations of the Guarantor
under this Guarantee Agreement.
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price (as defined in the
Trust Agreement) of all Capital Securities, (ii) the distribution of Debentures
to the Holders in exchange for all of the Capital Securities, or (iii) full
payment of the amounts payable in accordance with Article IX of the Trust
Agreement upon liquidation of the Issuer 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 is required to repay any sums
paid with respect to Capital Securities or this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder, and any purported assignment other than in
accordance with this provision shall be void.
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<PAGE> 20
SECTION 8.2. Amendments.
Except with respect to any changes that do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Holders of not less than a Majority in Liquidation
Amount of the Capital Securities. The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.
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<PAGE> 21
SECTION 8.3. Notices.
(a) 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:
(i) if given to the Guarantor, to the address or telecopy number set
forth below or such other address or telecopy number as the Guarantor may give
notice to the Guarantee Trustee and the Holders:
The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Attention: W. Flake Oakley
Telecopy: 334-240-6019
(ii) if given to the Guarantee Trustee, at the address or telecopy
number set forth below or such other address or telecopy number as the
Guarantee Trustee may give notice to the Guarantor and the Holders:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telecopy: 302-651-8882
(iii) if given to any Holder, in the manner set forth in Section 10.8
of the Trust Agreement.
(b) 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, provided that any notice
given as provided in Section 8.3(a)(iii) shall be deemed to have been given at
the time specified in Section 10.8 of the Trust Agreement.
SECTION 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.
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<PAGE> 22
SECTION 8.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.6. Counterparts.
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.
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<PAGE> 23
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee
Agreement to be duly executed, and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
<TABLE>
<S> <C>
THE COLONIAL BANCGROUP, INC.
[SEAL]
By:
-------------------------------
Name:
Title:
[SEAL]
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
By:
-------------------------------
Name:
Title:
</TABLE>
<PAGE> 24
STATE OF )
) ss.:
COUNTY OF )
On the .... day of January, 1997, before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that s/he is ............................ of The Colonial
BancGroup, Inc., one of the corporations described in and which executed the
foregoing instrument; that s/he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation; and that s/he
signed her/his name thereto by like authority.
..............................
STATE OF )
) ss.:
COUNTY OF )
On the .... day of January, 1997, before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that s/he is ............................ of Wilmington Trust
Company, one of the corporations described in and which executed the foregoing
instrument; that s/he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation; and that s/he signed her/his
name thereto by like authority.
.............................
<PAGE> 1
EXHIBIT 4(L)
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT AS TO EXPENSES AND LIABILITIES, dated as of January 29, 1997
(as modified, amended or supplemented, this "Agreement" ) between The Colonial
BancGroup, Inc., a Delaware corporation (the "Corporation"), and Colonial
Capital I, a Delaware business trust (the "Issuer Trust").
WHEREAS, the Issuer Trust intends to issue its Common Securities (the
"Common Securities") to and acquire the Debentures from the Corporation, and to
issue and sell 8.92% Capital Securities, Series A (the "Capital Securities")
with such powers, preferences and special rights and restrictions as are set
forth in the Amended and Restated Trust Agreement of the Issuer Trust, dated as
of January 29, 1997, among the Corporation, as Depositor, Wilmington Trust
Company, as Delaware trustee and as Property Trustee, and the Administrative
Trustees named therein, as the same may be amended from time to time (the "Trust
Agreement"); and
WHEREAS, the Corporation will own all of the Common Securities of the
Issuer Trust and will issue the Debentures; and
WHEREAS, capitalized terms used but not defined herein have the
meanings set forth in the Trust Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Corporation and the Issuer
Trust hereby agree as follows:
ARTICLE I
SECTION 1.1. Guarantee by Corporation. Subject to the terms and
conditions hereof, the Corporation hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Issuer Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as
sue, of any and all Obligations (as hereinafter defined) to such Beneficiaries.
As used herein, "Obligations" means any costs, expenses or liabilities of the
Issuer Trust, other than obligations of the Issuer Trust to pay to holders of
any Trust Securities the amounts due such holders pursuant to the terms of the
Trust Securities. 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 1.2. Subordination of Guarantee. The guarantee and other
liabilities and obligations of the Corporation under this Agreement shall
constitute unsecured obligations of the Corporation and shall rank subordinate
and junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Corporation to the extent and in the manner set forth in the
Indenture with respect to Debentures, and the provisions of Article
<PAGE> 2
XIII of the Indenture will apply, mutatis mutandis, to the obligations of the
Corporation hereunder. The obligations of the Corporation hereunder do not
constitute Senior Indebtedness (as defined in the Indenture) of the Corporation.
SECTION 1.3. Terms of Agreement. This Agreement shall terminate and be
of no further force and effect upon the dissolution of the Issuer Trust;
provided, however, that this Agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any holder of Capital
Securities or any Beneficiary must restore payment of any sums paid under the
Capital Securities, under any Obligation, under the Guarantee Agreement dated
the date hereof by The Colonial BancGroup, Inc., as guarantor, and Wilmington
Trust Company, as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
SECTION 1.4. Waiver of Notice. The Corporation hereby waives notice of
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and the Corporation hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 1.5. No Impairment. The obligations, covenants, agreements and
duties of the Corporation 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 Issuer 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 Issuer 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 Issuer Trust or any of the
assets of the Issuer Trust (other than the dissolution of the
Issuer Trust in accordance with the terms thereof).
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation with respect to the happenings of any of the
foregoing.
SECTION 1.6. Enforcement. A Beneficiary may enforce this Agreement
directly against the Corporation and the Corporation waives any right or remedy
to require that any
2
<PAGE> 3
action be brought against the Issuer Trust or any other person or entity before
proceeding against the Corporation.
SECTION 1.7. Subrogation. The Corporation shall be subrogated to all
rights (if any) of any Beneficiary against the Issuer Trust in respect of any
amounts paid to the Beneficiaries by the Corporation under this Agreement;
provided, however, that the Corporation shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Agreement, if,
at the time of any such payment, any amounts are due and unpaid under this
Agreement.
ARTICLE II
SECTION 2.1. Assignment. This Agreement may not be assigned by either
party hereto without the consent of the other, and any purported assignment
without such consent shall be void.
SECTION 2.2. Binding Effect. All guarantees and agreements contained in
this Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the
Beneficiaries.
SECTION 2.3. Amendment. So long as there remains any Beneficiary or any
Capital Securities are outstanding, this Agreement shall not be modified or
amended in any manner adverse to such Beneficiary or to the Holders of the
Capital Securities without the consent of such Beneficiary or the Holders of the
Capital Securities, as the case may be.
SECTION 2.4. 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):
Colonial Capital I
c/o The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Facsimile No: (334) 240-6019
Attention: W. Flake Oakley
3
<PAGE> 4
With a copy to:
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Facsimile No: (302) 651-8882
Attention: Corporate Trust Administration
The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Facsimile No: (334) 240-6019
Attention: W. Flake Oakley
SECTION 2.4. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
In Witness Whereof, this Agreement as to Expenses and Liabilities is
executed as of the day and year first above written,
The Colonial BancGroup, Inc.
By:__________________________________
Name: W. Flake Oakley
Title: Executive Vice President and
Chief Financial Officer
Colonial Capital II
By:__________________________________
Name: Young J. Boozer, III
Administrative Trustee
4
<PAGE> 1
EXHIBIT 5(A)
February 20, 1997
Montgomery Office
The Colonial BancGroup, Inc.
P. O. Box 1108
Montgomery, AL 36101
Re: Registration Statement on Form S-4 relating to the exchange
offer of Colonial Capital II (the "Registration Statement").
Ladies and Gentlemen:
We are familiar with the proceedings taken and proposed to be taken in
connection with the registration under the Securities Act of 1933 (the "Act")
of $72,165,000 aggregate principal amount of Junior Subordinated Deferrable
Interest Debentures (the "Debt Securities") of The Colonial BancGroup, Inc., a
Delaware corporation (the "Corporation), $70,000,000 aggregate liquidation
amount of Capital Securities (the "Capital Securities") of Colonial Capital II,
a Delaware statutory business trust (the "Issuer"), and the Guarantee with
respect to the Capital Securities (the "Guarantee") to be executed and
delivered by the Corporation for the benefit of the holders from time to time
of the Capital Securities. We have also acted as counsel for the Company in
connection with the preparation and filing with the Securities and Exchange
Commission under the Securities Act of 1933, of the Registration Statement on
Form S-4 referred to in the caption above.
In this connection and in order to render this opinion, we have
examined such records, agreements, instruments, documents, and certificates of
officers and employees of the Corporation as appropriate. In all such
examinations, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
to the original documents of documents submitted to us as certified or
<PAGE> 2
photostatic copies. We have relied on certificates issued to us by the
secretaries of state and other appropriate government officials of the various
states in which the Corporation is incorporated or qualified and, except as
expressly set forth in any such documents or hereinafter, we have assumed the
authority of the person or persons who have executed any such documents on
behalf of any person or persons, state or any other entity.
Upon the basis of the foregoing, we are of the opinion that:
(1) The Corporation is a corporation duly organized and validly
existing under the laws of the State of Delaware;
(2) When:
(i) the Registration Statement relating to the Debt Securities, the
Capital Securities and the Guarantee has become effective under the Act;
(ii) the Guarantee Agreement relating to the Guarantee with respect
to the Capital Securities of the Issuer has been duly executed and delivered;
(iii) the Debt Securities have been duly executed and authenticated
in accordance with the Indenture and issued and delivered as contemplated in
the Registration Statement; and
(iv) the Capital Securities have been duly executed in accordance
with the Amended and Restated Trust Agreement ("Trust Agreement") of the Issuer
and issued and delivered as contemplated in the Registration Statement,
(A) the Debt Securities and the Guarantee relating to the Capital
Securities of the Issuer will constitute valid and legally binding obligations
of the Corporation, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicablility relating
to or affecting creditors' rights and to general equity principles,
(B) the Capital Securities will, when so issued, be duly and validly
authorized and issued and will be fully paid and nonassessable securities of
the Issuer, subject to limited exceptions stated in the Trust Agreement, and
(C) under the laws of the State of Delaware, no personal liability
attaches to the ownership of the Capital Securities.
We give no opinion as to the laws of any jurisdiction other than
general corporation law of the State of Delaware and the laws of the United
States and the State of Alabama. We are licensed to practice law only in the
State of Alabama.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced
2
<PAGE> 3
registration statement and to the reference to our firm in the prospectus under
the heading "Validity of New Capital Securities". In consenting to the
inclusion of our opinion in the Registration Statement, we do not thereby admit
that we are a person whose consent is required pursuant to Section 7 of the
Securities Act of 1933, as amended.
Sincerely yours,
MILLER, HAMILTON, SNIDER & ODOM, L.L.C.
By: /s/ Michael D. Waters
-----------------------------
Michael D. Waters
MDW/mfm
3
<PAGE> 1
EXHIBIT 5(B)
[RICHARDS, LAYTON & FINGER LETTERHEAD]
February 19, 1997
Colonial Capital II
c/o The Colonial BankGroup, Inc.
One Commerce Street
Montgomery, AL 36104
Re: Colonial Capital II
Ladies and Gentlemen:
We have acted as special Delaware counsel for The Colonial BankGroup,
Inc., a Delaware corporation (the "Company"), and Colonial Capital II, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of February 14,
1997 (the "Certificate"), as filed in the office of the Secretary of State of
Delaware (the "Secretary of State") on February 14, 1997;
(b) The Trust Agreement of the Trust, dated as of February 14,
1997, between the Company, as depositor and the trustee of the Trust named
therein;
<PAGE> 2
Colonial Capital II
February 19, 1997
Page 2
(c) The registration statement (the "Registration Statement") on Form
S-4, as proposed to be filed by the Company and the Trust with the Securities
and Exchange Commission (the "SEC") on or about February 19, 1997, including a
related preliminary prospectus (the "Prospectus"), relating to the Capital
Securities of the Trust representing preferred undivided beneficial interests
in the assets of the Trust (each, a "Capital Security" and collectively, the
"Capital Securities");
(d) A form of Amended and Restated Trust Agreement of the Trust
(including Exhibits A, C, and E) (the "Trust Agreement"), among the Company, as
depositor, the trustees of the Trust named therein and the holders, from time
to time, of preferred undivided beneficial interests in the assets of the
Trust, attached to the Registration Statement as Exhibit 4D; and
(e) A Certificate of Good Standing for the Trust, dated February 19,
1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to
be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement 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 that the Trust Agreement and the
Certificate are in full force and effect and have not been amended (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the
<PAGE> 3
Colonial Capital II
February 19, 1997
Page 3
documents examined by us has the power and authority to execute and deliver,
and to perform its obligations under, such documents, (v) the due
authorization, execution and delivery by all parties thereto of all documents
examined by us, (vi) the receipt by each Person to whom a Capital Security is
to be issued by the Trust (collectively, the "Capital Security Holders") of a
Capital Securities Certificate and the payment for the Capital Security
acquired by it, in accordance with the Trust Agreement and the Registration
Statement, and (vii) that the Capital Securities are issued and sold to the
Capital Security Holders in accordance with the Trust Agreement and the
Registration Statement. We have not participated in the preparation of the
Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered
only with respect to Delaware laws and rules, regulations and orders thereunder
which are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
Section 3801, et seq.
2. When issued and sold, the Capital Securities will represent valid
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable undivided beneficial interests in the assets of the Trust.
3. The Capital Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Capital Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the SEC as an exhibit to
the Registration Statement. In addition, we hereby consent to the use of our
name under the heading "Validity of New Securities" in the Prospectus. In
giving the foregoing consents, we do not thereby admit that we come within the
category of Persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and
<PAGE> 4
Colonial Capital II
February 19, 1997
Page 4
regulations of the SEC thereunder. Except as stated above, without our prior
written consent, this opinion may not be furnished or quoted to, or relied upon
by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
MIL/DAF/MM/kth
<PAGE> 1
EXHIBIT 8
February 20, 1997
Reply To:
Montgomery Office
The Colonial BancGroup, Inc.
One Commerce Street
Montgomery, Alabama 36104
Dear Ladies and Gentlemen:
As counsel to Colonial Capital II (the "Issuer") and The Colonial
BancGroup, Inc. in connection with the exchange offer by the Issuer of
$70,000,000 of its 8.92% Capital Securities pursuant to a preliminary
Prospectus (the "Prospectus") filed as part of a registration statement on Form
S-4 on or about February 20, 1997, and assuming (i) the holder of the Common
Securities of the Issuer will have "substantial assets" (other than the Common
Securities) within the meaning of Treasury Regulations Section 301.7701-
2(d)(2) and (ii) the operative documents described in the Prospectus will be
performed in accordance with the terms described therein, we hereby confirm to
you our opinion as set forth under the heading "Certain Federal Income Tax
Consequences" in the Prospectus, subject to the limitations set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Certain
Federal Income Tax Consequences" in the Prospectus. In giving such consent, we
do not hereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Sincerely,
MILLER, HAMILTON, SNIDER & ODOM, L.L.C.
MDW/mfm
<PAGE> 1
EXHIBIT 23(A)
Consent of Coopers & Lybrand, L.L.P.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-4 of our report dated February 11, 1997, on our audits of the
consolidated financial statements of The Colonial BancGroup, Inc., as of
December 31, 1995 and 1994 and for each of the three years in the period ended
December 31, 1995 and our report dated February 11, 1997 on our audits of the
supplemental consolidated financial statements of The Colonial BancGroup Inc.,
as of December 31, 1995 and 1994, and for each of the three years in the period
ended December 31, 1995. We also consent to the reference to our firm under
the captions "Experts."
/s/ Coopers & Lybrand L.L.P.
Montgomery, Alabama
February 20, 1997
<PAGE> 1
EXHIBIT 23(B)
Consent of Miller, Hamilton, Snider & Odom, L.L.C.
CONSENT OF COUNSEL
The Colonial BancGroup, Inc.
We hereby consent to use in this Form S-4 Registration Statement of
The Colonial BancGroup, Inc., of our name in the Prospectus, which is a part of
such Registration Statement, under the headings "Certain Federal Income Tax
Consequences," and "Validity of New Securities" to the summarization of our
opinions referenced therein, and to the inclusion of our opinion at Exhibit 5
and Exhibit 8 of the Registration Statement.
/s/ MILLER, HAMILTON, SNIDER & ODOM, L.L.C.
February 20, 1997
<PAGE> 1
EXHIBIT 23(C)
Consent of Richards, Layton & Finger, P.A.
CONSENT OF COUNSEL
Contained in the legal opinion at Exhibit 5(B) of this Registration
Statement and incorporated herin by reference.
<PAGE> 1
EXHIBIT 99(A)
LETTER OF TRANSMITTAL
COLONIAL CAPITAL II
OFFER TO EXCHANGE ITS
8.92% CAPITAL SECURITIES
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF THE OUTSTANDING
8.92% CAPITAL SECURITIES OF COLONIAL CAPITAL I
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
PURSUANT TO THE PROSPECTUS
DATED __________________, 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON _________, 1997,
UNLESS THE OFFER IS EXTENDED.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
WILMINGTON TRUST COMPANY
BY MAIL/OVERNIGHT DELIVERY/HAND
Wilmington Trust Company
Corporate Trust Operation
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn: _________________
TO CONFIRM BY TELEPHONE OR FOR INFORMATION
(302) 651-8869
FACSIMILE TRANSMISSIONS:
(302) 651-1079
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER
OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning given
them in
<PAGE> 2
the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Capital
Securities (as defined below) either if (i) Old Capital Securities are to be
forwarded herewith or (ii) tenders of Old Capital Securities are to be made by
book-entry transfer to an account maintained by Wilmington Trust Company (the
"Exchange Agent") at The Depositary Trust Company ("DTC") pursuant to the
procedures set forth under "The Exchange Offer -- Procedures for Tendering Old
Capital Securities" in the Prospectus and an Agent's Message (as defined
herein) is not delivered.
Holders of Old Capital Securities whose certificates (the "Certificates") for
such Old Capital Securities are not immediately available or who cannot deliver
their Certificates and all other required documents to the Exchange Agent on or
prior to the Expiration Date (as defined in the Prospectus) or who cannot
complete the procedures for book-entry transfer on or prior to the Expiration
Date, must tender their Old Capital Securities according to the guaranteed
delivery procedures set forth in "The Exchange Offer -- Procedures for
Tendering Old Capital Securities" in the Prospectus.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
2
<PAGE> 3
DESCRIPTION OF OLD CAPITAL SECURITIES TENDERED
<TABLE>
<S> <C> <C> <C> <C>
Old Capital Number of
Securities Liquidation Beneficial Holders
Name and Address of Tendered (Attach Amount of Old for Whom Old
Registered Holder Certificate Additional List Securities Tendered Capital Securities
(Please Fill in if Blank) Numbers* if Necessary) (If Less Than All)** Are Held
Total Amount Tendered: $
</TABLE>
* Need not be completed by book-entry holders.
** Old Capital Securities may be tendered in whole or in part in denominations
of $100,000 and integral multiples of $1,000 in excess thereof, provided that
if any Old Capital Securities are tendered for exchange in part, the untendered
Liquidation Amount thereof must be $100,000 or any integral multiple of $1,000
in excess thereof. All Old Capital Securities held shall be deemed tendered
unless a lesser number is specified in this column.
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS (defined in
Instructions (1) ONLY)
[ ] CHECK HERE IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH
DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
DTC Account Number
Transaction Code Number
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY
IF TENDERED OLD CAPITAL SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name of Registered Holder
Window Ticket Number (if any)
Date of Execution of Notice of Guaranteed Delivery
If Guaranteed Delivery is to be made by Book-Entry Transfer:
Name of Tendering Institution
3
<PAGE> 4
DTC Account Number
Transaction Code Number
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD
CAPITAL SECURITIES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET
FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
Address:
Area Code and Telephone Number: Contact Person:
4
<PAGE> 5
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Colonial Capital II, a Delaware
business trust (the "Issuer"), and The Colonial BancGroup, Inc., a Delaware
Corporation, as Depositor (the "Corporation"), the above-described aggregate
Liquidation Amount of the 8.92% Capital Securities (the "Old Capital
Securities") of Colonial Capital I, a Delaware business trust (the "Old
Issuer") in exchange for a like aggregate Liquidation Amount of the Issuer's
8.92% Capital Securities (the "New Capital Securities") which have been
registered under the Securities Act of 1933 (the "Securities Act"), upon the
terms and subject to the conditions set forth in the Prospectus dated
_____________, 1997 (as the same may be amended or supplemented from time to
time, the "Prospectus"), receipt of which is acknowledged, and in this Letter
of Transmittal (which, together with the Prospectus, constitutes the "Exchange
Offer").
Subject to and effective upon the acceptance of all or any portion of
the Old Capital Securities tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of the
Issuer all right, title and interest in and to such Old Capital Securities as
are being tendered herewith. The undersigned hereby irrevocably constitutes
and appoints the Exchange Agent as its agent and attorney-in-fact (with full
knowledge that the Exchange Agent is also acting as agent of the Corporation
and the Issuer in connection with the Exchange Offer) with respect to the
tendered Old Capital Securities, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest),
subject only to the right of withdrawal described in the Prospectus, to (i)
deliver Certificates for Old Capital Securities to the Issuer together with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Issuer, upon receipt by the Exchange Agent, as the undersigned's agent, of
the New Capital Securities to be issued in exchange for such Old Capital
Securities, (ii) present Certificates for such Old Capital Securities for
transfer, and to transfer the Old Capital Securities on the books of the Old
Issuer, and (iii) receive for the account of the Issuer all benefits and
otherwise exercise all rights of beneficial ownership of such Old Capital
Securities, all in accordance with the terms and conditions of the Exchange
Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED
HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
OLD CAPITAL SECURITIES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE ISSUER WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE
THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES,
AND THAT THE OLD CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY
ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND
DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE CORPORATION, THE ISSUER OR THE
EXCHANGE AGENT TO BE
5
<PAGE> 6
NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE
OLD CAPITAL SECURITIES TENDERED HEREBY, AND THE UNDESIGNED WILL COMPLY WITH ITS
OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT. THE UNDERSIGNED HAS READ
AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER.
The name and address of the registered holder of the Old Capital
Securities tendered hereby should be printed above, if they are not already set
forth above, as they appear on the Certificates representing such Old Capital
Securities. The Certificate numbers and the Old Capital Securities that the
undersigned wishes to tender should be indicated in the appropriate boxes
above.
If any tendered Old Capital Securities are not exchanged pursuant to
the Exchange Offer for any reason, or if the Certificates are submitted for
more Old Capital Securities than are tendered or accepted for exchange,
Certificates for such nonexchanged or nontendered Old Capital Securities will
be returned (or, in the case of Old Capital Securities tendered by book-entry
transfer, such Old Capital Securities will be credited to an account maintained
at DTC), without expense to the tendering holder, promptly following the
expiration or termination of the Exchange Offer.
The undersigned understands that tenders of Old Capital Securities
pursuant to any one of the procedures described under "The Exchange Offer --
Procedures for Tendering Old Capital Securities" in the Prospectus and in the
instructions herein will, upon the Corporation's and the Issuer's acceptance
for exchange of such tendered Old Capital Securities, constitute a binding
agreement between the undersigned, the Corporation and the Issuer upon the
terms and subject to the conditions of the Exchange Offer. The undersigned
recognizes that, under certain circumstances set forth in the Prospectus, the
Corporation and the Issuer may not be required to accept for exchange any of
the Old Capital Securities tendered hereby.
Unless otherwise indicated herein in the box entitled "Special
Issuance Instructions" below, the undersigned hereby directs that the New
Capital Securities be issued in the name of the undersigned or, in the case of
a book-entry transfer of Old Capital Securities, that such New Capital
Securities be credited to the account indicated above maintained at DTC. If
applicable, substitute Certificates representing Old Capital Securities not
exchanged or not accepted for exchange will be issued to the undersigned or, in
the case of a book-entry transfer of Old Capital Securities, will be credited
to the account indicated above maintained at DTC. Similarly, unless otherwise
indicated under "Special Delivery Instructions" below, please deliver New
Capital Securities to the undersigned at the address shown below the
undersigned's signature.
SUBJECT TO THE FOLLOWING SENTENCE, BY TENDERING OLD CAPITAL SECURITIES
AND EXECUTING THIS LETTER OF TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND
AGREES THAT (I) THE UNDERSIGNED IS NOT AN "AFFILIATE" OF THE NEW
6
<PAGE> 7
CORPORATION, THE OLD ISSUER OR THE ISSUER WITHIN THE MEANING OF RULE 405 UNDER
THE SECURITIES ACT, (II) ANY NEW CAPITAL SECURITIES TO BE RECEIVED BY THE
UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS, (III)
THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO
PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW
CAPITAL SECURITIES TO BE RECEIVED IN THE EXCHANGE OFFER, AND (IV) IF THE
UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES
NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES
ACT) OF SUCH NEW CAPITAL SECURITIES. BY TENDERING OLD CAPITAL SECURITIES
PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF TRANSMITTAL, A
HOLDER OF OLD CAPITAL SECURITIES WHICH IS A BROKER-DEALER REPRESENTS AND
AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE
DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO
THIRD PARTIES, EITHER THAT (A) SUCH OLD CAPITAL SECURITIES HELD BY THE
BROKER-DEALER ARE HELD ONLY AS A NOMINEE, OR (B) SUCH OLD CAPITAL SECURITIES
WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF
MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL DELIVER A
PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING THE
REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW
CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT), OR THAT IT UNDERSTANDS
THE RESTRICTIONS ON TRANSFER THAT MAY OTHERWISE APPLY.
THE CORPORATION AND THE ISSUER HAVE AGREED THAT, SUBJECT TO THE
PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE
AMENDED OR SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING
BROKER-DEALER IN CONNECTION WITH RESALES OF NEW CAPITAL SECURITIES RECEIVED IN
EXCHANGE FOR OLD CAPITAL SECURITIES, WHERE SUCH OLD CAPITAL SECURITIES WERE
ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF
MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 90
DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED
CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH NEW
CAPITAL SECURITIES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER.
IN THAT REGARD, EACH PARTICIPATING BROKER-DEALER WHO ACQUIRED OLD CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING
ACTIVITIES, BY TENDERING SUCH OLD CAPITAL SECURITIES AND
7
<PAGE> 8
EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM
THE CORPORATION OR THE ISSUER OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY
OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN
THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO
OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS
CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL
RESPECT OR WHICH CAUSED THE PROSPECTUS TO OMIT TO STATE A MATERIAL FACT
NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY
REFERENCE THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN
THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL
SUSPEND THE SALE OF NEW CAPITAL SECURITIES PURSUANT TO THE PROSPECTUS UNTIL THE
CORPORATION OR THE ISSUER HAVE AMENDED OR SUPPLEMENTED THE PROSPECTUS TO
CORRECT SUCH MISSTATEMENT OR OMISSION AND HAVE FURNISHED COPIES OF THE AMENDED
OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR THE
CORPORATION OR THE ISSUER HAS GIVEN NOTICE THAT THE SALE OF THE NEW CAPITAL
SECURITIES MAY BE RESUMED, AS THE CASE MAY BE. IF THE CORPORATION OR THE
ISSUER GIVES SUCH NOTICE TO SUSPEND THE SALE OF THE NEW CAPITAL SECURITIES, IT
SHALL EXTEND THE 90-DAY PERIOD REFERRED TO ABOVE DURING WHICH PARTICIPATING
BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN CONNECTION WITH THE RESALE
OF NEW CAPITAL SECURITIES BY THE NUMBER OF DAYS DURING THE PERIOD FROM AND
INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN
PARTICIPATING BROKER-DEALER SHALL HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR
AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF THE NEW CAPITAL SECURITIES OR
TO AND INCLUDING THE DATE ON WHICH THE CORPORATION OR THE ISSUER HAS GIVEN
NOTICE THAT THE SALE OF NEW CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE MAY
BE.
Holders of Old Capital Securities whose Old Capital Securities are
accepted for exchange will not receive accumulated Distributions on such Old
Capital Securities for any period from and after the last Distribution date to
which Distributions have been paid or duly provided for on such Old Capital
Securities prior to the original issue date of the New Capital Securities or,
if no such Distributions have been paid or duly provided for, will not receive
any accrued Distributions on such Old Capital Securities, and the undersigned
waives the right to receive any interest on such Old Capital Securities accrued
from and after such Distribution date or, if no such Distributions have been
paid or duly provided for, from and after January 29, 1997.
8
<PAGE> 9
All authority herein conferred or agreed to be conferred in this
Letter of Transmittal shall survive the death or incapacity of the undersigned
and any obligation of the undersigned hereunder shall be binding upon the
heirs, executors, administrators, personal representatives, trustees in
bankruptcy, legal representatives, successors and assigns of the undersigned.
Except as stated in the Prospectus, this tender is irrevocable.
9
<PAGE> 10
HOLDERS SIGN HERE
(SEE INSTRUCTIONS 2, 5, AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREWITH)
(NOTE: SIGNATURES MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder exactly as name appears on Certificates for
the Old Capital Securities hereby tendered or on a security position listing,
or by any person authorized to become the registered holder by endorsements and
documents transmitted herewith (including such opinions of counsel,
certifications and other information as may be required by the Issuer or the
Exchange Agent for the Old Capital Securities to comply with the restrictions
on transfer applicable to the Old Capital Securities). If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary capacity or representative
capacity, please set forth the signer's full title. See instruction 5.
______________________________________________________________________________
(Signature of Holder)
Date:_________________________, 1997
Name:_________________________________________________________________________
(Please Print)
Capacity (full title)_________________________________________________________
Address:______________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number________________________________________________
Tax Identification or Social Security Number__________________________________
GUARANTEE OF SIGNATURE
(SEE INSTRUCTIONS 2 AND 5)
______________________________________________________________________________
(Authorized Signature)
10
<PAGE> 11
Date:___________________________, 1997
Name of Firm__________________________________________________________________
Capacity (full title)_________________________________________________________
(Please Print)
Address_______________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number________________________________________________
SPECIAL ISSUANCE INSTRUCTION
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the New Capital Securities or any Old Capital
Securities that are not tendered are to be issued in the same of someone other
than the registered holder of the Old Capital Securities whose name appears
above.
Issue
[] New Capital Securities and/or
[] Old Capital Securities not tendered
to:
Name
Address
(INCLUDE ZIP CODE)
AREA CODE AND TELEPHONE NUMBER
TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER
11
<PAGE> 12
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
TO BE COMPLETED ONLY IF THE NEW CAPITAL SECURITIES OR ANY OLD CAPITAL
SECURITIES THAT ARE NOT TENDERED ARE TO BE SENT TO SOMEONE OTHER THAN THE
REGISTERED HOLDER OF THE OLD CAPITAL SECURITIES WHOSE NAME APPEARS ABOVE, OR TO
SUCH REGISTERED HOLDER AT AN ADDRESS OTHER THAN THAT SHOWN ABOVE.
MAIL
[] NEW CAPITAL SECURITIES
[] OLD CAPITAL SECURITIES NOT TENDERED
TO:
NAME
ADDRESS
(INCLUDE ZIP CODE)
AREA CODE AND TELEPHONE NUMBER
TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER
12
<PAGE> 13
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES: This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth under
"The Exchange Offer--Procedures for Tendering Old Capital Securities" in the
Prospectus and an Agent's Message is not delivered. Certificates, or
book-entry confirmation of a book-entry transfer of such Old Capital Securities
into the Exchange Agent's account at DTC, as well as this Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date. Tenders by book-entry transfer may
also be made by delivering an Agent's Message in lieu of this Letter of
Transmittal. The term "book-entry confirmation" means a confirmation of book-
entry transfer of Old Capital Securities into the Exchange Agent's account at
DTC. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the tendering
participant, which acknowledgement states that such participant has received
and agrees to be bound by the Letter of Transmittal (including the
representations contained herein) and that the Issuer and the Corporation may
enforce the Letter of Transmittal against such participant. Old Capital
Securities may be tendered in whole or in part in the Liquidation Amount of
$100,000 (100 Capital Securities) and integral multiples of $1,000 in excess
thereof, provided that, if any Old Capital Securities are tendered for exchange
in part, the untendered Liquidation Amount thereof must be $100,000 (100
Capital Securities) or any integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Old Capital Securities and (i) whose Old
capital Securities are not immediately available or (ii) who cannot deliver
their Old Capital Securities, this Letter of transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration Date or (iii) who
cannot complete the procedures for delivery by book-entry transfer on or prior
to the Expiration Date, may tender their Old Capital Securities by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth under "The Exchange Offer--Procedures
for Tendering Old Capital Securities" in the Prospectus. Pursuant to such
procedures: (i) such tender must be made by or through an Eligible Institution
(as defined below); (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the
Corporation and the Issuer, must be received by the Exchange Agent on or prior
to the Expiration Date; and (iii) the Certificates (or book-entry confirmation
(as defined in the Prospectus)) representing all tendered Old Capital
Securities, in proper form for the transfer, together with a Letter of
Transmittal, must be received by the Exchange Agent within three New York Stock
Exchange Inc trading days after the date of execution
13
<PAGE> 14
of such Notice of Guaranteed Delivery, all as provided in "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old Capital
Securities to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on
or prior to the Expiration Date. As used herein and in the Prospectus,
"Eligible Institution" means a firm or other entity identified in Rule 17Ad-15
under the Exchange Act as "an eligible guarantor institution," including (as
such terms are defined therein) (i) a bank; (ii) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS MADE BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY ON OR PRIOR TO THE EXPIRATION DATE.
Neither the Corporation nor the Issuer will accept any alternative, conditional
or contingent tenders. Each tendering holder, by execution of a Letter of
Transmittal (or facsimile thereof), waives any right to receive any notice of
the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee of this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered
holder (which term, for purposes of this document, shall include any
participant in DTC whose name appears on a security position listing as
the owner of the Old Capital Securities) of Old Capital Securities
tendered herewith, unless such holder has completed either the box
entitled "Special Issuance Instructions" or the box entitled "Special
Delivery Instructions" above, or
(ii) such Old Capital Securities are tendered for the account of
a firm that is an Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature on
this Letter of Transmittal. See Instruction 5.
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<PAGE> 15
3. INADEQUATE SPACE. If the space provided in the box captioned "Description of
Old Capital Securities" is inadequate, the Certificate numbers and/or the
Liquidation Amount of Old Capital Securities and any other required information
should be listed on a separate signed schedule which is attached to this Letter
of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Capital Securities
will be accepted only in the Liquidation Amount of $100,000 (100 Capital
Securities) and integral multiples of $1,000 in excess thereof, provided that
if any Old Capital Securities are tendered for exchange in part, the untendered
Liquidation Amount thereof must be $100,000 (100 Capital Securities) or any
integral multiple of $1,000 in excess thereof. If less than all Old Capital
Securities evidenced by any Certificate submitted are to be tendered, fill in
the Liquidation Amount of Old Capital Securities which are to be tendered in
the box entitled "Liquidation Amount of Old Capital Securities Tendered (If
Less than All)." In such case, a new Certificate for the remainder of the Old
Capital Securities that were evidenced by your Old Certificate will be sent to
the holder of the Old Capital Securities, promptly after the Expiration Date
unless the appropriate boxes on this Letter of Transmittal are completed. All
Old Capital Securities represented by Certificates delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tender of Old Capital Securities may be
withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission of such notice of withdrawal must be received by the Exchange
Agent at one of its addresses set forth above or in the Prospectus on or prior
to the Expiration Date. Any such notice of withdrawal must specify the name of
the person who tendered the Old Capital Securities to be withdrawn, the
aggregate Liquidation Amount of Old Capital Securities to be withdrawn, and (if
certificates for Old Capital Securities have been tendered) the name of the
registered holder of the Old Capital Securities as set forth on the
Certificates for the Old Capital Securities, if different from that of the
person who tendered such Old Capital Securities. If Certificates for the Old
Capital Securities have been delivered or otherwise identified to the Exchange
Agent, then prior to the physical release of such Certificates for the Old
Capital Securities, the tendering holder must submit the serial numbers shown
on the particular Certificates for the Old Capital Securities to be withdrawn
and the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth under
"The Exchange Offer--Procedures for Tendering Old Capital Securities," the
notice of withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawal of Old Capital Securities, in which case a
notice of withdrawal will be effective if delivered to the Exchange Agent by
written, telegraphic, telex or facsimile on or prior to the Expiration Date.
Withdrawals of tenders of Old Capital Securities may not be rescinded. Old
Capital Securities properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time on
or prior to the Expiration Date by following any of the procedures described in
the Prospectus under "The
15
<PAGE> 16
Exchange Offer--Procedures for Tendering Old Capital Securities."
All Questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Corporation and
the Issuer, in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Issuer, any affiliates or
assigns of the Corporation and the Issuer, the Exchange Agent or any other
person shall not be under any duty to give any notification of any
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification. Any Old Capital Securities which may have been
tendered but which are withdrawn on or prior to the Expiration Date will be
returned to the holder thereof without cost to such holder promptly after
withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If this
Letter of Transmittal is signed by the registered holder of the Old Capital
Securities tendered hereby, the signature must correspond exactly with the name
as written on the face of the Certificates without alteration, enlargement or
any change whatsoever.
If any of the Old Capital Securities tendered hereby are owners of record by
two or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Capital Securities are registered in different names on
several Certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal (or facsimiles thereof) as there are different
registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to the Corporation and the Issuer, in their sole discretion, of
such person's authority to so act.
When this Letter of Transmittal is signed by the registered owner of the Old
Capital Securities listed and transmitted hereby, no endorsement of
Certificates or separate bond powers are required unless New Capital Securities
are to be issued in the name of a person other than the registered holder.
Signatures on such Certificates or bond powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered
owner of the Old Capital Securities listed, the Certificates must be endorsed
or accompanied by appropriate bond powers, signed exactly as the name of the
registered owner appears on the Certificates, and also must be accompanied by
such opinions of counsel, certifications and other information as the
Corporation, the Issuer or the Exchange Agent may require in accordance with
the restrictions on transfer applicable to the Old Capital Securities.
Signatures on such Certificates or bond powers must be guaranteed by an
Eligible
16
<PAGE> 17
Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Capital Securities are to
be issued in the name of a person other than the signer of this letter of
Transmittal, or if New Capital Securities are to be sent to someone other than
the signer of this Letter of Transmittal or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Old Capital Securities not exchanged will be returned by mail
or, if tendered by book-entry transfer, by crediting the account indicated
above maintained at DTC unless the appropriate boxes on this Letter of
Transmittal are completed. See Instruction 4.
7. IRREGULARITIES. The Corporation and the Issuer will determine, in their
sole discretion, all questions as to the form of documents, validity,
eligibility (including time of receipt) and acceptance for exchange of any
tender of Old Capital Securities, which determination shall be final and
binding on all parties. The Corporation and the Issuer reserve the absolute
right to reject any and all tenders determined by either of them not to be in
proper form or acceptance of which, or exchange for, may in the view of counsel
to the Corporation or the Issuer, be unlawful. The Corporation and the Issuer
also reserve the absolute right, subject to applicable law, to waive any of the
conditions of the Exchange Offer set forth in the Prospectus under "The
Exchange Offer--Certain Conditions to the Exchange Offer" or any conditions or
irregularity in any tender of Old Capital Securities of any particular holder
whether or not similar conditions or irregularities are waived in the case of
other holders. The Corporation's and the Issuer's interpretation of the terms
and conditions of the Exchange Offer (including this Letter of Transmittal and
the instructions hereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. The Corporation, the
Issuer, any affiliates or assigns of the Corporation, the Issuer, the Exchange
Agent, or any other person shall not be under any duty to give notification of
any irregularities in tenders or incur any liability for failure to give such
notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income tax
law, a holder whose tendered Old Capital Securities are accepted for exchange
is required to provide the Exchange Agent with such holder's correct taxpayer
identification number ("TIN") on the Substitute W-9 form below. If the Exchange
Agent is not provided with the correct TIN, the Internal Revenue Service (the
"IRS") may subject the holder or other payee to a $50 penalty. In addition,
payments to such holders or other payees with
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<PAGE> 18
respect to Old Capital Securities exchanged pursuant to the Exchange Offer may
be subject to a 31% backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the tendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 2 is checked, the holder or
other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the substitute form
W-9. If the holder furnishes the Exchange Agent with its TIN within 60 days
after the date of the Substitute Form W-9, the amounts retained during the 60
day period will be remitted to the holder and no further amounts shall be
retained or withheld from payments made to the holder thereafter. If, however,
the holder has not provided the Exchange Agent with its TIN within such 60 day
period, amounts withheld will be remitted to the IRS as backup withholding. In
addition, 31% of all payments made thereafter will be withheld and remitted to
the IRS until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Capital Securities or of the last transferee appearing on the transfers
attached to, or endorsed on, the Old Capital Securities. If the Old Capital
Securities are registered in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
Certain holders (including, among others, corporations, financial institutions
and certain foreign persons) may not be subject to these backup withholding and
reporting requirements. Such holders should nevertheless complete the attached
Substitute Form W-9 below, and write "exempt" on the face thereof, to avoid
possible erroneous backup withholding. A foreign person may qualify as an
exempt recipient by submitting a properly completed IRS Form W-8, signed under
penalties of perjury, attesting to that holder's exempt status. Please consult
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional guidance on which holders are exempt from
backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather, the
U.S. Federal income tax liability of a person subject to a backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificates representing
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<PAGE> 19
Old Capital Securities have been lost, destroyed or stolen, the holder should
promptly notify the Exchange Agent. The holder will then be instructed as to
the steps that must be taken in order to replace the Certificates. The Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost, destroyed or stolen Certificates have been followed.
11. SECURITY TRANSFER TAXES. Holders who tender their Old Capital Securities
for exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, New Capital Securities are to be delivered to, or are
to be issued in the name of, any person other than the registered holder of the
Old Capital Securities tendered, or if a transfer tax is imposed for any reason
other than the exchange of Old Capital Securities in connection with the
Exchange Offer, then the amount of any such transfer tax (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer will be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE
EXPIRATION DATE.
19
<PAGE> 20
<TABLE>
<CAPTION>
PAYER'S NAME: WILMINGTON TRUST COMPANY
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART 1-PLEASE PROVIDE YOUR TIN IN _________________________________
FORM W-9 THE BOX AT THE RIGHT AND CERTIFY Social Security Number(s)
BY SIGNING AND DATING BELOW. OR
Department of the _________________________________
Treasury Internal Employer Identification Number(s)
Revenue Service
----------------------------------------------------------------------------------
Payer's Request for PART 2-CERTIFICATION - Under Penalties PART 3 -
Taxpayer of Perjury, certify that:
Identification Awaiting TIN [ ]
Number (TIN) (1) The number shown on the form is my correct
Taxpayer Identification Number (or I am waiting
for a number to be issued to me) and
(2) I am not subject to backup withholding because PART 4 - For Payee
(a) I am exempt from backup withholding, or (b) I Exempt from Backup
have not been notified by the Internal Revenue Service Withholding
("IRS") that I am subject to backup withholding as a
result of failure to report all interest or dividends Exempt [ ]
or (c) the IRS has notified me that I am no longer
subject to backup withholding.
----------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS - You must cross out Item (2) in Part 2 above if you
have been notified by the IRS that you are currently subject to backup
withholding because of under reporting interest or dividends on your tax return.
However, if after being notified by the IRS that you were subject to backup
withholding, you received another notification from the IRS stating that you are
no longer subject to backup withholding, do not cross out Item (2). If you are
exempt from backup withholding, check the box in Part 4 above.
SIGNATURE_________________________________ DATE_______________, 1997
Please fill your name and address below:
________________________________________
Name
________________________________________
Address (number and street)
________________________________________
________________________________________
(City, State and Zip Code)
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU
PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
</TABLE>
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<PAGE> 21
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that until I provide a taxpayer identification number, 31% of all
reportable dividend payments made to me will be withheld, but will be
refunded if I provide a certified taxpayer identification number within 60
days. After the 60-day period has elapsed, 31% of all reportable payments
will be withheld.
________________________________ ______________________, 1997
Signature Date
21
<PAGE> 1
EXHIBIT 99(B)
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
8.92% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
COLONIAL CAPITAL II
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Old Issuer's (as defined below) 8.92% Capital Securities
(the "Old Capital Securities") are not immediately available, (ii) Old Capital
Securities, the Letter of Transmittal and all other documents required cannot
be delivered to Wilmington Trust Company (the "Exchange Agent") on or prior to
the Expiration Date (as defined in the Prospectus referred to below) or (iii)
the procedures for delivery by book-entry transfer cannot be completed on or
prior to the Expiration Date. This Notice of Guaranteed Delivery may be
delivered by hand, overnight courier or mail, or transmitted by facsimile, to
the Exchange Agent on or prior to the Expiration Date. See "The Exchange
Offer--Procedures for Tendering Old Capital Securities" in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
WILMINGTON TRUST COMPANY
BY MAIL/OVERNIGHT DELIVERY/HAND:
Wilmington Trust Company
Corporate Trust Operation
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn: [ ]
TO CONFIRM BY TELEPHONE OR FOR MORE INFORMATION:
(302) 651-8869
FACSIMILE TRANSMISSIONS:
(302) 651-1079
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE
TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
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THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES.
IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN
"ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE
MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER
OF TRANSMITTAL.
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Ladies and Gentlemen:
The undersigned hereby tenders to Colonial Capital II, a Delaware business
trust, upon the terms and subject to the conditions set forth in the Prospectus
dated _______________, 1997 (as the same may be amended or supplemented from
time to time, the "Prospectus"), and the related Letter of Transmittal (which
together constitute the "Exchange Offer") receipt of which is hereby
acknowledged, the aggregate principal amount of Old Capital Securities set
forth below pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer--Procedures for Tendering Old
Capital Securities".
Aggregate Liquidation Name of Registered Holder:
Amount Tendered:
Certificate Nos: Address:
(if available)
Area Code and Telephone Number:
If Old Capital Securities will be tendered by book-entry transfer, provide the
following information:
SIGNATURE:
DTC ACCOUNT NUMBER:
DATE:
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
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GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution" including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities exchange,
registered securities association or clearing agency; or (v) a savings
association that is a participant in a Securities Transfer Association
recognized program (each of the foregoing being referred to as an "Eligible
Institution"), hereby guarantees to deliver to the Exchange Agent, at one of
its addresses set forth above, either the Old Capital Securities tendered
hereby in proper form for transfer, or confirmation of the book-entry transfer
of such Old Capital Securities to the Exchange Agent's account at The
Depository Trust Company ("DTC"), pursuant to the procedures for book-entry
transfer set forth in the Prospectus, in either case together with one or more
properly completed and duly executed Letters of Transmittal (or facsimile
thereof) and any other required documents within three business days after the
date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letters of Transmittal
and the Old Capital Securities tendered hereby to the Exchange Agent within the
time period set forth above and that failure to do so could result in a
financial loss to the undersigned.
Name of Firm
(AUTHORIZED SIGNATURE (TITLE)
ADDRESS
INCLUDE ZIP CODE)
AREA CODE AND TELEPHONE NUMBER
DATE
NOTE: DO NOT SEND OLD CAPITAL SECURITIES WITH THIS NOTICE OF
GUARANTEED DELIVERY. ACTUAL SURRENDER OF OLD CAPITAL SECURITIES MUST BE MADE
PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
