EXHIBIT 4(x)
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GUARANTEE AGREEMENT
by and between
COMPASS BANCSHARES, INC.,
As Guarantor
and
JPMORGAN CHASE BANK,
As Guarantee Trustee
Relating to
COMPASS TRUST [ ]
Dated as of ___________, _____
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CROSS REFERENCE TABLE (1)
Section of Trust
Indenture Act of Section of
1939, as Amended Agreement
---------------- ---------
310(a)..................................................................4.1(a)
310(b).............................................................2.8; 4.1(c)
310(c)............................................................Inapplicable
311(a)..................................................................2.2(b)
311(b)..................................................................2.2(b)
311(c)............................................................Inapplicable
312(a).............................................................2.2(a); 2.9
312(b).............................................................2.2(b); 2.9
312(c).....................................................................2.9
313(a).....................................................................2.3
313(b).....................................................................2.3
313(c).....................................................................2.3
313(d).....................................................................2.3
314(a).....................................................................2.4
314(b)............................................................Inapplicable
314(c).....................................................................2.5
314(d)............................................................Inapplicable
314(e).....................................................................2.5
314(f)............................................................Inapplicable
315(a)............................................................1(d); 3.2(a)
315(b)..................................................................2.7(a)
315(c)..................................................................3.1(c)
315(d)..................................................................3.1(d)
316(a).............................................................2.6; 5.4(a)
316(b).....................................................................5.3
316(c)............................................................Inapplicable
317(a)....................................................................2.10
317(b)............................................................Inapplicable
318(a)..................................................................2.1(b)
----------
(1) This Cross-Reference Table does not constitute part of the Agreement and
shall not have any bearing upon the interpretation of any of its terms or
provisions.
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TABLE OF CONTENTS
ARTICLE 1 - INTERPRETATION AND DEFINITIONS....................................1
SECTION 1.1. Interpretation and Definitions................................1
ARTICLE 2 - TRUST INDENTURE ACT...............................................5
SECTION 2.1. Trust Indenture Act; Application..............................5
SECTION 2.2. Lists of Holders of Securities................................5
SECTION 2.3. Reports by Guarantee Trustee..................................5
SECTION 2.4. Periodic Reports to Guarantee Trustee.........................5
SECTION 2.5. Evidence of Compliance with Conditions Precedent..............5
SECTION 2.6. Guarantee Event of Default; Waiver............................6
SECTION 2.7. Guarantee Event of Default; Notice............................6
SECTION 2.8. Conflicting Interests.........................................6
SECTION 2.9. Disclosure of Information.....................................6
SECTION 2.10. Guarantee Trustee May File Proofs of Claim...................6
ARTICLE 3 - POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE....................7
SECTION 3.1. Powers and Duties of Guarantee Trustee........................7
SECTION 3.2. Certain Rights of Guarantee Trustee...........................8
ARTICLE 4 - GUARANTEE TRUSTEE................................................10
SECTION 4.1. Guarantee Trustee; Eligibility...............................10
SECTION 4.2. Appointment, Removal and Resignation of Guarantee Trustee....10
ARTICLE 5 - GUARANTEE........................................................11
SECTION 5.1. Guarantee....................................................11
SECTION 5.2. Waiver of Notice and Demand..................................11
SECTION 5.3. Obligations Not Affected.....................................12
SECTION 5.4. Rights of Holders............................................13
SECTION 5.5. Guarantee of Payment.........................................13
SECTION 5.6. Subrogation..................................................13
SECTION 5.7. Independent Obligations......................................14
ARTICLE 6 - LIMITATION OF TRANSACTIONS; SUBORDINATION........................14
SECTION 6.1. Limitation of Transactions...................................14
SECTION 6.2. Ranking......................................................14
SECTION 6.3. Subordination of Common Securities...........................14
ARTICLE 7 - TERMINATION......................................................15
SECTION 7.1. Termination..................................................15
ARTICLE 8 - INDEMNIFICATION..................................................15
SECTION 8.1. Indemnification..............................................15
ARTICLE 9 - MISCELLANEOUS....................................................15
SECTION 9.1. Successors and Assigns.......................................15
SECTION 9.2. Amendments...................................................15
SECTION 9.3. Notices......................................................16
SECTION 9.4. Benefit......................................................17
SECTION 9.5. Governing Law................................................17
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this "Guarantee"), dated as of ___________,
__________, is executed and delivered by COMPASS BANCSHARES, INC., a Delaware
corporation (the "Guarantor"), and JPMORGAN CHASE BANK, a New York banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Securities (as defined
herein) of COMPASS TRUST [ ], a Delaware statutory business trust (the "Trust").
RECITALS
WHEREAS, pursuant to the Trust Agreement (as defined herein), the Trust
may issue up to $____________ aggregate liquidation amount of capital
securities, having a liquidation amount of $__ per security and designated the
"____% Capital Securities" of the Trust (the "Capital Securities") and up to
$__________ aggregate liquidation amount of common securities, having a
liquidation amount of $__ per security and designated the "_____% Common
Securities" of the Trust (the "Common Securities" and, together with the Capital
Securities, the "Securities");
WHEREAS, the Trust will use the proceeds from the issuance of the
Securities to purchase up to $____________ principal amount of the Debt
Securities of the Guarantor;
WHEREAS, as incentive for the Holders to purchase the Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this Guarantee, to pay to the Holders of the Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein; and
WHEREAS, if a Trust Enforcement Event (as defined herein) has occurred
and is continuing, the rights of holders of the Common Securities to receive
Guarantee Payments (as defined herein) under this Guarantee are subordinated to
the rights of Holders of Capital Securities to receive Guarantee Payments under
this Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Holders.
ARTICLE 1 - INTERPRETATION AND DEFINITIONS
SECTION 1.1. INTERPRETATION AND DEFINITIONS. In this Guarantee, unless
the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Guarantee has the same meaning
throughout;
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(c) all references to "the Guarantee" or "this Guarantee" are to this
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Guarantee to Articles, Sections and Recitals
are to Articles, Sections and Recitals of this Guarantee, unless otherwise
specified;
(e) unless otherwise defined in this Guarantee, a term defined in the
Trust Indenture Act has the same meaning when used in this Guarantee;
(f) a reference to the singular includes the plural and vice versa and
a reference to any masculine form of a term shall include the feminine form of a
term, as applicable; and
(g) the following terms have the following meanings:
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" has the meaning specified in the Trust Agreement.
"Capital Securities" has the meaning specified in the Recitals hereto.
"Common Securities" has the meaning specified in the Recitals hereto.
"Common Stock" means the common stock, par value $2 per share, of the
Guarantor.
"Corporate Trust Office" means the principal office of the Guarantee
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Guarantee is located
at ___________________________________________.
"Debt Securities" means the series of junior subordinated debt
securities to be issued by Compass Bancshares, Inc. designated the "_______%
Junior Subordinated Debt Securities due _________, ____", held by the Property
Trustee.
"Global Security" means a fully registered, global Capital Security, as
defined in the Indenture, representing the Capital Securities.
"Guarantee Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Securities, to the extent not paid by
or on behalf of the Trust: (i) any accumulated and unpaid Distributions (as
defined in the Trust Agreement) that are required to be paid on such Securities
to the extent the Trust has sufficient funds available therefor at the time,
(ii) the redemption price, including all accumulated and unpaid Distributions to
the date of redemption, with respect to any Securities called for redemption by
the Trust, to the extent the Trust shall have sufficient funds available
therefor at the time or (iii) upon a voluntary or
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involuntary dissolution, winding-up or termination of the Trust (other than in
connection with the distribution of Debt Securities to the Holders in exchange
for Securities as provided in the Trust Agreement), the lesser of (a) the
aggregate of the liquidation amount and all accumulated and unpaid Distributions
on the Securities to the date of payment and (b) the amount of assets of the
Trust remaining available for distribution to Holders in liquidation of the
Trust after satisfaction of liabilities to creditors of the Trust as required by
law (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means JPMorgan Chase Bank, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Holder" means any holder of Securities, as registered on the books and
records of the Trust; provided, however, that, in determining whether the
Holders of the requisite percentage of Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or
any Affiliate of the Guarantor or any other obligor on the Capital Securities.
"Indenture" means the Junior Subordinated Indenture, dated as of the
date hereof, by and between Compass Bancshares, Inc. and JPMorgan Chase Bank, as
Trustee, and any indenture supplemental thereto pursuant to which the Debt
Securities are to be issued to the Property Trustee, as defined in the Trust
Agreement.
"List of Holders" has the meaning assigned to it in Section 2.2(a)
hereof.
"Majority in Liquidation Amount" means, except as provided in the terms
of the Capital Securities or by the Trust Indenture Act, Holder(s) of
outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities, voting separately as a class, who are the record owners of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class. In determining
whether the Holders of the requisite amount of Securities have voted, Securities
which are owned by the Guarantor or any Affiliate of the Guarantor or any other
obligor on the Securities shall be disregarded for the purpose of any such
determination.
"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Authorized Officers (as
defined in the Trust Agreement) of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee shall include:
(i) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
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(ii) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer on behalf of
such Person in rendering the Officers' Certificate;
(iii) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer on behalf of such Person to express an
informed opinion as to whether or not such covenant or condition has
been complied with; and
(iv) a statement as to whether, in the opinion of each such
officer acting on behalf of such Person, 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, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Property Trustee" has the meaning specified in the Trust Agreement.
"Redemption Price" has the meaning specified in the Trust Agreement.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer with direct responsibility for the administration of this Guarantee and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Securities" has the meaning specified in the Recitals hereto.
"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, dated
as of the date hereof, as amended, modified or supplemented from time to time,
among the trustees of the Trust named therein, the Guarantor, as sponsor, and
the Holders, from time to time, of undivided beneficial ownership interests in
the assets of the Trust.
"Trust Enforcement Event" in respect of the Securities means an
Indenture Event of Default (as defined in the Indenture) has occurred and is
continuing in respect of the Debt Securities.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
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ARTICLE 2 - TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee and shall, to the
extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
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. LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Guarantee Trustee (i) except
while the Capital Securities are represented by one or more Global Securities,
at least two (2) Business Days prior to the date for payment of Distributions, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders of the Securities ("List of Holders") as of the
record date relating to the payment of such Distributions, and (ii) at any other
time, within thirty (30) days of receipt by the Guarantor of a written request
from the Guarantee Trustee for a List of Holders as of a date no more than
fifteen (15) days before such List of Holders is given to the Guarantee Trustee;
provided that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Guarantee Trustee by the Guarantor. The Guarantee
Trustee shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it, provided that 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 its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY GUARANTEE TRUSTEE. Within sixty (60) days after
______ of each year (commencing with the year of the first anniversary of the
issuance of the Securities), the Guarantee Trustee shall provide to the Holders
of the Securities 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. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor shall
provide to the Guarantee Trustee such documents, reports and information as
required by Section 314(a) (if any) of the Trust Indenture Act 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(a) of the Trust
Indenture Act, but in no event later than 120 days after the end of each
calendar year.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions
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precedent, if any, provided for in this Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6. GUARANTEE EVENT OF DEFAULT; WAIVER. The Holders of a
Majority in Liquidation Amount of the Capital Securities may, by vote or written
consent, on behalf of the Holders of all of the Securities, waive any past
Guarantee Event of Default and its consequences. Upon such waiver, any such
Guarantee Event of Default shall cease to exist, and any Guarantee Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Guarantee, but no such waiver shall extend to any subsequent or other
default or Guarantee Event of Default or impair any right consequent thereon.
SECTION 2.7. GUARANTEE EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within ninety (90) days after the
occurrence of a Guarantee Event of Default actually known to a Responsible
Officer of the Guarantee Trustee, transmit by mail, first class postage prepaid,
to the Holders of the Securities, notices of all such Guarantee Events of
Default, unless such defaults have been cured before the giving of such notice;
provided, that the Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Guarantee Event of Default unless the Guarantee Trustee shall have received
written notice thereof or a Responsible Officer of the Guarantee Trustee charged
with the administration of this Guarantee Agreement shall have obtained actual
knowledge thereof.
SECTION 2.8. CONFLICTING INTERESTS. The Trust Agreement shall be deemed
to be specifically described in this Guarantee for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 2.9. DISCLOSURE OF INFORMATION. The disclosure of information
as to the names and addresses of the Holders of the Securities in accordance
with Section 312 of the Trust Indenture Act, regardless of the source from which
such information was derived, shall not be deemed to be a violation of any
existing law, or any law hereafter enacted which does not specifically refer to
Section 312 of the Trust Indenture Act, nor shall the Guarantee Trustee be held
accountable by reason of mailing any material pursuant to a request made under
Section 312(b) of the Trust Indenture Act.
SECTION 2.10. GUARANTEE TRUSTEE MAY FILE PROOFS OF CLAIM. Upon the
occurrence of a Guarantee Event of Default, the Guarantee Trustee is hereby
authorized to (a) recover judgment, in its own name and as trustee of an express
trust, against the Guarantor for the whole amount of any Guarantee Payments
remaining unpaid and (b) file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have its claims and those of the
Holders of the Securities allowed in any judicial proceedings relative to the
Guarantor, its creditors or its property.
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ARTICLE 3 - POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF GUARANTEE TRUSTEE.
(a) This Guarantee shall be held by the Guarantee Trustee on
behalf of the Trust for the benefit of the Holders of the Securities, and the
Guarantee Trustee shall not transfer this Guarantee to any Person except a
Holder of Securities exercising his or her rights pursuant to Section 5.4(b) or
to a Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Successor Guarantee Trustee. The right,
title and interest of the Guarantee Trustee in and to this Guarantee shall
automatically vest in any Successor Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not conveyance documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If a Responsible Officer of the Guarantee Trustee receives
written notice that a Guarantee Event of Default has occurred and is continuing,
the Guarantee Trustee shall enforce this Guarantee for the benefit of the
Holders of the Securities.
(c) The Guarantee Trustee, before the occurrence of any Guarantee
Event of Default and after the curing of all Guarantee Events of Default that
may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee, and no implied covenants shall be read
into this Guarantee against the Guarantee Trustee. In case a Guarantee Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
and is actually known to a Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee, 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 shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Guarantee Event of Default
and after the curing or waiving of all such Guarantee 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, 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,
and no implied covenants or obligations shall be read into
this Guarantee against the Guarantee Trustee; 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
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furnished to the Guarantee Trustee and conforming to the
requirements of this Guarantee; but in the case of any such
certificates or opinions that by any provision hereof 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;
(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 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; and
(iv) no provision of this Guarantee 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 or if the Guarantee Trustee shall have
reasonable grounds for believing that an indemnity, reasonably
satisfactory to the Guarantee Trustee, against such risk or liability
is not reasonably assured to it under the terms of this Guarantee.
SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee shall be sufficiently evidenced by an Officers'
Certificate;
(iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting 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
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor;
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(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration or any instrument (or any
rerecording, refiling or re-registration thereof);
(v) The Guarantee Trustee may consult with counsel, and the
advice or opinion of such counsel with respect to legal matters shall
be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Guarantee Trustee shall have the right at any time to
seek instructions concerning the administration of this Guarantee from
any court of competent jurisdiction;
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee at
the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of
the Guarantee Trustee's agents, nominees or custodians) 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;
(vii) 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;
(viii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it
hereunder;
(ix) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to inquire as
to the authority of the Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Guarantee, both
of which shall be conclusively evidenced by the Guarantee Trustee's or
its agent's taking such action; and
(x) Whenever in the administration of this Guarantee, 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 (i) may request written instructions
from the Holders of a Majority in Liquidation Amount of the Securities,
(ii) may refrain from enforcing such remedy or right or taking such
other action until such
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written instructions are received and (iii) shall be protected in
conclusively relying on or acting in accordance with such written
instructions.
(b) No provision of this Guarantee 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 to act 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.
ARTICLE 4 - GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall be at all times a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any state or territory thereof
or of the District of Columbia, or a corporation or other Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, and subject to supervision or
examination by federal, state, territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
(b) If at any time the 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).
(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 GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), unless a Guarantee Event of Default
shall have occurred and be continuing, the Guarantee Trustee may be appointed or
removed with or without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by
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written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold such
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within sixty (60) days
after delivery to the Guarantor of an instrument of removal or resignation, the
removed or resigning Guarantee Trustee may petition 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.
(e) No Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or resignation
of the Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall pay
to the Guarantee Trustee all amounts owing for fees and reimbursement of
expenses which have accrued to the date of such termination, removal or
resignation.
ARTICLE 5 - 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 the Trust), as and when due, regardless of any defense, right of set-off
or counterclaim that the Trust may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Trust to pay such
amounts to the Holders. Notwithstanding anything to the contrary herein, the
Guarantor retains all of its rights under the Indenture to extend the interest
payment period on the Debt Securities pursuant to Section 3.11 thereof and the
Guarantor shall not be obligated hereunder to make any Guarantee Payments during
any Extension Period (as defined in the certificate evidencing the Debt
Securities) with respect to the Distributions (as defined in the Trust
Agreement) on the Securities.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Guarantee and
of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a
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proceeding first against the Trust or any other Person before proceeding against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee shall be absolute and unconditional and shall remain in
full force and effect until the entire liquidation amount of all outstanding
Securities shall have been paid and such obligation shall in no way be affected
or impaired by reason of the happening from time to time of any event, including
without limitation, the following, whether or not with notice to, or the consent
of, the Guarantor:
(a) The release or waiver, by operation of law or otherwise, of
the performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Trust;
(b) The extension of time for the payment by the Trust of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with the Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum payable
that results from the extension of any interest payment period on the Debt
Securities);
(c) Any failure, omission, delay or lack of diligence on the part
of the Property Trustee or the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Property Trustee or the Holders
pursuant to the terms of the Securities, or any action on the part of the Trust
granting indulgence or extension of any kind;
(d) The voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Trust or any of the assets of
the Trust;
(e) Any invalidity of, or defect or deficiency in, the Securities;
(f) The settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) Any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
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There shall be no obligation of the Guarantee Trustee or the Holders to
give notice to, or obtain consent of the Guarantor or any other Person with
respect to the happening of any of the foregoing.
No setoff, counterclaim, reduction or diminution of any obligation, or
any defense of any kind or nature that the Guarantor has or may have against any
Holder shall be available hereunder to the Guarantor against such Holder to
reduce the payments to it under this Guarantee.
SECTION 5.4. RIGHTS OF HOLDERS.
(a) The Holders of at least a Majority in Liquidation Amount of
the 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 or to direct the exercise of any trust or power conferred upon
the Guarantee Trustee under this Guarantee.
(b) If the Guarantee Trustee fails to enforce this Guarantee, then
any Holder of Securities may, subject to the subordination provisions of Section
6.3, institute a legal proceeding directly against the Guarantor to enforce the
Guarantee Trustee's rights under this Guarantee without first instituting a
legal proceeding against the Trust, the Guarantee Trustee or any other person or
entity. In addition, if the Guarantor has failed to make a Guarantee Payment, a
Holder of Securities may, subject to the subordination provisions of Section
6.3, directly institute a proceeding against the Guarantor for enforcement of
the Guarantee for such payment to the Holder of the Securities of the principal
of or interest on the Debt Securities on or after the respective due dates
specified in the Debt Securities, and the amount of the payment will be based on
the Holder's pro rata share of the amount due and owing on all of the
Securities. The Guarantor hereby waives any right or remedy to require that any
action on this Guarantee be brought first against the Trust or any other person
or entity before proceeding directly against the Guarantor.
SECTION 5.5. GUARANTEE OF PAYMENT.
This Guarantee creates a guarantee of payment and not of collection.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Securities against the Trust in respect of any amounts paid to such Holders
by the Guarantor under this Guarantee; provided, however, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any right 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 Guarantee, if at the time of any such payment,
any amounts are due and unpaid under this Guarantee. 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
Guarantee Trustee for the benefit of the Holders.
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SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the 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 notwithstanding the
occurrence of any event referred to in subsections 5.3(a) through 5.3(g),
inclusive, hereof.
ARTICLE 6 - LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION OF TRANSACTIONS.
So long as any Securities remain outstanding, if (i) there shall have occurred
an Indenture Event of Default with respect to the Debt Securities of which the
Guarantor has actual knowledge that (1) with the giving of notice or lapse of
time, or both, would constitute an Indenture Event of Default and (2) in respect
of which the Guarantor shall not have taken reasonable steps to cure, (ii) there
shall be a Guarantee Event of Default or (iii) the Guarantor shall have given
notice of its election of an Extension Period as provided in the certificate
evidencing the Debt Securities and shall not have rescinded such notice, or such
Extension Period or any extension thereof shall be continuing, then the
Guarantor shall not, and shall not permit any subsidiary of the Guarantor, to
(x) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Guarantor's
capital stock or (y) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Guarantor that rank
pari passu with or junior in interest to the Debt Securities or make any
guarantee payments with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor if such guarantee ranks pari passu
with or junior in interest to the Debt Securities (other than (a) dividends or
distributions in Common Stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a rights plan or the issuance
of stock under any such plan or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under this Guarantee and (d) purchases of Common
Stock related to the issuance of Common Stock or rights under any of the
Company's benefits plans for its directors, officers or employees).
SECTION 6.2. RANKING.
This Guarantee will constitute an unsecured obligation of the Guarantor
and will rank subordinate and junior in right of payment to all Senior and
Subordinated Debt (as defined in the Indenture) of the Guarantor in the same
manner and to the same extent as set forth in Article XIII of the Indenture.
SECTION 6.3. SUBORDINATION OF COMMON SECURITIES.
If a Trust Enforcement Event has occurred and is continuing under the
Trust Agreement, the rights of the holders of the Common Securities (i) to
receive Guarantee Payments hereunder and (ii) to direct the time, method and
place of conducting any remedy available to the Guarantee Trustee in respect to
this Guarantee or to direct the exercise of any trust or power conferred on
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the Guarantee Trustee under this Guarantee shall be subordinated to the same
rights of the Holders of the Capital Securities.
ARTICLE 7 - TERMINATION
SECTION 7.1. TERMINATION.
This Guarantee shall terminate upon (i) full payment of the Redemption
Price of all Securities, (ii) distribution of the Debt Securities to the Holders
of all the Securities or (iii) full payment of the amounts payable in accordance
with the Trust Agreement upon liquidation of the Trust. Notwithstanding the
foregoing, this Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any Holder of Securities must restore payment
of any sums paid under the Securities or under this Guarantee.
ARTICLE 8 - INDEMNIFICATION
SECTION 8.1. INDEMNIFICATION.
The Guarantor agrees to indemnify each indemnified person for, and to
hold each indemnified person harmless against any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the reasonable costs and expenses of defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The provisions
of this Section 8.1 shall survive the termination of this Guarantee or the
resignation or removal of the Guarantee Trustee.
ARTICLE 9 - MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee shall bind
the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the 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.
SECTION 9.2. AMENDMENTS.
Except with respect to any changes that do not materially adversely
affect the rights of the Holders (in which case no consent of the Holders will
be required), this Guarantee may not be amended without the prior approval of
the Holders of at least a Majority in Liquidation Amount of the Securities. The
provisions of Section 11.2 of the Trust Agreement with respect to meetings of,
and action by written consent of, the Holders of the Securities apply to the
giving of such approval.
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SECTION 9.3. NOTICES.
All notices provided for in this Guarantee shall be in writing, duly
signed by the party giving such notice, and shall be delivered by hand,
telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee Trustee
may give notice of to the Guarantor and the Holders of the Securities):
JPMorgan Chase Bank
-------------------
-------------------
-------------------
-------------------
With a copy to:
Compass Trust [ ]
c/o Compass Bancshares, Inc.
ββ βββββ ββββ ββββββ
ββββββββββ, βββββββ βββββ
Attention: Secretary
Telecopy No.: (βββ) βββ-ββββ
Telephone No.: (βββ) βββ-ββββ
(b) If given to the Guarantor, at the Guarantor's mailing
addresses set forth below (or such other address as the Guarantor may give
notice of to the Guarantee Trustee and the Holders of the Securities):
Compass Bancshares, Inc.
ββ βββββ ββββ ββββββ
ββββββββββ, βββββββ βββββ
Attention: Secretary
Telecopy No.: (βββ) βββ-ββββ
(c) If given to any Holder of Securities, at the address set
forth on the books and records of the Trust.
All such notices 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.
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SECTION 9.4. BENEFIT.
This Guarantee is solely for the benefit of the Holders of the
Securities and, subject to Section 3.1(a), is not separately transferable from
the Securities.
SECTION 9.5. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE(S)]
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IN WITNESS WHEREOF, this Guarantee is executed as of the day and year
first above written.
COMPASS BANCSHARES, INC., as Guarantor
By:
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Name:
--------------------------------------
Title:
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JPMORGAN CHASE BANK, as Guarantee Trustee
By:
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Name:
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Title:
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